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FaLL 2018 The Official Magazine of the MicroCap Stock Market Since 2006

Jericho Oil Corporation TSX-V: JCO / PINK: JROOF OptimizeRx Corporation NASDAQ CM: OPRX

8 14
Page Brian Williamson, CEO Page Will Febbo, CEO
www.jerichooil.com www.optimizerx.com

US Nuclear Corp. PINK: UCLE Medical Transcription Billing, Corp. NASDAQ CM: MTBC

18 22
Page Bob Goldstein, CEO Bill Korn, CFO
Page
www.usnuclearcorp.com Delicious Flickr Twitter
www.mtbc.com
Retweet

FEATURED ARTICLES Facebook MySpace StumbleUpon Digg

21 There’s a New SEC in Town Corey Fischer, CPA 60 Invest and Make Money with the Power of 78 Harnessing Regulatory Initiatives & 90 TSX Venture Exchange Update
28 Undiscovered Down Under Mark Tobin Knowledge Maj Soueidan Targeted Rulemaking to Improve
Slash Dot Mixx Brady Fletcher
Skype Technorati

64 Why Family Offices Should Be Your First Transparency and Further Market
44 What is a SPAC? Doug Ellenoff, Esq. Efficiency Cromwell Coulson
Choice For Capital Investment Karl Douglas
52 Three Themes for Mining Investments in 2018 80 Digital Currency 101 Reddit FriendFeed YouTube LinkedIn

Rick Rule, Sprott U.S. Holdings 67 Investors Warm Up to U.S. Cannabis

Companies Alan Brochstein Robert Graham, CPA and Joshua Santos, CPA
54 Identifying Promising Opportunities in 86 Major Mining Companies Looking
MicroCap Investments Sam Namiri 68 Regulation of Crypto at a Crossroads Newsvine SlideShare Google Google Talk

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56 Why www.stocknewsnow.com
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and Joshua Samuel Downer Esq. 88 How to Play PASPA from Canada
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 E D I T O R I A L

A
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 ATE
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 CONTENTS
F E AT U R E D A RT I C L E S
44 What is a SPAC? By Doug Ellenoff, Esq.
52 Three Themes for Mining Investments in 2018
By Rick Rule
54 Identifying Promising Opportunities in MicroCap
Investments By Sam Namiri
56 Why Canada! By Brandon Mackie
58 Investing in Electricity Conservation
By Sean Peasgood
60 Invest and Make Money with the Power of Knowledge
By Maj Soueidan
64 Why Family Offices Should Be Your First Choice
For Capital Investment By Karl Douglas
Profiled Companies
8 Jericho Oil Corporation
TSX-V: JCO / PINK: JROOF
11 AudioEye, Inc.
NASDAQ CM: AEYE
12 Concierge Technologies, Inc.
OTCQB: CNCG
14 OptimizeRX Corporation
NASDAQ CM: OPRX
17 Golden Arrow Resources
Corporation
TSX-V: GRG / OTCQB: GARWF /
FRANKFURT: G6A
18 US Nuclear Corp
PINK: UCLE
Accounting Corner
21 There’s a New SEC in Town
By Corey Fischer, CPA
Australia Corner
28 Undiscovered Down Under
By Mark Tobin
Legal Corner
40 Don’t Blame it on Reg A
By Louis A. Bevilacqua, Esq.
Cannabis Corner
67 Investors Warm Up to U.S.
Cannabis Companies
By Alan Brochstein
Beltway Corner
68 Regulation of Crypto at a
Crossroads
By Dina Ellis Rochkind, Esq. and
Joshua Samuel Downer Esq.
www.stocknewsnow.com
STOCKNEWSNOW.COM
Fall 2018
78 Harnessing Regulatory Initiatives & Targeted Rulemaking
to Improve Transparency and Further Market Efficiency
By Cromwell Coulson
80 Digital Currency 101
By Robert Graham, CPA and Joshua Santos, CPA
82 Communication Pitfalls in the Crypto Era
By John Lowy, Esq.
90 TSX Venture Exchange Update By Brady Fletcher
102 Tracking Micro Cap Debt in Southeast Asia By Peter Pham
108 What Are Gold Royalty Companies and Why Do
They Matter? By Nolan Watson
114 Junior Mining: Why Royalty Companies and Project
Generators By Adrian Day
22 Medical Transcription Billing, Corp. 43 New Energy Solar Ltd.
NASDAQ CM: MTBC ASX: NEW
25 Fission Uranium Corp. 46 GoviEx Uranium Inc.
TSX: FCU / OTCQX: FCUUF TSX-V: GXU / OTCQB: GVXXF
31 Buddy Platform Ltd. 47 SRAX
ASX: BUD / PINK: POTTF NASDAQ CM: SRAX
33 Tech Mpire Ltd. 51 Senetas Corporation Ltd.
ASX: TMP ASX: SEN / PINK: SNESF
35 Race Oncology Ltd. 70 Creso Pharma Ltd.
ASX: RAC ASX: CPH
36 Tinybeans Group Ltd. 76 Hilltop Cybersecurity, Inc.
ASX: TNY / PINK: TNYYF CSE: CYBX / OTCQB: CYBXF
38 Family Zone Cyber Safety Ltd.
ASX: FZO / PINK: FMZNF
Asia Corner Opinion
72 Hong Kong Exchange 95 Aussie Companies
Attracting Chinese Unicorns By John Kimber
and Biotechs
95 The DJIA and the USA Economy:
By Leslie Richardson
Past, Present and Potential Future
Resources Corner By Steven M. Shelton, MS. MBA.
86 Major Mining Companies CFP®, CLU, CHFC, TEP, CIMA® CMT
Looking for Quality Junior 105 Oil & Gas Turmoil But Steady
Assets By Brent Cook
Growth in 2018 By Frederic Scheer
Gaming Corner 106 2020 BioPharma Expansion and
88 How to Play PASPA from the Opportunities of Heading East
Canada By Ralph Garcea By Jae Sly, MBA, Ph.D
Commodities Corner 112 Why is the Cryptocurrency
92 Introduction to the Futures Revolution Good for Gold?
By Doug Casey
Markets By Mark Shore, MBA
Comic Strip Fixed Income Corner
94 WallStreet Chicken 110 Fixed Income
Episode 18 - The Roast By Michael E. Lewitt
MicroCap Review Magazine 7
 P R O F I L E D C O M PA N Y
Jericho oil corporation
The Future is ‘STACK’-ing up for Oklahoma’s Jericho Oil
I
t’s no big secret that until very recently,
it has been a rather tough few years
for the oil industry and, as a result,
tough on companies associated with the
industry. This is especially true for micro-
cap companies in the junior oil sector that
were fighting to stay between the lines in an
environment of high costs and low returns
that resulted from the oil price downturn of
2014 to 2017. Well, it appears those days are
in the rearview mirror, as oil hovers in the
$70’s and many predicting it to go up from
there. That’s great news if you were one of
the few microcaps savvy enough to manage
your way through the traffic and are now
positioned to take advantage of the open
road left by those that were forced to drive
off a cliff…
Jericho Oil Corporation is, in fact, one
of the success stories now speeding down
the highway. The company, with operation-
al headquarters in Tulsa, Oklahoma, is a
well-capitalized junior E&P (Exploration &
Production) with an experienced Team that
has a recognized track record for success in
Brian Williamson, CEO
8 MicroCap Review Magazine
Tsx-V: Jco / pinK: JrooF
many companies, both large and small would
love the opportunity to do. A company
changer! Wait for it… Through years of
hard work, diligence, relationship build-
ing, relentless Geological/Engineering/Land
efforts, and finally, maybe a little bit of luck,
microcap Jericho has managed to acquire an
interest in ~16,000 net acres (almost all held
Figure 1. U.S. Onshore Shale Basins by production) in the prized Anadarko Basin
the area, and an established strategy of buy- STACK Play. Yup! That’s it! Jericho man-
ing distressed and undercapitalized assets aged to become a “player” in the STACK!
in proven plays with a focus on domestic, It’s kind of a big deal. And with each
liquids-rich unconventional resource plays, passing day, as their much larger neighbor-
primarily in Oklahoma.  Jericho’s core busi- ing oil companies release and upgrade well
ness objective is driving long-term share- results, work their own geology/engineering/
holder value through the growth of oil and land, and continue to snatch up surrounding
gas production, cash flow and oil-reserves.  STACK acreage at prices 3..4..5 times what
As such, the company has assembled an Jericho paid, the big deal for Jericho is getting
enviable 55,000 acre position across the state bigger… much bigger.
of Oklahoma at low-cost entry with signifi- Large E&Ps like Continental Resources,
cant current production value. Devon Energy, Marathon Oil, Newfield
Jericho is unique among juniors as it Exploration, Chesapeake Energy and Jim
had strong financial backing during the oil Hackett’s recently-listed Alta Mesa Resources
downturn which enabled it to acquire high collectively hold over ~1 million acres in
quality assets at the bottom of the market the STACK and have made it their core
and the height of distress. The cash to buy focus.   What do they know that Jericho
came from a handful of world-class, long- knew as well? It has to do with the supe-
term investors. The Breen Family (Ed Breen rior well results now able to be accessed
is CEO of the chemical and agricultural giant from “stacked-pay” formations. The STACK
DowDuPont) and the Hegna Family are
two of the company’s largest shareholders,
and they are joined by several other notable
families who have backed Jericho, even when
oil was sub-$30 a barrel.
Within those 55,000 acres, Jericho, along
with its private joint venture partner/family
office, owns and operates three high-quality
oil and gas plays in Oklahoma. And within
those three plays, Jericho has managed to do
something many companies were, and still
are, simply unable to achieve. Something
Figure 2
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“We believe the value is all about understanding and delivering best-in-class
results in a particular opportunity within a particular play. In our world, the
ability to find oil gets harder and harder every year. As such, you want to be
aligned with a team that knows an asset, knows a region, and knows how to
develop the hydrocarbons in that area.

At Jericho, that’s exactly what we’ve built: a team geared around developing
Figure 3. Underlying STACK Intervals
the stack, a team that understands, lives, and has breathed Oklahoma oil
already, envious position.
and gas development for the last 40 years. That local knowledge, that rock
Looking out even further, Jericho’s story
knowledge, that geology knowledge, and that development experience
seems primed to pick up even more speed.
translates very, very well into successful after successful development
Each STACK well at $60 oil delivers ~$3.5
programs.” —Brian Williamson, CEO of Jericho Oil
million of PV10 value (PV10 is the current
value of approximated oil and gas revenues
boasts top-tier well economics similar to the best-in-class private operators. The first in the future, less anticipated expenses, dis-
Permian which translate into very low break- well (Wardroom) achieved a peak 24-hr counted yearly at 10%). Jericho’s STACK
even prices near $30 per barrel. rate of 957 BOE, with an IP30 (Initial JV currently owns ~200 well locations, so
How about a little background… One of Production over 30 Days) of 770 BOE per the upside for Jericho and its shareholders
the lowest cost oil and gas plays in North day and was amongst the highest of any well appears to be enormous.
America is the Oklahoma STACK. The to-date targeting the Meramec formation in With the inevitable winding road aside,
‘STACK,’ as it is affectionately known, is the northern STACK on a per 1,000 lateral Jericho is a world-class team, determined to
an acronym describing both its location foot basis. continue growing and succeeding, dedicated
and formation. Location - Sooner Trend Early results from the second well to the craft, with a detail to timing. As such,
Anadarko Basin Canadian and Kingfisher (Swordspear), which targeted the Osage Jericho Oil Corporation appears to have
County. Formation - The play has multiple, formation, after 30-days on an electrical their top down and are motoring in the right
“stacks” of productive formations that are submersible pump, were reported on July direction…
present in the area.   The STACK is a prolific 25, 2018. As of that date, the most recent
hydrocarbon system with high oil content, daily production reading was of +500 BOE Experienced Mid-Con
multiple horizontal target horizons (~700 – and the well had still not yet reached peak Leadership Team
feet thick), extensive production history and IP.  (See Figure 4)
historically high drilling success rates.  There are several catalysts ahead for Brian Williamson, CEO
The STACK fields were originally devel- shareholders as the coming months look to Mr. Williamson has been a part of the
oped by the majors (companies like Exxon, be filled with positive activity, pushing the energy industry since 1995. Mr. Williamson,
Texaco and Shell) and were drilled verti- company onward, upward and continuing in his role as CEO, is responsible for the
cally.  The recent introduction of horizontal the metaphor of heading down that high- overall vision, direction and corporate strat-
drilling and hydraulic fracturing has rein- way of success. Jericho has plans for at least egy of Jericho. Day to day, he spends
vigorated the play, and billions of dollars three new horizontal STACK wells in the his time working with Jericho’s leadership
of investment have been directed into the second half of 2018 along with additional team sourcing, evaluating and developing
STACK basin because of the repeatable “tuck-in” acquisitions contiguous to its cur- the company’s oil and gas assets and capital
stacked, multi-zone, successful drilling and rent STACK acreage increasing Jericho’s market activities. Mr. Williamson began his
development across the play. 
And Jericho is no exception. As oil moved
comfortably into the $60s/70s this year, the “While the Permian Basin has grabbed the attention of oil companies and
company transitioned its focus from growth their investors in recent years… Some drillers are finding that the STACK
through acquisitions to growth through the shale play in Oklahoma is just as good, if not better, than the vaunted
drill bit. Permian. That›s why they spent billions of dollars to scoop up land in the
Jericho recently participated in the suc- region over the past few years, which is starting to pay big dividends by
cessful drilling and completion of two test fueling remarkable production growth.” —The Motley Fool (Dec. 13, 2017)
horizontal STACK wells, partnered with

www.stocknewsnow.com MicroCap Review Magazine 9


Figure 4. Growing Jericho’s Core Position
career at Arthur Andersen as part of its Tax
and Business Advisory Services Practice. While
at Arthur Andersen, he worked with Fortune
500 and FTSE 100 companies and private firms
on evaluating investment opportunities and
conducting extensive research on corporate
planning and due diligence on industry trans-
actions. Mr. Williamson also oversaw the cre-
ation, trading and risk management of energy
and energy related trading products in various
world markets. From 2006 until 2012, Mr.
Williamson managed the private equity plat-
form for a New York based financial institution.
Mr. Williamson earned a B.S. in Accounting
from LaSalle University and a J.D. from Widener
University School of Law, where he served as
law review editor and was a national moot
court semi-finalist. Mr. Williamson is a Certified
Public Accountant (inactive).
Ben Holman, CFO
Mr. Holman, based in Tulsa, Oklahoma, has
more than 17 years’ experience in accounting
and business administration in the oil and
gas industry, including senior positions at
Apco Oil and Gas International Inc., a for-
mer subsidiary of The Williams Companies
and WPX Energy. He has been working with
Jericho at its Tulsa operational headquarters
since November 2017. Mr. Holman is a CPA,
with a MAcc, B.S. and BSBA, all from the
University of Tulsa.
Dennis Webb, Director of Engineering
Mr. Webb is a Petroleum Engineer with 40+
10 MicroCap Review Magazine
Figure 5
years of experience primarily working the
Mid-Continent and Permian Basins. His expe-
rience spans everything from waterflooding to
full field development and corporate manage-
ment. He has also spent time in the industry
in Kuwait as well as in Yemen as Production
Superintendent for Hunt Oil. He has spent
the last eight years with Nadel and Gussman
LLC where he was responsible for the horizon-
tal Mississippi Lime drilling program which
involved 15 horizontal wells including the first
horizontal Mississippi Lime wells drilled in
Osage County, Okla. Mr. Webb has a Bachelor
of Science in Computer Engineering from the
University of Oklahoma, is a 25 year member
of the Society of Petroleum Engineers, and has
been a registered professional engineer for 37
years.
Shane Matson, Director of Geology
Mr. Matson joined the Jericho manage-
ment team in 2016 and serves as Director
of Geology. He has studied the outcrops and
subsurface geology of the Mid-Continent
region for 20 years and brings over a decade
of work as a Petroleum Geoscientist with
focus specifically on Jericho’s current area
of focus and brings a history integrating
highly technical attribute analyses of 3D
seismic volumes into modern explora-
tion and reservoir development workflow.
Through his work with Ceja Corporation,
Spyglass Energy Group and Mid-States
Petroleum Matson has been at the forefront
in pioneering the horizontal development of
Mississippian reservoirs. Mr. Matson gradu-
ated with a Bachelor of Science and Masters
of Science degrees from the University of
Arkansas, Fayetteville where he serves as an
honorary member of the External Advisory
Board to the Department of Geosciences. He
is a member of the American Association
of Petroleum Geologists, Tulsa Geological
Society, Ft. Smith Geological Society, and
the Oklahoma Well Log Library. Mr. Matson
is a two-time recipient of the AAPG Mid-
Continent Section A.I. Levorson Memorial
Award. The award recognizes the best paper
presented at the MCS AAPG Section meet-
ing, with particular emphasis on creative
thinking towards new ideas in explora-
tion. He has presented work and ideas on
the Mississippian reservoirs of the Mid-
Continent at the AAPG Playmakers Forum
and AAPG Discovery Thinking Forum.
Bill Harwell, Director of Land
Mr. Harwell brings an extensive background
in all aspects of petroleum landman manage-
ment, operations and administration. Mr.
Harwell has spent much of his career in the
Mid-Continent region. With over 30 years’
experience in land functions, Bill has suc-
cessfully led land teams as part of Williams
Energy as well as managed the land func-
tion for Private Equity sponsored energy
focused groups. Bill’s experiences include
end to end exposure to all aspects of the
petroleum land business including man-
aging and overseeing acquisitions, inspec-
tions, divestures, right-of-way projects. Mr.
Harwell has given expert testimony at The
Oklahoma Corporate Commission in over
50 hearings. He is currently a member of
the International Right of Way Association,
Tulsa Association of Petroleum Landmen
and Tulsa Pipe Liners Club. n
JERICHO OIL CORPORATION
For more information, please visit:
www.jerichooil.com
Toll-Free: 1-800-750-3520
Tickers: PINK: JROOF / TSX-V: JCO
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
 P R O F I L E D C O M PA N Y
audioEye, inc.
Technology with an Accessible Purpose
F
ounded in 2005 as an R&D company
by serial entrepreneurs, technolo-
gists and brothers, Sean and Nathan
Bradley, AudioEye is technology with pur-
pose. When Nathan was diagnosed with a
degenerative disease that would leave him
blind, the Bradley’s dedicated themselves to
developing a solution to ensure the Internet
remained accessible to Nathan.
Fortunately for the 15%+ of the world’s
population that lives with a disability, their
project became a technology, company and
offering that positively impacts the ability of
all people to access and use digital content.
accEss is noT EQUaL
A website is inaccessible for people relying
on assistive technology, such as screen read-
ers, if it is not coded or designed for digital
accessibility. But the failure to provide acces-
sible websites and content is bigger than
access. More than 71% of the billion plus
people with disabilities, have disabilities that
are not perceptible. These include a range of
cognitive disabilities, such as Dyslexia, all of
which negatively impact their ability to fully
absorb and retain digital information.
Designing websites for digital accessi-
bility also ensures equal access and com-
pliance with requirements related to the
Americans with Disabilities Act (ADA) and
generally accepted standard, Web Content
www.stocknewsnow.com
Accessibility Guidelines (WCAG) 2.1.
LEVELinG ThE pLaYinG FiELd
For people with disabilities, accommoda-
tions in the digital world are as critical
as ramps and rails in the physical world.
No business, school or government agency
intends to exclude people with disabilities,
but unless their websites are accessible, that
is exactly what they’re doing: excluding mil-
lions.
Fortunately for all, AudioEye has achieved
a solution that makes it simple and cost effec-
tive to remediate existing websites, ensure
accessibility for people with disabilities and
create greater usability for all end-users.
Leveraging patented technology and subject
matter expertise, AudioEye is able to provide
an end-to-end solution that is the most effi-
cient and sustainable method for achieving
and maintaining ADA-related compliance.
doinG ThE riGhT This is
sMarT BUsinEss
Fueled by year-over-year increases in ADA-
related lawsuits, and threats of legal action
for failure to provide equal access on their
websites, public and private companies
across industries, schools and school dis-
nasdaQ cM: aEYE
tricts, state, local and federal government
agencies and entities from the Fortune 500
to small businesses have sought solutions
that are cost effective and sustainable.
In an industry historically populated by
consultants, scanning tools and report writ-
ers, AudioEye has emerged as the clear
leader, offering a service based in technol-
ogy that has fueled the company to growth
year-over-year.
doinG WELL, doinG Good
What began as the mission of two brothers
to find a personal solution to manage dis-
ability, has become the reason AudioEye
exists: to make digital content more acces-
sible, and more usable for more people.
Today, AudioEye automatically publishes
more than one billion remediation fixes
daily on more than one thousand websites
for 800+ customers. Through direct clients
and partners building our technology into
their platforms, AudioEye is steadfast in
our belief that Accessibility is about people
first. n
AudioEye, Inc. (AEYE)
For more information, please visit:
www.audioeye.com
The company paid consideration to SNN or its affiliates for this article.
MicroCap Review Magazine 11
 P R O F I L E D C O M PA N Y
concierge Technologies, inc.
Building Value, One Profitable Acquisition at a Time
C oncierge Technologies’ strategy is to provide balance among its busi-
nesses and offset the cyclicality that faces so many companies by own-
ing and operating entities in diverse sectors.
Warren Buffet once said: “Put together a
portfolio of companies whose aggregate
earnings march upward over the years, and
so also will the portfolio’s market value.”
That’s exactly what CEO Nicholas Gerber,
COO David Neibert, and the team at Concierge
Technologies is doing—building value for share-
holders, one profitable acquisition at a time.
A publicly traded holding company that
took its present form under new leadership
in 2015, Concierge Technologies is quietly
building a solid business. Since 2015, book
value per share has grown at a compounded
rate of more than 22 percent, and annual rev-
enues are hovering at the $30 million mark.
The company today has four operating
units. Each is healthy, profitable and well-
established in its respective sector.
“Our goal is to build a publicly traded entity
for the benefit of all shareholders, adding
value through conservative, accretive acquisi-
tions of companies with strong management
teams and solid growth prospects,” Gerber
said. “Our underlying strategy is to provide
balance among our businesses and offset
the cyclicality that faces so many companies
by owning and operating entities in diverse
sectors.”
“The people who run our companies day-
to-day, and the companies themselves, are
leaders in their industries,” Neibert added.
“We provide expert resources at the corporate
level, allowing them to concentrate on profit-
able growth of the businesses they each know
so well. Where it makes sense, we maximize
resources and take advantage of synergies.”
One vivid example is the rollout this fall
12 MicroCap Review Magazine
in New Zealand of the company’s Original
Sprout line of natural, 100% vegan, safe, non-
toxic hair and skin care products through
the existing distribution channels of another
Concierge company, New Zealand-based
Gourmet Foods. Original Sprout was acquired
at the end of 2017. Gourmet Foods, which
produces and distributes iconic meat pies and
pastries throughout New Zealand under the
brand names Pat’s Pantry and Ponsonby Pies,
joined Concierge in August 2015.
The company’s other businesses include
Wainwright Holdings, operating under
the USCF Investments brand, acquired in
December 2016, and Brigadier Security
Systems, acquired in June 2016.
Based in Oakland, Calif., and with about
$3 billion in assets under management,
USCF serves as manager, operator or invest-
ment adviser to exchange traded products,
structured as limited partnerships or invest-
ment trusts that issue shares trading on
the NYSE Arca. Brigadier, headquartered in
Saskatoon, Canada, provides comprehensive
security solutions to homes and businesses,
government offices, schools and other public
buildings throughout the province.
Gerber is a prudent investor, with a long, suc-
oTcQB: cncG
cessful history of creating value for shareholders.
In 1995, he founded and served as chief invest-
ment officer of the Ameristock Fund, which,
under his leadership, beat the S&P500 with
double-digit returns over its lifetime.
Gerber believes that Concierge, which is
still in its formative stages, represents a
ground floor opportunity for shareholders
and prospective acquisition candidates alike.
“At our size, it is rare and gratifying to have
achieved profitability,“ he said. “We are just
getting started and believe Concierge has a
bright future.” n
For more information about Concierge
Technologies, visit:
www.conciergetechnology.net.
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
www.stocknewsnow.com MicroCap Review Magazine 13
 P R O F I L E D C O M PA N Y
optimizerx corporation
Delivering Results in Digital Health
R arely do you find an emerging growth company that has taken a sea
change in a major industry and turned it into a powerhouse of high-
margin revenue and earnings. This is OptimizeRx (NASDAQ: OPRX).
Over the last few years, the U.S. healthcare
system has become exceedingly complex and
costly for everyone — not only for patients,
but also for doctors and hospitals. Even Big
Pharma is feeling the pain.
Patients are facing an increasing cost
burden due to expensive medications and
record-high deductibles and co-pays. The
Kaiser Family Foundation reports that
deductibles have risen by 300 percent since
2006, while co-insurance costs have nearly
doubled. Combined with fewer generic drug
options, this has created a ‘perfect storm’ that
is undermining patient adherence to their
doctor-prescribed medications. Patients
simply cannot afford them, and doctors are
increasingly frustrated.
Will Febbo, CEO
14 MicroCap Review Magazine
Fueling the frustration is the breakdown
in doctor and patient education by pharma
companies which has traditionally support-
ed better adherence. Given how the health-
care system has changed in recent years, the
traditional channels of patient education
are no longer viable. Millions of dollars in
coupons and vouchers from pharmaceutical
manufacturers go unused due to patient lack
of information and access.
In fact, it has become increasingly more
difficult for pharmaceutical companies —
acting through their sales reps in the field —
to get in front of the physicians they need to
reach and provide clinical information, drug
samples and savings coupons. Due to the
Sunshine Act and similar reporting require-
ments, these days fewer and fewer doctors
and now less than half the hospitals in the
U.S. will allow pharma reps in the door.
This contributes to higher costs for
patients, as most have long relied on co-
pay coupons and vouchers provided by the
pharma reps to alleviate their out-of-pocket
expense. Further, new research is showing
that the increasing widespread failure to
take prescribed medications is now costing
the U.S. healthcare system more than $100
billion annually due to poor healthcare out-
comes, disease progression and other avoid-
able healthcare expenses.
All this is not good for drug companies
either. Despite spending billions of dollars
on developing new drugs, pharma compa-
nies are increasingly challenged with not
nasdaQ cM: oprx
SUBMIT ePrescription
OptimizeRx’s proprietary technology alerts 
doctors of prescription savings and automatically 
sends info to patient’s pharmacy.
being able to communicate with and educate
healthcare providers on clinical benefits and
encourage prescribing. This hits the bottom
line.
EnTEr opTiMiZErx
OptimizeRx has emerged as the only public
company that has been able to effectively
address the challenge of escalating drug
costs, patient adherence and pharma-doctor
communication, while providing a simple
solution right within a doctor’s everyday
workflow. In fact, lowering co-payments,
doctors can improve patient adherence,
according to research published by the
National Institutes of Health.
As the largest digital health network of its
kind, OptimizeRx provides patient access to
savings directly through the doctor-man-
aged electronic health records (EHR) and
ePrescribing system.
This point-of-care presence has become
increasingly essential, given how EHRs
www.stocknewsnow.com

today dominate the attention of healthcare
providers. Most physicians now spend more
than five hours a day interacting with patient
health records through an EHR interface,
whether it be viewing test results and logging
notes, or issuing ePrescriptions.
In 2017 alone, more than $2 billion in
ePrescriptions were transmitted from doc-
tor to pharmacy. This phenomenally high
number reflects how 90 percent of ambula-
tory care providers now use EHRs, and that
ePrescribing now exceeds 85 percent of all
prescriptions written, according to a 2018
Surescripts report. In fact, most hospital
systems now require that all medications be
ePrescribed.
OptimizeRx’s powerful digital health care
messaging platform improves critical com-
munication between pharma companies and
healthcare providers, where providers can be
alerted to available financial programs right
at the point-of-care. In real-time, the patient-
savings solution checks eligibility and deliv-
ers an offer to the prescribing physician. The
voucher or coupon is then printed for the
patient to present to their pharmacist or is
sent along with the prescription electroni-
cally.
By delivering patient savings and clinical
content from pharmaceutical manufacturers
www.stocknewsnow.com
directly through the EHR and at the point-
of-care, doctors are alerted to opportunities
during the ePrescribing process as a natural
part of their workflow. The content is deliv-
ered, tracked and reported across a large
point-of-prescribe promotional network.
Physicians can search for a brand name drug
within the EHR and be instantly alerted to
alternatives or potential savings for a specific
patient.
This technology not only helps improve
patient adherence to medications and clini-
cal outcomes, it also allows healthcare pro-
viders to extract greater value from their
EHR investments by streamlining the pro-
cess of identifying cost savings for patients.
In addition to savings information, the intel-
ligent point-of-care technology can also
alert physicians about recommended tests or
procedures related to a patient’s condition,
prompting additional action if needed.
A WIN-WIN WITH POWERFUL
RESULTS
The OptimizeRx digital communication
network now reaches more than half of
the office-based healthcare providers in the
country. This highly-effective solution to a
growing problem has not only been good for
doctors, patients and major drug brands, it
has also generously rewarded the sharehold-
ers of OptimizeRx.
For 2017, revenue hit a record $12.1 mil-
lion, growing at a 49% CAGR since 2011.
For the second quarter of 2018, the company
reported its seventh consecutive quarter of
revenue growth and turned the corner to
profitability. At $5.1 million, second quar-
ter revenue was up 78% from the year-ago
quarter and up 24% sequentially. On a trail-
ing 12-month basis, revenue was up 79% to
$16.3 million.
These results demonstrated how the com-
pany’s low fixed-overhead model contin-
ues to support a highly-scalable financial
opportunity, which was also evident in its
expanding margins. In fact, at 56.1% for the
quarter, the company surpassed its previ-
ously announced gross margin goal of 55%.
The management team expects to exceed
this margin goal again in the second half of
the year as the company scales.
Driving this growth is the record addi-
tion of new pharmaceutical brands on the
platform, fast-growing digital health mes-
saging volume sponsored by these brands,
and an expanding distribution channel of
EHRs and ePrescribing systems. The com-
pany’s recent entry into hospital systems
and physical decision support is expected
to fuel this growth even furtherIn In just
the last yeaockOPhasmore thly tripleIt The
stock climbed above $.1010 per share 5x 8x
average daird volume the day afthisits recent
MicroCap Review Magazine 15
 OptimizeRx Digital Health Messaging Platform
Pharma communicates directly  Reminds physicians about  have begun to cross-traid their respective
with physicians via on‐screen  recommended tests or 
brand messages. procedures or eCoupon savings.
Can be specific to therapy 
being evaluated.
Helps physicians remember 
to take actions that deliver  international effort is expected to ramp up
better patient care.
quarterly report. But according to company
CEO, William Febbo, they have only just
begu
“We believe we are in the earlier days of
this opportunity with a huge first-mover
advantage and are truly a pure play in this
space,” said Febbo. “We have advanced tech-
nological infrastructure in place at the right
time in this industry sea-change, where we
are able to reconnect pharmaceutical manu-
facturers and physicians in a seamless, effi-
cient way, and generate high-ROI for our
pharma customers.”
For the second half of 2018, Febbo says
the company will remain focused on revenue
generation from core products and expand-
ing its channel and partner networks both
domestically and internationally. “We see
doing this while maintaining strong gross
margin as we scale,” noted Febbo.
MULTI-BILLION DOLLAR
OPPORTUNITY
Of the 2 billion ePrescriptions transmitted
annually, 10% of these transactions involve
brands with a co-pay savings program. This
means OptimizeRx has the potential to
deliver more than 200 million transactions
annually.
Given the escalating cost of healthcare
and especially the cost prescriptions being
shifted increasingly to patients, the need
for co-pay saving programs is expected to
increase. The pharma industry has report-
edly set aside more than $8 billion to cover
co-pay programs.
Based on these factors and indicators from
OptimizeRx clients, agencies and partners,
the company estimates its total addressable
market is worth well north of a $1 billion
16 MicroCap Review Magazine
7
once the market fully adopts this channel.
“Using our digital health platform, major
pharma brands are discovering that the
point-of-care, where the patient and doctor
are directly engaged, is now the most effec-
tive space for them to communicate their
message,” said Febbo.
As personalized medicine grows in popu-
larity and specialty treatments are more com-
monly prescribed, platforms like OptimizeRx
that exist at the point-of-care will be the
greatest technology-based enablers of com-
munication between the pharma industry
and healthcare professionals. “In this way, we
are becoming an increasingly critical com-
ponent for improving outcomes and reduc-
ing costs throughout the healthcare system,”
added Febbo.
MARKET EXPANSION
OptimizeRx plans to use a portion of the pro-
ceeds from a recent $9 million raise to make
additional sales and channel investments for
expanding further into its core ambulatory
market where it continues to demonstrate
high ROI for pharma marketing spend.yIt
also plans to further expand into the hospital
market, a new channel for OptimizeRx that
also represents a significant growth opportu-
nity. The company recently partnered with
UK-based Patient Connect, representing the
company’s first expansion into Europe. This
strategic alliance will expand distribution
of OptimizeRx’s digital health messaging to
millions of new healthcare providers and
patients through Patient Connect’s interna-
tional pharmacy and EHR networks.
Patient Connect’s European pharma clients
can now also take advantage of OptimizeRx’s
EHR network in the U.S. eThe companies
sales and support team, and responding to
sales opportunities. Revenue from this new
in 2019.
PLATFORM DEVELOPMENT
OptimizeRx continues investment in the
underlying technology that powers it solu-
tions and is investing in a broader data
strategy. It has hired new technical leader-
ship and increased the size of its software
6
development team.
A new data warehouse represents the
underpinning of a new reporting and data
analytic capabilities that will provide valu-
able insights to its customers. These changes
are expected to support future growth, pro-
vide recurring revenue, and significantly
enhance the company’s value proposition.
“Investments in our growth initiatives
may result in quarterly fluctuations in prof-
itability,” noted company president, Miriam
Paramore, who has been leading these
efforts, “but our shareholders can expect
these investments to drive further strong
topline growth and margin expansion while
sustaining our position as the clear market
leader.”
Any way you look
at it, the company’s
current and in-
development solu-
tions have tremen-
dous market poten-
tial. This potential is President Miriam
being realized more Paramore
and more every day as OptimizeRx expands
its client base and channel reach, and inte-
grates deeper within the ePrescription work-
flow and point-of-care. n
For more information, please visit:
www.OptimizeRx.com
CONTRIBUTING PHOTOGRAPHERS
Isabella Febbo and Tito Febbo
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com

P R O F I L E D C O M PA N Y
Golden arrow resources corporation
G olden Arrow Resources Corporation
is an exploration company with a suc-
cessful track record of creating value by
making precious and base metal discoveries
and advancing them into exceptional depos-
its. Golden Arrow owns a 25% share of Puna
Operations Inc, a joint venture company
operated by SSR Mining, an experienced
precious metals miner. Puna Operations
is producing silver concentrate from the
Pirquitas operation and developing the near-
by Chinchillas silver project, which has more
than 8 years of forecast production and
upside potential.
WhY arGEnTina
Management at Golden Arrow considers
Argentina to be an under-explored country
with highly promising geological potential
stemming from its direct border with some
of the world’s most prolific mining areas
including the El Indio belt, the Maricunga
belt and the Bolivian silver-zinc-tin belt.
  Management’s long tenure in Argentina
and positive track-record of community and
government relations has led to Golden
Arrow’s portfolio of projects containing
over 200,000 hectares of properties. These
projects are strategically located near major
mines and within well-known mining dis-
tricts.
KEY ManaGEMEnT
Mr. Joseph Grosso
EXECUTIVE CHAIRMAN, CEO &
PRESIDENT
Mr. Grosso became one of the early pioneers
of the mining sector in Argentina in 1993
when mining was opened to foreign invest-
ment, and was named Argentina’s ‘Mining
Man of The Year’ in 2005. His knowledge of
www.stocknewsnow.com
Tsx-V: GrG / oTcQB: GarWF / FranKFUrT: G6a
Argentina was instrumental in attracting a
premier team which led to the acquisition of
key properties in Golden Arrow’s portfolio.
He has successfully formed strategic alli-
ances and negotiated with mining industry
majors such as Barrick, Teck, Newmont,
Viceroy (now Yamana Gold) and Vale S.A.,
and government officials at all levels. Mr.
Grosso’s specialty is financing, negotiations,
corporate and marketing strategy, and he
was an early and passionate adopter of best
practices in environmental protection and
socio-economic development through min-
eral exploration. He is the founder and
president of Grosso Group Management Ltd.
Brian McEwen PGeol.
VP EXPLORATION & DEVELOPMENT
Mr. McEwen is a professional geologist with
more than 30 years of exploration and pro-
duction experience in open-pit and under-
ground mining projects and operations. The
extent of his experience is global in managing
numerous projects in Canada, US, Europe,
Asia, Africa and throughout Latin America.
Mr. McEwen›s previous roles include more
than a decade with MRDI (AMEC Peru)
where he was responsible for project man-
agement, economic resource and reserve
calculations for various precious and base
metal companies worldwide, including BHP
Billiton, CM Antamina, Teck, Hochschild
and Phelps Dodge among others.
Alf Hills
DIRECTOR
Alf Hills has over 35 years of international
mine evaluation, development and opera-
tional experience. From 2006 to 2013, he was
the CEO and a director of Kobex Minerals Inc.
and its predecessor company, International
Barytex Resources. Prior to that he spent 26
years with the Placer Dome group. He was
involved in the development of the CIM Best
Practice Guidelines for Mineral Resource
and Mineral Reserve Estimates. Mr. Hills
is registered as a Professional Engineer and
is a graduate of the University of British
Columbia in Mining and Mineral Process
Engineering. n
For more information, please visit:
www.goldenarrowresources.com
The company paid consideration to SNN or its affiliates for this article.
MicroCap Review Magazine 17
 P R O F I L E D C O M PA N Y
Us nuclear corp.
G ood News for Cancer and Heart Disease Patients: US
Nuclear Partner Achieves Critical Milestone Proving
New Way to Fill Multi-Billion/Year Shortage of Radioisotopes
for Diagnostics and Treatments
Bob Goldstein, CEO
18 MicroCap Review Magazine
• The National Academies of Sciences,
Engineering and Medicine warns
about severe shortages of radioiso-
topes that are required to non-inva-
sively diagnose heart disease, cancer,
other health issues, and to treat over
half of all cancers
• Radioisotopes are largely made in
only 5 outdated and unreliable nucle-
ar fission reactors that are all located
outside the United States
• Supply chain effects not yet known
as major radioisotope supplier, NRU
Chalk River Reactor, was permanent-
ly shuttered a few months ago and is
now being demolished
• US Nuclear and their partner
MIFTEC Laboratories, have devel-
oped a revolutionary new way to
produce large quantities of radioiso-
topes at about half the cost of today’s
outdated and unreliable methods
• Critical “1010” milestone toward pro-
ducing radioisotopes recently achieved
by MIFTEC at University of Nevada,
Reno National Terawatt Facility
Medical isotopes are minute amounts of
radioactive substances commonly used to
diagnose and treat cancer, heart disease and
a variety of health issues. Over 40 mil-
pinK: UcLE
lion procedures using radioisotopes are per-
formed each year. They are injected into the
body to facilitate those targeted and whole
body scans to enable doctors to determine
(without the use of invasive, risky and costly
exploratory surgery) whether the heart and
cardiovascular system has adequate blood
flow; whether cancer has spread to a patient’s
bones or elsewhere; and to help diagnose
gallbladder, kidney, thyroid, nerve, brain
disorders, and more. When delivered into a
malignant tumor, isotopes can kill the cancer
cells minimizing damage to nearby healthy
tissue.
Worldwide shortages of radioisotopes
are already impacting the quality of health-
care globally and experts warn about the
likelihood of further deterioration until a
major new source for supply comes on line.
Because they are largely produced in very
expensive and outdated nuclear fission reac-
tors, the availability of radioisotopes is sus-
ceptible to unexpected shut downs such
as the recent breakdown and closure of
the Lucas Heights radioisotope producing
nuclear reactor in Australia and the perma-
nent closure of the big Chalk River NRU
Canadian reactor.
An example of the extraordinarily high
costs to build a nuclear fission reactor today,
and the equally challenging length of time
www.stocknewsnow.com

to build one is Georgia Power’s newest twin
Vogtle reactor that may top initial esti-
mates of $14 billion and reach  $21 billion,
according to recent Georgia Public Service
Commission testimony. The first two Vogtle
Units begun in 1971 took 18 years to build
and were a decade over schedule at a final
price of $9 billion — ten times the original
budget.
The Journal of Nuclear Medicine
Technology says, “The production of medi-
cal isotopes is in crisis and is built on a house
of cards; adequate production is dependent
on 5 aging nuclear reactors that are being
stretched beyond their lifetime operational
capacities. In 2008, the president of the
Society of Nuclear Medicine stated that the
United States and other countries are not
prepared to adequately deal with a shortage
crisis, nor could they anticipate or prevent
additional shortages. Since 2007, as reactor
shutdowns have occurred, nuclear medicine
practitioners throughout North America
and Europe, in particular, have needed to
ration medical isotopes, cancel or postpone
procedures, and pay higher costs for medical
isotopes. This has created ethical problems
surrounding beneficent care for patients,
and rationing decisions are frequently being
made by individual practitioners who may
not have sufficient knowledge or expertise in
effective and sound priority-setting frame-
works.”
www.stocknewsnow.com
Now There is Good News
for Cancer and Heart
Disease Patients
US Nuclear Corp.’s partner, MIFTEC
Laboratories, Inc., has discovered a revolu-
tionary new way to make commercial quan-
tities of radioisotopes in their fusion power
generators. The fusion based method they
are developing is simple, safe, and cost effec-
tive.  It uses an isotope of hydrogen as fuel,
which is derived from seawater, and is simple,
safe, and cost effective compared to the cur-
rent method of using highly enriched or low
enriched uranium (HEU/LEU) that results in
dangerous, long-term radioactive byproducts.
Jerry Simmons, MIFTEC CEO says,
“Neutron flux of 1012  is required to make
radioisotopes in commercial quantities, and
the exciting achievement of 1010 by Dr. Hafiz
Rahman, President and Chief Scientist and
his staff at MIFTEC Labs and the University
of Nevada, Reno National Terawatt Facility,
tells us that our scientific predictions and
device will work as designed. MIFTEC’s
larger and more powerful machine currently
in the design phase is expected to achieve,
and even surpass, the minimum parameter
of 1012 for radiopharmaceutical production.”
US Nuclear Corp. and MIFTEC recently
signed a definitive agreement which formal-
ly names US Nuclear as the exclusive manu-
facturer of MIFTEC’s revolutionary medical
isotope generators for North America and
Asia, and makes US Nuclear a sales rep-
resentative for all MIFTEC products. The
agreement also makes US Nuclear a 10%
equity owner in MIFTEC with the potential
to increase its stake in the near future.
With US Nuclear being designated as
the exclusive manufacturer of the MIFTEC
isotope generators, US Nuclear expects to be
a major market participant in the US$10B
worldwide industry upon reaching final test-
ing and implementation. 
A recent press release from US Nuclear
states:
“We are proud of the many accomplish-
ments reached to date, including:
• US Patent issue for radionuclide
production using Z- pinch neutron
source.
• Ongoing collaborations with the
University of California, San Diego
and the University of Nevada, Reno
National Terawatt Facility for labora-
tory experiments and advancement
of MIFTEC technology
And planned actions:
• Planned production of Mo-99 using
the safe, efficient, environmentally
friendly and scalable Staged Z–Pinch
technology, producing no long-term
nuclear waste
• MIFTEC technology with expected
capability of providing the nuclear
medicine industry with on-site iso-
tope production at a cost savings of
up to 50% of current facilities.”
Bob Goldstein, the CEO of US Nuclear,
graduated from MIT with a degree in
Physics and also has a degree in Engineering
from Stanford. He has authored more than
40 white papers and presentations on radia-
tion measurement and his work has been
met and approved by US Federal  standards
set by the EPA, FDA, and NRC.  He also
works closely with Los Alamos, Sandia and
Jefferson National Labs. His  family’s  first
MicroCap Review Magazine 19

experiences in nuclear physics go back to the
1940’s when  his father was involved in the
historic Manhattan Project that developed
the atomic bomb.
Mr. Goldstein founded US Nuclear and
is known for delivering the most sensitive,
accurate and reliable instruments in the
world. The quality of their work is con-
firmed by a list of loyal and repeat custom-
ers such as NASA, the EPA, Department of
Energy, U.S. Air Force, U.S. Army, U.S. Navy,
MIT, Pacific Gas & Electric, General Electric,
Lawrence Livermore, Oakridge National Lab
and many more.
US Nuclear has enjoyed a long-standing
financial history of stable sales and modest
profitability, but in 2017 the perfect storm
US Nuclear has enjoyed a long-standing financial
history of stable sales and modest profitability, but
in 2017 the perfect storm for new and sustained
growth spawned a sales increase of 50% with
several new very large opportunities blossoming
in the large and underserved radioisotope market,
and the environmental monitoring market that is
forecast to hit $20 billion by 2021.
20 MicroCap Review Magazine
for new and sustained growth spawned a
sales increase of 50% with several new very
large opportunities blossoming in the large
and underserved radioisotope market, and
the environmental monitoring market that is
forecast to hit $20 billion by 2021. For exam-
ple, China is converting all of their coal-
fired power plants that are responsible for
dangerous polluted air and water, to about
200 fission nuclear reactors that all require
the best radiation monitoring equipment in
order to insure safety. The Chinese nuclear
agency claims that each individual nuclear
power plant requires about $8,000,000 in the
highest quality and most reliable radiation
monitoring devices. With World Nuclear
Power Organization’s forecast for a growing
number of nuclear power plants to produce
electricity (none planned to produce radio-
isotopes), the demand for radiation moni-
toring devices also grows.
Other large opportunities for US Nuclear
are their unique products recently offered for
radon mitigation in homes and offices and
the use of drones to mount their sophisticat-
ed monitoring devices. Radon is commonly
found in many homes and is one of the lead-
ing known causes of lung cancer. Goldman
Sachs sees the drone market growing to a
very large size by 2020.
In conclusion, US Nuclear is enjoying
strong growth from its core business, and on
top of that, is well positioned to become a
dominant supplier in a multi-billion-dollar
healthcare market of radioisotopes.
Goldstein says, “Given the failing state of
essential medical isotope production facili-
ties, this first-ever achievement to meet and
exceed the 1010 milestone in fusion neutron
production could not come at a better time.
Additionally, the projected cost savings of up
to 50% over the current imported resources;
the idea of on-site production; the low cost
and shorter time to build the generators, and
the environmental benefit of a non-prolif-
erating process that precludes the hazards
of fission-based methods; should make for
important upgrades ahead in the vital medi-
cal isotope supply chain.” n
For more information, please visit:
www.usnuclearcorp.com
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
 AC C O UN T IN G COR N ER
There’s a New SEC in Town
“T
here’s a new Sheriff in Town.”
Those are words that have
sent chills up the spines of
micro- and small-cap companies for almost
a decade. But the winds have shifted.
Companies can take a breath of fresh air.
Major regulatory change is happening, but,
it’s OK.
Nowhere is that more evident than at the
Securities and Exchange Commission, where
its recently seated chairman, Jay Clayton, has
set into motion a new way of doing business.
More conscious of the intended as well as the
unintended consequences of its actions, the
new SEC is fully committed to protecting the
public, but intends to so without chocking
the life out of the capital markets. Both are
possible.
n BY COREY FISCHER, CPA
www.stocknewsnow.com
That was fully on display when the SEC
Commission adopted amendments earlier
this year that changed the definition of a
“Smaller Reporting Company (SRC);” a fil-
ing status that requires less reporting com-
pliance. Simply said, a lot of bigger com-
panies will now be smaller companies in
the eyes of the SEC. And, that’s a very good
thing.
Under the SEC’s new definition, a com-
pany now can qualify for SRC filing status if
it has public float of  less than $250  million
(formerly $75 million) or alternatively, if
it has less than $100 million (formerly $50
million) in annual revenues and a public
float of less than $700 million (formerly no
public float).
Companies that qualify as a SRC do not
need to comply with the stiffer disclosure
rules required by their larger company breth-
ren. The scaled disclosure requirements  for
smaller reporting companies permit less
extensive narrative disclosures, particularly
in the description of executive compensa-
tion. It also permits them to provide audited
financial statements for two fiscal years,
instead of three.
Although qualifying as a SRC does not
automatically make a registrant a non-accel-
erated filer, Mr. Clayton has directed his
staff to formulate recommendations to the
Commission for possible additional changes
to the “accelerated filer” definition that, if
adopted, would reduce the number of accel-
erated filers and provide a healthy reduction
in compliance costs.   ance, raising debt and equity, mergers and acquisi-
Until that happens, it should be noted that
changing filer status to smaller reporting
company does not necessarily exempt com-
panies from section 404(b) of the Sarbanes-
Oxley Act, which requires an auditor’s
attestation of the adequacy of a company’s
internal financial statement and disclosure
controls -- something deregulation advo-
cates wanted changed, but did not happen.  
Upon adoption of the new rules, Chairman
Clayton said, «Expanding the smaller report-
ing company definition recognizes that a
one-size regulatory structure for public com-
panies does not fit all. These amendments to
the existing SRC compliance structure bring
that structure more in line with the size and
scope of smaller companies while maintain-
ing our long-standing approach to investor
protection in our public capital markets.»
It is encouraging to hear the head of a
regulatory agency speak about fostering eco-
nomic growth and more efficient markets
while concurrently committing to protecting
the public. It is a very different posture for an
agency that for too long measured its success
by the number of its enforcements and the
fines it collected.
Unlike many of his recent predecessors,
Chairman Clayton comes to the position
from the business community, not as a for-
mer prosecutor. It should not be surprising
that he would seek solutions in the market-
place rather than the courthouse. n
Corey Fischer, CPA, is Firm Managing Partner of
Weinberg & Company, a multi-office, PCAOB and
CPAB-Registered firm specializing in the audit,
assurance and tax needs of micro and small cap
companies.  He has more than 25 years of experi-
ence, having worked with the Big 4 accounting firms,
and as an SEC reporting officer for a number of
NASDAQ-listed companies.  Based in Los Angeles,
he is an expert in financial reporting, SEC compli-
tions and structuring accounting operations.
E-mail: coreyf@weinbergla.com or 310-601-2200.
Visit www.weinbergla.com
MicroCap Review Magazine 21
 P R O F I L E D C O M PA N Y
Medical Transcription Billing corp.
Consolidator in the Healthcare IT Market
M
ost people don’t think about
the Healthcare IT market very
often, but it plays a crucial role
in the U.S. healthcare system. Every patient
encounter needs to be documented in a way
that ensures privacy but allows all health-
care providers to access relevant informa-
tion on a patient. Equally as important, the
charges need to be billed in a timely manner,
with sufficient support to ensure payment
is prompt and reimbursement maximized.
Finally, healthcare IT is the key to reducing
the estimated $90 billion of waste which
“administrative complexity” adds to annual
U.S. healthcare spending.
There are more than 1,500 niche compa-
nies providing healthcare IT services similar
to MTBC, none of whom have a market
share greater than 5%. The sector is highly
fragmented and cluttered with competitors
that lack viable business models. This is an
attractive opportunity for a consolidator
like MTBC, which offers an industry leading
software platform, an experienced and cost-
efficient team, and a strong track record of
acquiring and integrating companies in this
sector.
Bill Korn, CFO
22 MicroCap Review Magazine
MTBC (Nasdaq: MTBC)(Nasdaq:
MTBCP), based in Somerset, NJ, was start-
ed in 1999 by a former American Express
executive, Mahmud Haq, based on the needs
he saw first-hand. His wife is an internist,
and was the Company’s first client, and the
business has since grown by focusing on
improving outcomes for doctors like her.
The business went public on Nasdaq in July,
2014, acquiring three smaller competitors on
the day of the IPO.
The vision was simple. MTBC developed
an integrated technology platform, includ-
ing the electronic health record used by
doctors, a practice management system to
schedule patients and check insurance eli-
gibility, mobile apps for the doctors and
patients, coupled with a revenue cycle man-
agement (a.k.a. medical billing) solution,
nasdaQ cM: MTBc
utilizing a team of low-cost, highly skilled
employees in the Company’s offshore loca-
tions, including more than 300 IT and R&D
team members. MTBC was small for a public
company, but intent on growing organically
as well as via acquisitions. The first two years
as a public company were spent integrat-
ing the businesses acquired at the time of
the IPO. “Management focused on building
a scalable platform and doing a series of
smaller acquisitions to perfect its integration
process without diluting investors, which is
important to us since our executive team
and board together own approximately 50%
of MTBC’s common stock”, stated Bill Korn,
Chief Financial Officer.
The late 2016 acquisition of MediGain, the
largest before Orion, helped the Company
demonstrate proof-of-concept as it success-
www.stocknewsnow.com

fully integrated the acquired assets, signifi-
cantly enhanced the acquired division’s core
technology and operations, and eliminated
its losses as it began generating positive
cash from operations and adjusted EBITDA
within six months. “We did this by transi-
tioning work from MediGain’s five offshore
subcontractors into our operations, improv-
ing service while reducing costs. We turned
several large clients, who were unhappy
with the quality of work being performed by
MediGain’s subcontractors, into happy, long-
term clients. A year later, generating record
www.stocknewsnow.com
profitability, MTBC was ready for another
major acquisition”, added Bill Korn.
On July 1, 2018 MTBC closed its biggest
acquisition to date, acquiring the assets of
Orion Healthcorp, Inc. and 13 of its affiliates
(together “Orion”), in an all cash closing for
$12.6 million, thereby avoiding dilution and
debt. The Orion transaction, which repre-
sents more than twice the potential revenue
of MediGain at a very attractive price, is an
even more compelling opportunity to add
value for shareholders.
“The Orion deal marks an inflection point
for MTBC in several ways,” explained Bill
Korn. “It will nearly double the Company’s
size. We expect revenues in the second half of
2018 to be $32 ‒ 33 M, compared to $17 M in
the first half of 2018. This will bring MTBC
to a scale where we expect to be significantly
increasing our profitability in the future.”
MTBC generated positive adjusted
EBITDA for the last five quarters, once the
Company was able to reduce costs from the
MediGain acquisition. Adjusted EBITDA for
the first half of 2018 was $2.5 million, which
was more than adjusted EBITDA for the full
year 2017. Typically, the Company allocates
six months of time to integrate major new
acquisitions, during which it has duplicate
expenses which depresses adjusted EBITDA.
So management has provided guidance to
expect adjusted EBITDA for the whole of
2018 to be $4 ‒ $5 M.
The Orion acquisition opens multiple new
complementary lines of business, including
the following:
• Practice management. MTBC
now manages medical practices through
multi-decade management services agree-
ments. The Company employs nurses, medi-
cal assistants, receptionists, practice man-
agers and other practice personnel in five
locations. This is an attractive new line of
business and may provide opportunities for
growth in the future.
• Group purchasing organization.
MTBC now enables thousands of physicians
to purchase vaccines from leading phar-
maceutical companies at discounted rates.
As they purchase discounted vaccines, the
Company generates referral fees from its
pharmaceutical industry partners. In the
coming months, MTBC expects to make this
service available to all existing customers
and investing marketing and sales resources
to expand the user base, while also cross-
selling its other solutions.
• Niche hospital services. MTBC
now provides innovative solutions to com-
munity hospitals that are beyond the scope
of its traditional revenue cycle management
offerings. For example, with the Orion acqui-
sition, the Company now has employees who
work onsite at hospitals to assist clients and
their patients in effectively addressing insur-
ance eligibility and related needs. MTBC’s
employees also provide other unique con-
sulting and revenue cycle management solu-
tions to hospital clients. “We look forward
to offering these unique solutions to our
existing hospital revenue cycle management
clients and exploring additional opportuni-
ties for growing this line of business,” stated
Stephen Snyder, Chief Executive Officer.
Since Orion brings MTBC new services,
it opens the door to cross-selling oppor-
tunities. For example, MTBC could offer
MicroCap Review Magazine 23
the discounts of its new group purchasing
organization to existing clients, and offer
revenue cycle management and electronic
health records to its GPO members. The
Company can market its new hospital ser-
vices to its existing hospital clients.
Another promising source of future
growth will be talkEHR™, MTBC’s next gen-
eration SaaS EHR solution, which utilizes
natural language processing and artificial
intelligence to automate key components of
patient charting and reduce manual tasks
and errors. talkEHR features Allison, a
voice-activated virtual assistant that lever-
24 MicroCap Review Magazine
ages artificial intelligence to provide “smart”
navigation and contextual responses to phy-
sicians’ queries to reduce administrative bur-
dens and improve the patient experience.
Mahmud Haq, MTBC’s founder and
Executive Chairman stated “our vision with
Allison is to enable healthcare providers to
practice more efficiently and deliver a higher
level of patient care. talkEHR is offered com-
pletely free of cost to U.S. healthcare provid-
ers. talkEHR users are also eligible to upgrade
to MTBC’s premium, end-to-end medical
billing solution, which is offered at one of the
lowest price points in the industry.”
MTBC has financed its recent acquisi-
tions by selling shares of its publicly-traded
non-convertible preferred stock (Nasdaq:
MTBCP). Bill Korn explained: “the pre-
ferred shares, originally issued in November
2015, pay monthly cash dividends at an
11% annual rate. Preferred shareholders are
comfortable with our track record of mak-
ing monthly dividend payments for near-
ly three years, and common stock holders
appreciate that there is no fixed redemption
requirement, no covenants to jeopardize the
Company, and that the preferred shares are
NOT convertible, so they minimize dilu-
tion.” Having two Nasdaq-traded securities
gives MTBC more flexibility with financing
than most small cap businesses.
For more information about MTBC,
please visit ir.mtbc.com/events. You will be
able to listen to videos by the management
team, download the investor presentation,
or listen to the most recent earnings call. n
For more information, please visit:
www.mtbc.com
This article may contain forward looking statements.
See MTBC’s periodic filings with the Securities and
Exchange Commission for more complete information.
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
 P R O F I L E D C O M PA N Y
Tsx: FcU / oTcQx: FcUUF
Fission Uranium corp.
Focus on Acquisition and Development of Minerals
Properties in Canada’s Athabasca Basin
F
ission Uranium Corp (Fission)
is a mineral exploration company
engaged in the acquisition and devel-
opment of evaluation assets. Fission discov-
ered and owns the award-winning PLS proj-
ect located in the world’s most prolific region
for high-grade uranium - the Athabasca
Basin in Northern Saskatchewan, Canada.
Fission is one of, if not the most, successful
exploration companies in the uranium sec-
tor led by a highly decorated team including
Dev Randhawa, CEO
CEO and Chairman Dev Randhawa and
President, COO & Chief Geologist Ross
McElroy.
PLS contains the Triple R deposit which
includes five mineralized bodies and approx-
imately 140 million lbs (indicated and
inferred) of uranium making it one of the
largest undeveloped discoveries in history.
Fission is classified as an advanced stage
www.stocknewsnow.com
junior now focusing on developing the proj-
ect after making the discovery in 2012. The
company completed a robust preliminary
economic assessment (PEA) in 2015 high-
lighted by a $1.02 billion after-tax net pres-
ent value at a 10% discount rate and a 34.2%
after tax internal rate of return, assuming a
long-term price of u308 at $65/lb. Currently,
Fission is working toward a prefeasibility
(PFS) and expects that to be released some-
time before the end of 2018.
Many tangibles and intangibles separate
Fission from its uranium counterparts. From
a project perspective, the deposit is located
near surface and is shallow which enables
the company to develop a cost-effective,
hybrid mine plan utilizing both open pit
and underground methods. Another key
tangible of the project is how rich the deposit
is, which again, is attributed to being in the
MicroCap Review Magazine 25
Athabasca basin. Global uranium grades
are approximately 0.20% u308, while the
Athabasca basin is host to approximately
2% u308 – a staggering ten times more valu-
able. The province of Saskatchewan is also
a mining friendly jurisdiction, evidenced by
the Fraser Institute consistently ranking it
in the top three jurisdictions globally. This
point should not be discounted as govern-
ments globally have been known to add risk
and uncertainty to projects often moving
the goal posts and subsequently creating
capital destruction. This isn’t the case in
Saskatchewan as there is a 60-year history of
extracting uranium from the province, pri-
marily from the eastern side of the Athabasca
basin. In addition to that, this area has roads,
water and existing infrastructure which will
eventually aid in lowering overall costs.
Fission’s management team is in a league
of their own when is comes to mineral explo-
ration and development. While many market
participants and conventional wisdom was
focused on the eastern side of the basin – an
area that has been host to the world’s richest
uranium mines, Fission thought outside the
box. The company came up with an innova-
tive strategy to fly an airplane directly above
the tree canopy covering the western edge
of the basin using radiometric and magnetic
surveys. This technology and strategy yield-
ed a boulder field that eventually Fission
tracked back to the west shore of Patterson
Lake. On November 5th, 2012, Fission had
discovered Triple R and have not looked
back. Randhawa and McElroy had cre-
ated wealth changing shareholder value once
again, for the fourth time. Management’s
experience is fundamental in mining and
mineral exploration due to the inherit boom
bust cycles commodities experience. Fission’s
experience is second to none as Randhawa is
a 22-year veteran CEO in the uranium space,
while McElroy has made been involved in
five major discoveries already in his 30-year
career including two for Fission. Mineral
exploration is arguably the hardest ‘game in
town’ and despite anecdotal evidence that
may suggest there should be a deposit here
26 MicroCap Review Magazine
or there, this team has proven their expertise
by taking a shell in 1996 called Strathmore
Minerals and turning it into four existing
companies today.
Fission’s success has not gone unnoticed
by sophisticated investors and strategic part-
ners. In Randhawa’s and McElroy’s previ-
ous companies they built the trust of some
industry giants and savvy resource investors.
Specifically, Rick Rule and his team at Sprott
are believers in Fission and are existing
shareholders. For any investor unfamiliar
with Rick Rule, he claims to have made his
initial life changing fortune from a previous
uranium bull market (more on that later).
On the institutional side, Randhawa and
McElroy have a history of making a discov-
ery, finding an Asian partner to invest and
develop the project, and then later sell it.
With Fission, the erudite Chinese General
Nuclear Power Group (CGN) became a
19.99% owner with a massive CAD $82.2
million-dollar deal in Q4 2015, paying a 25%
premium to the share price at the time mark-
ing the first time a Chinese company directly
invested in a Canadian uranium company.
Déjà vu all over again as this is exactly
what this team did with previous exploration
and development assets such as Sumitomo
of Japan through Strathmore Minerals and
Kepco of Korea through Fission Energy
Corp.
Management, jurisdiction, government,
technical teams, and geology are all very
important, but the spot price of uranium
ultimately sets the market and things have
been unsustainable for a while now creating
a perfect storm for investors. The industry’s
average all in cost is roughly $40 - $45 per
pound u308. Uranium prices have not been
achieving their cost of capital for at least five
years, as the spot price has been below $45/
lb since 2013 and was as low as $18/lb in Q4
2016. How is that even possible one might
ask? Uranium is unique in that buyers are
typically utility companies procuring supply
for base load power, also known as the power
grid, as well as governments for matters of
national security. These buyers secure sup-
ply by buying long term contracts at fixed
prices directly from producers, historically
between five and ten years. If buyers secure
enough supply for the next 5 – 10 years, the
spot market can become irrational and an
unrealistic proxy for the market. To give
you a quick sample of spot prices in recent
history, in the early 2000’s the price was less
than $10 dollars per pound. By 2007 prices
peaked at almost $140/lb, while today they
rest at approximately $25/lb. This volatility
www.stocknewsnow.com

can be attributed to both the long-term con-
tracts, as well as how little uranium fuel rods
represent in the cost of running a nuclear
reactor. Fuel rods (enriched uranium) have
historically accounted for roughly 2% - 5%
of running a nuclear reactor, thus the market
fosters these surpluses and shortages that
directly distort the spot market like we see
today. From an investors standpoint how-
ever, this should be seen as an opportunity
as not a single producer, or future producer
regardless of how rich the grade is would be
able to make money sub $40 dollars. This
does not factor profit margins required for
future investment which is paramount in
creating a sustainable market for exploration
and development when demand increases.
In other words, the uranium spot price in
inelastic.
The fundamentals for uranium have finally
crossed as 2018 will mark the first-year demand
has outstripped supply by a meaningful margin,
suggesting the lengthy bear market is over and a
new bull is a born.
www.stocknewsnow.com
Uranium is often associated with the stig-
ma of nuclear warheads and weapons of
mass destruction, but that is an elementary
viewpoint completely missing how vital this
metal is to humankind and the accustomed
higher standard of living experienced in
today’s world. As an example, many would
be surprised to know that 20% of U.S. elec-
tricity is sourced from nuclear reactors.
On a global scale, uranium still supplies
between 15% and 17% of electricity and has
maintained that weighting despite the recent
advancements from other forms of energy.
Uranium is an attractive energy source for
several reasons. First, it is a form of base load
power – an attribute “in vogue” renewables
do not possess such as wind and solar. For
many heavy populated areas of the world
that experience rolling blackouts, base load
power is a necessity. Secondly, the world is
pushing for a ‘greener and cleaner’ mandate
of which uranium can support because reac-
tors do not emit any carbon like other cheap
forms of base load power such as coal. Third,
it is a very cheap form of energy separating
itself from other substitutes such as renew-
ables that are significantly more expensive
that also absorb large land masses. Quite
simply nuclear reactors are efficient, reliable,
cheap, and clean.
The fundamentals for uranium have final-
ly crossed as 2018 will mark the first-year
demand has outstripped supply by a mean-
ingful margin, suggesting the lengthy bear
market is over and a new bull is a born. Due
to the overinvestment made by utilities at
peak prices roughly a decade ago a glut of
inventory in the secondary market pushed
the spot price from $140/lb to where it is
today but those inventories have been drawn
down to levels requiring action from market
participants. Couple that with the fact most
of the long-term contracts are maturing in
the next few years and you have the potential
for a ‘rip your face off ’ bull market where the
price slingshots back to sustainable levels,
putting the industry back into equilibrium.
Much of this demand can be credited to
both the numbers of new reactors being built
globally right now, predominately in India,
China and Saudi Arabia. That is in addition
to the record number of reactors operating
globally right now.
After a very difficult past decade the ura-
nium market presents an accretive oppor-
tunity for investors looking for value or
diversification in their portfolios. Prices are
at unsustainable levels for both explorers and
producers at a time when demand is out-
stripping supply, which is what value inves-
tors should look for when allocating capital.
Fission Uranium has a world class asset, with
an award-winning team, in a stable jurisdic-
tion, in the biosphere’s most fertile region for
high grade uranium deposits. n
For more information, please visit:
www.fissionuranium.com
The company paid consideration to SNN or its affiliates for this article.
MicroCap Review Magazine 27
 AUSTRALIA CORNER
Undiscovered Down Under
T he Australian equity market provides a plethora of undiscovered microcap companies for US investors
who invest time researching stocks listed on the Australian Securities Exchange (ASX).
This piece provides a brief overview of the
Australian microcap market and highlights
6 ASX microcap stocks which exhibit some
of the diversity, found on the ASX.
asx Microcap MarKET
oVErViEW
The ASX has circa 2,100 stocks listed on
the exchange. The S&P/ASX 200 Index is
widely used as the main barometer for the
performance of the Australian equity market.
However, outside of the top 200 largest stocks
is an extremely long tail of microcap stocks
for investors to delve into. Microcap stocks,
for the most part, are largely overlooked by
both Australian and international investors.
The ASX provides its own microcap index,
the S&P/ASX Emerging Companies Index.
Comprising of 156 stocks currently with a medi-
an market cap of AUD$204m/USD$150m. The
index is heavily weighted to both the materials
and technology sectors which make up 27.2%
and 15.7% of the index respectively. Other size-
able sectors include Consumer Discretionary,
Healthcare and Energy. The S&P/ASX Emerging
Companies Indexes composition differs vastly
to that of the S&P/ASX 200 Index which has
a sector weighting of 33% to financials, caus-
ing the performances of both indexes to differ
widely from each other. Notably, the S&P/ASX
Emerging Companies Index has outperformed
the S&P/ASX 200 Index over the last 1, 3 and
n BY MARK TOBIN
28 MicroCap Review Magazine
5 years.
The incumbent ASX CEO Dominic
Stevens has endeavored to a drive an increase
in the number of international stocks listed
on the ASX. In an attempt to showcase the
ASX as an alternative listing venue to either
the Nasdaq or the AIM in London. He has, I
would say had moderate success and a num-
ber of international microcap stocks have
listed on the ASX in the last 2 years. These
stocks have come primarily from the US,
Israel and Europe.
LacK oF BroKEr rEsEarch
Australian microcaps lack quality research
coverage from broking firms much like their
US counterparts. Research coverage has
actually been falling in the last few years
despite the good performance of microcaps
stocks versus large-cap stocks.
An analysis conducted on the breath of
broker coverage for ASX microcaps stocks
in 2017 found that outside the top 100
ASX stocks approximately 70% of stocks
have no current broker coverage whatsoever.
Equating to roughly 1,400 ASX listed stocks
with no current broker coverage.
Research released earlier this year by
Goldman Sachs Australia highlighted some
salient points about small cap stocks listed
on the ASX. I would contend the results
would prove similar for ASX listed microcap
stocks, if not even more pronounced.
• Stocks with less broker coverage had
lower valuations when measured on
a price to book or price to sales basis.
• The total number of stocks with any
broker coverage is falling.
• The total number of stocks with mul-
tiple brokers covering them is also
falling. In other words, brokers are
starting to converge around a small
group of stocks leaving others with
only one broker providing coverage
or no broker coverage at all.
incrEasinG inForMaTion
asYMMETrY
This dearth of coverage by the broking com-
munity means there is an increasing level of
information asymmetry to be exploited in
order to generate alpha for investors.
I can also point to some empirical evidence
to back up this assertion. The S&P Dow
Jones SPIVA Scorecard for Australia is the
gold standard in my view of tracking if active
managers as a cohort actually outperform
their relevant benchmarks. While the SPIVA
scorecard does not segment Australian micro-
cap equity funds as a specific cohort it does
segment Mid and Small-cap equity funds.
The 2017 SPIVA Australia scorecard found
that 60% of Mid and Small-cap equity funds
outperformed their benchmark on a ten-year
basis. The equivalent US figure for Small Cap
equity funds was less than 5%.
IIR itself tracks the performance of 23 dif-
ferent Australian microcap funds of which
15 have a 3-year track record or longer.
Within this subset, the average Australian
microcap fund manager returned 17.7%
annualized after fees over the last 3 years. 11
of the 15 (73%) funds outperformed the S&P
Emerging Companies Index which returned
15.8% annualized over the last 3 years.
six asx Microcap sTocKs
Scout Security (SCT: AU) Mkt Cap
AUD$14.7m is a US company newly listed on
the ASX. SCT seeks to disrupt the residential
security industry by retailing Wi-Fi enabled
www.stocknewsnow.com
security cameras and associated products.
Their products are then linked to a monitor-
ing app on your phone. The monitoring app
requires a monthly subscription so SCT has
been building a recurring revenue base over
time. SCT’s product integrates with Google
Nest, Amazon Alexa and Samsung Smart
things. Its US resale partners include COPS
Monitoring & Zega. It also retails on Amazon
and is an Amazon Alexa portfolio company.
Fertoz (FTZ: AU) Mkt Cap AUD$19.1m
is a US organic phosphate fertilizer company
supplying the burgeoning North American
organic farming industry. Fertoz exceeded
its goal of 10,000 tpa in sales for CY2018 by
the end of April 2018 and is targeting sales of
100,000 tpa within the next 3 years. It is also
working closely with organic cannabis grow-
ers in Canada ahead of regulatory changes
envisaged in that market in the next year.
Kip McGrath Education (KME: AU) Mkt
Cap AUD$26.1m is an elementary and high
school tutoring franchise providing individ-
uals with the opportunity to open their own
tutoring business. KME currently operates
in Australia, New Zealand, United Kingdom
and South Africa. It has recently concluded
a major capex expansion project for its
core operating system and online tutoring
platform. KME is also working on the USA
curriculum as part of a plan to enter the US
market in the medium term.
Veem (VEE: AU) Mkt Cap AUD$74m
is a 50-year-old Australian company which
recently listed on the ASX. VEE supplies pro-
pellers, fin systems, gyrostabilizers and other
specialist components to an array of industries
but primarily to shipbuilding companies. VEE
has a particular focus on gyrostabilizers for
defence vessels and superyachts. VEE recently
concluded sea trials with Dutch shipbuilders
Damen (2nd largest in Europe) for the use of
VEE’s new generation gyrostabilizers on one of
Damen’s new fast crew supplier vessels. Sea tri-
als were a success and Damen are progressing
commercial discussions with VEE on orders.
Given that Damen delivers 160 vessels annu-
ally, employs 10, 000 staff globally and supplies
vessels into 100 different market around the
www.stocknewsnow.com
world this marks a significant vote of confi-
dence in VEE new product offering.
iSignthis (ISX: AU) Mkt Cap AUD$137m
provides remote online identity verification
and payment services to a host of e-com-
merce and bricks and mortar merchants
both in Australia and Europe. It recently
became a principal member with Mastercard
for Australia following on from principal
member status with Visa and Mastercard
in Europe. ISX received membership of the
interbank SWIFT network and certification
for Eurosystem Central Bank facilities and
account earlier in 2018. These developments
allow ISX to avoid having to overlay their
services on partner bank infrastructure and
networks. All which should improve ISX’s
costs of goods sold moving forward.
PWR Holdings (PWH: AU) Mkt Cap
AUD$280m is a world leader in the design,
development and production of automotive
cooling solutions. PWH manufactures high-
performance aluminum radiators, intercool-
ers and oil coolers. Its race cooling solutions
are used by leading race categories and
teams such as F1, NASCAR, IndyCar, V8
Supercars and World Rally Championship.
PWH acquired US-based C&R racing in
2015 and has invested AUD$3.5 to grow its
US business. The majority of PWH’s revenue
comes from high-performance racing but is
currently diversifying into the auto aftermar-
ket and OEM market with its products.
Conclusion
Hopefully, US investors will recognize the
latent opportunity which exists in ASX
microcaps. Similarly, I believe it would be
of great benefit to ASX microcaps to actively
engage with US investors given it is the larg-
est capital market in the world leading to a
mutually beneficial outcome.
IIR Corporate Bio
For IIR I think we can use the previous bio
used in the Microcap Review Spring 2018
edition when John did his article.
Mark Tobin Senior Analyst at IIR
After graduating with a Master’s Degree in
Economic Science from University College
Cork in Ireland in 2004 Mark spent several
years working as a hedge fund accountant both
on the service provider side and the client side
in Dublin, London and Sydney. During which
time he attained Fellowship of The Association
of Chartered Certified Accountants one of the
largest professional accounting bodies in the
world. Mark then changed careers becoming a
small cap equity analyst with highly respected
Australian fund management group Wilson
Asset Management in Sydney. After a few
years working in Sydney, Mark relocated to
South Africa for family reason and took up
an opportunity to work at the coal face of the
family food business so has actually worked in
small business and gained a day to day opera-
tional perspective of what it is like to run a
small company. Mark has been providing ASX
microcap consulting services to IIR for the last
couple of years and is a regular contributor
to Australian financial media on microcaps.
Mark maintains an extensive network of rela-
tionships with Australian microcap fund man-
agers, brokers and companies in the Australian
microcap space. n
For more information, please visit:
www.independentresearch.com.au
Mark Tobin Disclosure
Mark personally I don’t own or have never owned
any of the stocks profiled.
IIR disclosure
IIR may have provided research services to some or
all of these companies in the past or may do so in
the future.
 
Regards
Mark Tobin
Senior Analyst
Independent Investment Research
Level 1, 350 George Street, Sydney, NSW 2000
Sydney Ph: +61 (2) 8001 6693 Main
Sydney Ph: +61 (2) 8091 5216 Direct 
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 29
 PPMT Capital Advisors, Inc. DO WE HAVE
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 P R O F I L E D C O M PA N Y
Buddy platform Limited
ASX-listed microcap making spaces smarter around the world
T
he Internet of Things (IoT) has
entered the mainstream vernacular
and its transformative effects can be
seen across all industries and regions. One
company, Buddy Platform Limited (“Buddy”,
ASX:BUD), is tapping into the IoT to bring
simple and affordable solutions to its cus-
tomers to increase energy efficiency, create
smarter infrastructure and apply more pro-
active, data-driven decision making. Based
in Seattle – the global ground zero for cloud-
tech, and featuring Microsoft Corporation
amongst its earliest investors and closest
partners – Buddy is a prime vehicle for
investing in smart city based IoT technolo-
gies. Worldwide spending on the IoT is set to
reach $772.5 billion in 2018, a 14.6 percent
increase over the $674 billion spent in 2017
and is expected to surpass the $1 trillion
mark in 2020 and reach $1.1 trillion in 2021.
Against the backdrop of the global move-
ment toward more energy efficient practices
(Paris Climate Agreement, United Nations’
17 Sustainability goals, etc.) and with build-
ings consuming 70 percent of all electric-
ity and emitting 40 percent of all green-
house gases around the world, Buddy saw
an opportunity to develop engaging tech-
nology to make it easy for people to gain
insights and make more informed decisions
that positively impact their businesses, their
communities and the environment. “Simply
put, Buddy’s vision is to make every space
smarter,” said David McLauchlan, CEO of
Buddy Platform.
The company’s Buddy Ohm resource
www.stocknewsnow.com
asx: BUd / pinK: poTTF
monitoring solution is used by commer-
cial building operators, schools, hotels, and
others to simplify building operations and
provide peace of mind by harnessing real-
time utility and operational data to reduce
or mitigate risk, improve operations, savings
and sustainability. The product is distributed
around the globe by the world’s largest tech-
nology distributor, Ingram Micro.
The backbone of Buddy Ohm is the Buddy
Cloud that enables ubiquitous access to and
storage of data from any environment in
support of smarter, healthier spaces. Any
spaces. Originally developed to connect
disparate systems within smart cities and
buildings, Buddy’s technology is now inside
Airstream’s 2019 Classic travel trailer coor-
dinating communication between the trailer,
Buddy Cloud and the RV owner. It enables
functions such as lighting, air condition-
ing, awnings, water, propane, battery levels
and more to be controlled and monitored
remotely, transforming the user’s experience
and comfort.
The company attributes much of its suc-
cess to the stable of talent it has man-
aged to attract. The company boasts former
Microsoft, Amazon and Google employees
amongst its ranks, including a former manu-
facturing executive from Microsoft’s Xbox
division and later Sonos, with responsibility
for manufacturing the Buddy Ohm hardware
product line. In an industry where engineer-
ing, business and strategic talent make all
the difference, Buddy is punching well above
its weight.
From connecting functions and amenities
within trailers to monitoring energy resourc-
es within buildings, to unifying city infra-
structure, Buddy offers affordable, smart
connectivity and monitoring solutions for
many IoT use cases.
The Buddy Ohm solution is made up of
IoT class hardware, secure and scalable
data infrastructure, an operations portal,
engaging occupant-facing dashboards
and a mobile installation app.
aBoUT BUddY
Buddy Platform Limited (BUD.ASX) provides
simple, affordable and engaging solutions for
customers of any size to make their spaces
smarter and their occupants more efficient,
environmentally-aware and informed. Buddy
Cloud, Buddy Ohm and Parse on Buddy are
the company’s core offerings that empower
its customers to fully leverage digital tech-
nologies and their impact in a strategic and
sustainable way. Buddy Cloud enables ubiq-
uitous access to and storage of data from any
environment – recreational vehicles, schools,
commercial buildings or an entire city – in
support of smarter, healthier spaces. Buddy
Ohm is a resource monitoring solution that
simplifies building operations and provides
peace of mind by harnessing real-time utility
and operational data to reduce or mitigate risk
and improve operations, savings and sustain-
ability. Parse on Buddy is a mobile backend
as a service (mBaaS) built on the world’s most
popular BaaS technology. Buddy Platform is
headquartered in Adelaide, Australia, with
offices in Seattle, Washington. n
For more information, please visit:
www.buddy.com
The company paid consideration to SNN or its affiliates for this article.
MicroCap Review Magazine 31
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 P R O F I L E D C O M PA N Y
Tech Mpire Limited
T
ech Mpire Limited (ASX: TMP)
provides a global business-to-
business (B2B) software-as-a-ser-
vice (SaaS) patent-pending product called
TrafficGuardTM, which addresses the rapidly
growing global problem of mobile advertis-
ing fraud. Having already secured its two ini-
tial SaaS clients - Canadian-based ClearPier
(http://clearpier.com/) and US$15 billion
NYSE-listed Omnicom (http://www.omni-
comgroup.com/) - TMP is now focusing on
growing SaaS sales through North America
and APAC.
Advertisers are forecast to lose US$19bn
to digital advertising fraud in 2018, increas-
ing to US44bn in 2022 (Juniper Research).
Advertising fraud is becoming increasing
sophisticated, with the rise of “human click
fraud farms” and other techniques designed
to defraud advertiser budgets.
TrafficGuardTM’s solution is disruptive
because it prevents mobile phone app install
fraud at the “click level”, as opposed to
the existing industry practice of analyzing
the quality of mobile app installs “after the
event” through companies called mobile
measurement platforms.
TrafficGuardTM is based on unique intel-
lectual property. It has been fully developed,
tested and operated in-house by a team of
www.stocknewsnow.com
“We are proud of our team of 15 data scientists
who have analysed trillions of advertising campaign
data points to develop TrafficGuardTM . We are
looking forward to helping advertisers globally to
fight back against digital advertising fraud.”
data scientists who have analysed the data of
millions of advertising campaigns. TMP was
previously an Advertising Network, which
allowed the company to directly observe the
global fraud epidemic and feel compelled to
develop an anti-fraud solution.
The Company is not aware of any other
comparable offering which stops fraud at the
click level.
COO and Co-Founder Luke Taylor said,
“Previously, we had been operating as an
Advertising Network for many years and
observed that our clients were increasingly
concerned about the growing digital adver-
tising fraud epidemic. We are proud of our
team of 15 data scientists who have analysed
trillions of advertising campaign data points
to develop TrafficGuardTM . We are looking
forward to helping advertisers globally to fight
back against digital advertising fraud.”
TrafficGuardTM was launched as a global
SaaS solution on 1 July 2018 and is now ready
to scale globally, targeting three key custom-
ers segments: Media Agencies, Advertising
Networks and Direct Advertisers.
Media Agencies are diversified, global cor-
porates with multi-billion dollar advertising
services revenues. TMP’s first Media Agency
client is Omnicom Media Group, who has
initially licensed the SaaS technology for
1-year.
asx: TMp
Mobile Advertising Networks help adver-
tisers find mobile app installs through
the mobile app ecosystem. TMP’s first
Advertising Network client is Canadian per-
formance marketing business ClearPier.
Direct Advertisers are businesses pro-
moting their own apps without an agen-
cy. TMP has developed a “user-driven”
TrafficGuardTM software interface which
allows Direct Advertisers to prevent app
install fraud.
CEO Mathew Ratty said, “Ad fraud is
becoming increasingly sophisticated in
order to evade detection by conventional
anti-fraud tools. TrafficGuard’s multi-point
fraud verification blocks fraud before it
impacts our clients’ budgets. This is vital in
not only protecting media spend from fraud,
but reducing the time it takes to manually
adjust accounts with delayed fraud report-
ing.
After having developed and tested our
technology internally, we are pleased to have
the validation of our initial clients. We now
look forward to enabling more customers
globally to prevent mobile advertising fraud
and grow their businesses with genuine
mobile app installs.” n
For more information, please visit:
www.techmpire.com
The company paid consideration to SNN or its affiliates for this article.
MicroCap Review Magazine 33
 Contract SEC Quarterly Monthly Board Of Financial
CFO Fillings Closing Reporting Directors Projections

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GROUP

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34 MicroCap Review Magazine (310) 800-7175
www.stocknewsnow.com
 P R O F I L E D C O M PA N Y
race oncology Ltd.
R
ace Oncology (ASX: RAC) is an
ASX-listed company specializes in
de-risked drug assets that have a
fast pathway to market. Race’s first asset
is a cancer drug called Bisantrene, which
shows great promise in a difficult-to-treat
blood cancer called Acute Myeloid Leukemia
(AML).
Each year, around 20,000 people in the
US are diagnosed with AML and 75% of
people die within 5 years. The standard of
care for AML is old-fashioned chemotherapy
and although it leads to a remission in most
cases, unfortunately, the cancer often returns
(the AML relapses) and the disease can be
resistant to further chemotherapy treatment
(‘refractory’).
20-30% of adult AML patients can end
up as relapsed and/or refractory (r/r) AML
patients. It is for these r/r AML patients that
Bisantrene is targeted: In five Phase 2 stud-
ies, Bisantrene produced a remarkable 48%
new remission rate in r/r AML patients.
Race’s goal is to conduct the final Phase
Peter Molloy, Chief Executive Officer
www.stocknewsnow.com
Bisantrene 250mg in vials
3 registration study for Bisantrene in order
to hopefully see the product approved by
the FDA for the treatment of r/r AML in
adult patients. While AML is considered
an ‘orphan disease’ because of the relatively
small number of patients, the market poten-
tial for a drug like Bisantrene is still substan-
tial. Race believes that a successful approval
in adult r/r AML could make Bisantrene
worth several hundred million dollars to a
potential licensee or acquirer.
The next milestone for Race is to file an
IND (Investigational New Drug application)
with the FDA, under which it can complete
the final steps towards FDA approval of
Bisantrene for the treatment of adult AML in
the US. That IND could be filed as early as
Q1 2019. The multinational trial could take
3-4 years to complete, but RAC may seek
a pharmaceutical partnership prior to trial
completion.
In addition, Bisantrene has been designat-
ed by the FDA as a potential treatment for
rare pediatric (childhood) forms of AML.
This ‘Rare Pediatric Disease’ designation
means that Bisantrene could qualify for a
Priority Review Voucher (PRV) which is
asx: rac
Bisantrene lyophilized powder and
reconstituted solution for administration
awarded by the FDA as a mechanism to
stimulate development of drugs for rare
diseases that would not otherwise justify
the development cost. Importantly, the PRV
be sold to other pharmaceutical companies
and in recent years, PRVs have sold for more
than $80 million per voucher.
Finally, outside the US, RAC is pursu-
ing clinical usage of Bisantrene under early
access programs known as Named Patient
Programs (NPP). NPPs allow doctors to
obtain access to drugs that are unlicensed
(not yet approved) in their country, but are
needed for life-saving treatment of diseases
like AML. In some countries, mechanisms
exist for reimbursement or payment for the
drugs, leading to modest sales revenues.
RAC is exploring the opportunity for NPP
revenues in France, Italy, UK and other mar-
kets outside the US. n
For more information, please visit:
www.raceoncology.com
The company paid consideration to SNN or its affiliates for this article.
MicroCap Review Magazine 35
 P R O F I L E D C O M PA N Y
Tinybeans Group Limited
Happy memories for every family
T
inybeans was born in 2012 in
Sydney, Australia and much like the
babies in its journals, has grown tre-
mendously, hitting major milestones along
the way.
Entrepreneurs Sarah-Jane Kurtini and
Stephen O’Young created a platform where
parents could save and share milestones
for their kids in a more secure way than
traditional social media. They were quickly
joined by Eddie Geller, who came on board
as a founder, investor and CEO in 2013.
“Our vision is to create a space where mil-
lions of families can effortlessly capture and
share their kids’ stories. In the beginning we
were focused on private photo sharing, but
over time it’s grown to so much more. Every
moment with your child is worth remem-
bering and Tinybeans makes that easy and
convenient,” said Geller.
From that small sprout in Sydney,
Tinybeans has grown to add headquarters
in New York and is now a must-have app for
every new parent, with 5-star reviews in the
Apple App and Google Play stores.
Popular with millennials who want to
keep their children away from the prying
eyes of Facebook, Tinybeans helps families
organize all their children’s firsts using pho-
tos and video, text and more in one spot with
36 MicroCap Review Magazine
asx: TnY / pinK: TnYYF
unlimited safe and secure storage. Tinybeans
also automatically shares with extended fam- looking for advice on what to buy and we’re
ily like grandparents, in a platform-agnostic there with age-appropriate recommenda-
way, with no smartphone required. tions,” said Geller.
“We want to provide for parents a product Looking ahead, TInybeans has cash in the
that meets the needs they have now around bank and solid runway, thanks to a recently
organizing their children’s stories and shar- closed round of funding, and it is working
ing,” said Geller, “and the needs they don’t towards enhancing time in-app, engagement
even know they have yet, like easy ways to and increasing revenues across all lines. With
look back on those first moments and con- the advertisers in place like Amazon, Canon
venient ways to print.” and Macmillan Books to name a few, Tinybeans
Tinybeans has built a deeply engaged user is well positioned for a successful future.
base serving 2.5 million, primarily in the Tinybeans is traded ASX: TNY / PINK:
U.S, but reaching over 200 countries. TNYYF n
Along with user growth of 41% year-over-
year, Tinybeans has exhibited strong revenue For more information, please visit:
tinybeans.com/investor
growth. Thanks to hyper-targeted advertis-
ing, premium upgrades at $50 USD per year,
printed products, affiliate revenue and spe-
cialised research, Tinybeans revenue grew by
65% last year. Premium subscription revenue
has grown by over 30% and advertising has
more than doubled.
“We allow advertisers to reach families at
the moment they’re researching what they
need for the next stage of baby’s develop-
ment. And we speak to entire family, so
parents, but also grandparents, and aunts
and uncles. Oftentimes grandparents are
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
www.stocknewsnow.com MicroCap Review Magazine 37
 P R O F I L E D C O M PA N Y
Family Zone
F
amily Zone was founded by an
experienced team of global telecom
executives who identified a massive
unsatisfied cyber safety marketplace and a
truly disruptive solution.
Family Zone has developed a world first
ecosystem that enables a parent-set access
policy to roam with a child and be enforced
across any device and any network. At home,
on mobile devices, at public hotspots and
schools. Family Zone’s innovation is a univer-
sal approach, delivered through a cloud-based
policy platform and a suite of apps, applica-
tions, access points and network appliances.
Developed in Australia in late 2016,
Family Zone’s ecosystem approach is rapidly
gaining traction across consumers, telcos,
schools and device manufacturers through-
out Australia, New Zealand, South East Asia,
India. Family Zone has recently entered the
United States of America.
In operation for less than 24 months the
company has achieved remarkable success
including:
• Family Zone is now the leading
cyber safety provider in independent
Australian & New Zealand Schools;
• Family Zone has wholesale partnerships
with some of the largest telecommuni-
cations providers in the world including
Vodafone, Telkomsel (Indonesia), Maxis
(Malaysia), Smart (Philippines);
• Family Zone technology is now being
pre-loaded in Android smart devices
across Australia & India; and
• Family Zone has won numerous awards
including StartUp of the Year and Top
Tim Levy, Managing Director
38 MicroCap Review Magazine
asx: FZo / pinK: FMZnF
Rapidly growing, global
cyber safety provider!
Businesses of Tomorrow.
WhY is cYBEr saFETY
sUch an ExciTinG
opporTUniTY?
The average age a child views their
first pornographic video is 81.
Suicide is now the second leading
cause of death among teenagers2.
The majority of children today
have been exposed to inappro-
priate material and cyber threats
and bullying. These are the clear
impacts of uncontrolled or mod-
erated access to technology and
the internet.
Parents, schools and the media
are now starting to take notice and
whilst fast growing, the current
cyber safety industry is estimated
to be merely US$1.5Bn/a 3.
Unsatisfied demand however is
estimated at potentially US$70Bn!4
FaMiLY ZonE’s UniQUE,
proVEn and ExciTinG
sTraTEGY To oWn ThE
spacE
Family Zone’s ecosystem approach
is innovative, disruptive and gaining signifi-
cant traction across the globe.
Features to support the needs of parents
with comprehensive yet simple parental con-
trols to filter content, manage screen time
and access to apps; and more
A world first integrated technology sup-
1 https://lutheranyouthroom.org/talking-kids-
pornography-parent-resource/
2 https://www.cdc.gov/nchs/fastats/adolescent-
health.htm
3 https://www.absolutemarketsinsights.com/news/
Global-Parental-Control-Software-Market
4 https://www.parksassociates.com/blog/article/
mid-year-2014-update-on-the-parental-controls-
software-market - based on Park’s estimates of 2%
penetration today.
porting filtering across all devices
children use plus home, enterprise
and telecom networks;
A world first common platform
for schools & parents; supporting
school duty of care, school digital
citizenship programs and parent-
ing needs;
A world first platform for tele-
coms providers to re-sell and embed
Family Zone’s comprehensive suite
of services into their offerings;
A world first platform for hard-
ware manufacturers to join the
ecosystem by pre-loading Family
Zone technology on cell phones,
tablets, Chromebooks, computers
and networking equipment.
WhY FaMiLY ZonE?
Management team: An impec-
cable executive and management
team including former senior
executives from Blackberry, SAP,
major telecoms providers, retail-
ers and technology vendors.
Market opportunity: A vast and
poorly addressed global market-
place. Cyber safety as in industry
is growing fast, and is a topic of
increasing importance and interest to the
community, media and governments.
Product: A unique, patented and now
proven universal approach to cyber safe-
ty. Family Zone’s ecosystem offers the only
workable solution to the challenges parents
and schools face in the digital age.
Strategy: A demonstrably successful busi-
ness strategy sees Family Zone the leading
provider in Australia & New Zealand and the
go-to provider for Asian telecos. n
For more information, please visit:
www.familyzone.com
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
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MicroCap Review Magazine 39
 LEGAL CORNER
Don’t Blame it on Reg A
L ately, it seems like every article that I read about Regulation A is negative.
Most of these articles point to the trading price of the dozen or so Reg A
offerings that successfully listed on Nasdaq or the NYSE.
Yes, it is true, if you look at these offerings
and compare their IPO offering price to
their current market price, things look a
bit gloomy. Reg A poster children, Myomo,
Adomani, Chicken Soup for the Soul and
Level Brands are all currently trading below
their IPO prices. Even LongFin Corp.
(OTC: LFIN), a FinTech company powered
by Artificial Intelligence (AI) and Machine
Learning, that delivers foreign exchange and
finance solutions to importers, exporters and
small to medium sized enterprises, whose
stock jumped from an IPO price of $5 a
share to over $14 a share is now down below
its IPO price and delisted from Nasdaq due
to a regulatory cloud that has developed
regarding alleged insider trading and the
unregistered sale of securities.
As a result of the poor performance of
some of the Regulation A offerings, cli-
n BY LOUIS A. BEVILACQUA, ESQ.
40 MicroCap Review Magazine
ents have begun asking whether they should
engage in a traditional IPO using an S-1
registration statement instead of using the
Reg A offering process. But, Regulation A
really has nothing to do with it. The offer-
ing method – best efforts Reg A or firm
commitment S-1 offering – has nothing to
do with how a particular stock will perform
in post-IPO trading. The Reg A stocks that
are performing poorly in post-IPO trading
would be performing just as badly if they
did a firm commitment underwritten offer-
ing using a Form S-1 registration statement.
The problem is not the offering methodol-
ogy. Instead, the problem is valuation. It
seems that many issuers and perhaps even
their underwriters are under the impression
that since investors in a Reg A offering will
mostly be comprised of non-accredited retail
investors, they can “get away” with a higher
www.stocknewsnow.com
www.stocknewsnow.com MicroCap Review Magazine 41
valuation. These companies successfully
raise capital at higher valuations, but then
the stock price plummets post-IPO as more
sophisticated institutional investors short
the stock or investors in the original offer-
ing seek some liquidity in a narrowly traded
stock.
According to Gordon McBean, the Chief
Executive Officer of Cambria Capital, an
investment bank that offers issuers wide
retail distribution for their Reg A offerings,
“We are huge believers in Regulation A+
and its ability to get growth capital into the
hands of entrepreneurs in an efficient man-
ner. It is unfortunate that many of the Reg
A+ IPOs have performed so poorly (even
though we feel that many of them are great
businesses) but we feel it is fairly obvious
why this has happened and the fix is quite
straightforward. Issuers and their respective
underwriters have to find that right balance
in valuing the business to where it is a fair
deal for the issuer and a good deal for the
investor. Unfortunately the majority of the
Reg A+ deals were priced more than fairly
for the issuer and left the investor with little
chance of seeing the share price rise on a sus-
tained basis. The “crowd” has been viewed
as an investor audience that is less sensitive
to valuation and deals were priced accord-
ingly. The problem starts when professional
investors see a valuation on a stock that is
significantly higher than its public peers
and the stock quickly trades to a level at or
below its peers.” Mr. McBean added “The
issuer may have obtained valuation that it
was happy with but now two significant
problems emerge: First, you now have a dis-
gruntled shareholder base (and remember
many of these deals were bought by custom-
ers of the issuer), and second, your ability
to raise additional capital has been severely
hindered by the fact that you are now an
orphaned microcap with tired shareholders.”
According to Mr. McBean, “In working
with issuers Cambria Capital hammers on
a very important point – the IPO is likely
to be the smallest capital raise that the com-
pany will undertake through the rest of its
42 MicroCap Review Magazine
life. With that in mind make sure that you
price the deal to where the crowd has a real
shot at seeing the value of its shares rise.
Proper valuation always has been the way
to attract investment in an IPO, it shouldn’t
change just because it is the crowd getting
involved and not professional investors. An
offshoot of this strategy is that professional
investors will likely become more interested
in the offering. We have seen a lot of larger
investment funds taking interest in micro-
caps recently and there is no reason that
they should avoid Reg A+ deals when valued
appropriately.” Mr. McBean concluded by
saying that “at Cambria we are excited about
what the future holds for Regulation A+ and
we are positioning ourselves to be part of it.”
Companies should not shy away from
Regulation A, especially if they plan to trade
OTC before uplisting to a national securities
exchange. Reg A is significantly more flex-
ible and streamlined than the traditional S-1
process. Under a traditional IPO process,
companies cannot do any marketing before
the registration statement is filed (other than
limited marketing to institutional accredited
investors) and if the company is not listed on
a national securities exchange like Nasdaq
or NYSE at the closing of the offering, then
it must not only satisfy the SEC’s comments
but also those of state regulators in the
states where it sells securities. Regulation A
eliminates this issue by allowing companies
to generally solicit and advertise their offer-
ing (known as testing the waters) before the
offering statement is filed. State blue sky
regulations are also preempted in the case of
a Tier II Regulation A offering, thus elimi-
nating regulatory reviews at the state level.
Finally, the requirements of Form 1-A com-
pared to S-1 are less involved and the Staff
of the SEC is making a real effort to reduce
the review period for Reg A offerings, which
seem to take at least a month less than when
Form S-1 is used.
Companies considering an IPO should
not dismiss Reg A. It is a more flexible and
streamlined approach that will save them
time and money. Instead, these companies
should spend more time getting valuation
right and taking steps to support the stock
price post-IPO through transparent report-
ing and investor relations activities. Reg A is
not the reason deals fail. It is a great new tool
that can result in the return of the mini-IPO
so long as new Reg A issuers learn from the
mistakes of their predecessors.
Investors should also take notice of Reg A
offerings. Although the Reg A issuers may
be earlier stage than those that raise capital
in a traditional IPO, Reg A also offers unique
opportunities to invest in businesses that
would not otherwise be able to access the
capital markets. However, investors in Reg
A offerings must do their homework, espe-
cially when it comes to valuation. As more
companies use Regulation A to IPO over
time, the initial problems with Regulation A
will work themselves out and the quality of
the Reg A deals will improve. So, investors
should keep Reg A offerings on their radar
and not miss potential opportunities just
because a company is using Reg A instead of
the traditional IPO process. n
Mr. Bevilacqua is the founding member of Bevilacqua
PLLC (www.bevilacquapllc.com), a boutique transac-
tional corporate and securities law firm. Mr. Bevilacqua
counsels companies of every size ranging from entre-
preneurs with just an idea to established companies
whose securities trade on the NYSE or NASDAQ. He
has broad experience representing issuers in public
offerings and private placements of securities (including
private placements under Rule 506(c) of the Securities
Act, crowdfunding offerings under Title III of the
JOBS Act, and Regulation A+ offerings), Exchange Act
compliance, angel and venture capital financings, other
areas of equity and debt financing and mergers and
acquisitions.
www.stocknewsnow.com
 P R O F I L E D C O M PA N Y asx: nEW

new Energy solar Ltd.

T
he global shift towards renew-
able energy is underway, and New
Energy Solar (NES) stands at the
forefront of this exciting transition. NES
was established in 2015 with the purpose of
identifying investment opportunities in this
rapidly growing sector to build a thriving
portfolio of large-scale solar power plants
that generate emissions-free power. Now
an award-winning, ASX-listed solar infra-
structure business, NES has already invested
more than $1 billion1 in solar power plants
across the United States and Australia, and
in doing so, has helped clients access invest-
ment opportunities otherwise unavailable
to them, as well as achieve positive social
impact and long-term, risk-adjusted returns.
The NES management team has a strong
investment and asset management focus,
harnessing their many decades of combined
experience in high-level positions across
the power, utilities and infrastructure sec-
tors to identify, acquire and operate solar
assets with attractive risk-adjusted returns.
The team’s disciplined approach to acquiring
high-quality, low-risk assets has led NES to
become one of the top five listed renewable
investors in solar PV plants in the world.2
“NES is focused on generating consistent
financial returns for our investors alongside ty.3 However, once all 22 plants are opera- the state of New South Wales.5
positive social impact in the renewable ener- tional, the portfolio will have an anticipated Looking ahead, the team will focus not
gy sector,” says CEO John Martin. “Behind combined capacity of 840 megawattDC, which only on ensuring its remaining plants under
this mission is our dedicated team, whose can generate more than 1.7 million MWh of construction progress smoothly to commer-
knowledge, industry expertise and collab- electricity and displace an estimated 1.15 cial operations, but also identifying further
orative efforts have driven the business’s million tonnes of CO2 – the equivalent to opportunities for growth. Following rapid
success to date.” removing 282,000 cars from the road.4 And progression in this sector and with renewable
In 2018 alone, NES’ seven operating once all plants are commissioned through energy fast becoming the lowest cost source
plants are anticipated to generate more than 2019, the portfolio will generate enough of unsubsidised electricity, the team antici-
700,000 megawatt hours (MWh) of electrici- energy to simultaneously power every pates a strong pipeline of future investment
household in Newcastle and Wollongong in opportunities and a bright future for solar. n

3 NEW Expands its Australian portfolio with For more information, please visit:
acquisition of Beryl Solar Power Plant – 23 July
1 Quarterly update – June 2018 2018
www.newenergysolar.com
2 Ibid 4 Ibid 5 Quarterly update – June 2018

www.stocknewsnow.com MicroCap Review Magazine 43

 F E AT U R E D A RT ICL E
What is a SPAC?
S PACs represented nearly 20% of the US IPO market
in 2017.
So what is a SPAC? A SPAC is an acro-
nym for a Special Purpose Acquisition
Corporation or what is more easily under-
stood to be a single purpose, publicly-held,
private equity-like vehicle. A sponsor of a
SPAC is typically either a private equity fund
(or individual professional), venture firm or
former CEO of an S&P 500 company, who
are required to put up and are “at risk” of
losing nearly 5% of the amount raised in the
SPAC IPO if they fail to identify and close
on an acquisition within a finite amount of
time, typically 18-24 months. Through the
SPAC IPO, the public co-invests with the
sponsors with the expectation that the spon-
sors will identify and close on the acquisition
of a private company that is interesting in
being publicly-listed. The public’s capital
remains in a trust account for the benefit of
the public, until the closing of the proposed
acquisition, and is subject to an automatic
right of redemption. The public has the
opportunity to approve of the acquisition
candidate or require a full return of their
capital at the closing. The overall market
impact is even more significant since the
size and type of acquisition candidates tends
to be significantly greater than the amount
n BY DOUG ELLENOFF, ESQ.
44 MicroCap Review Magazine
raised in the IPO. Simply, the SPAC pro-
gram is increasing the number of investible
companies that are publicly-traded.
In 2017, there were a total of 34 SPAC
IPOs, which raised slightly more than $10
billion dollars. In the first half of 2018, there
have been 17 SPACs, which have raised $4.5
billion dollars. According to SPACanalytics,
there have been a total of 300 US SPAC
IPOs since 2003; 159 of which have closed
their business combinations, 9 more have
announced deals, 51 are continuing their
search $13 billion) and 81 have liquidated
and given back their money.
In the last 7 years though, the number of
SPACs that have liquidated has been very
few and the percentage that have closed on
successful business combinations is quite
high. A meaningful percentage of the 81
liquidations happened between 2003 and
2011/12. Since that period of time, working
with the bankers, other lawyers, accountants
and investors in the SPAC industry, we col-
lectively recognized that the dilutive impact
of the earlier generation of SPACs was dis-
couraging potential target’s from pursuing
a sale to a SPAC, and thereby, unnecessar-
ily forcing the liquidation of those SPACs.
To reduce the impact of the dilution, we
repriced the warrants issued as part of the
IPO to investors to be above market and also
subjected them to price appreciation. Over
the years, the regulatory tension that existed
back prior to 2010 has also dissipated (old
news) and both the IPO and proxy process
are now normal and timely processes--- the
SEC, FINRA and Exchanges treat SPACs as
just any other public companies.
With respect to current themes in the
SPAC industry, the vast majority of issuances
are done by PE funds and serial SPAC spon-
sors. The most prevalent theme has been
Oil and Gas, although there are numerous
general industrial and technology acquisi-
tions as well. The average SPAC IPO is in
excess of $250 million dollars.
For some of your readers you may be ask-
ing yourselves “wow, SPACs are back”- “I
didn’t realize”, so I appreciate your taking the
time to read this article and learning about
how the industry has evolved. n
Douglas S. Ellenoff, a member of Ellenoff Grossman
& Schole LLP since its founding in 1992, is a corpo-
rate and securities attorney with a focus in business
transactions, mergers and acquisitions and corporate
financings. In the last several years, he has been
involved at various stages in numerous registered
public offerings and hundreds of private placements
into public companies. Along with other members of
his Firm, Mr. Ellenoff has been involved at various
stages with over 100 registered blind pool offerings
(commonly referred to as “SPACs”); In addition to
our IPO experience with SPACs, he has been involved
with more than 30 SPAC M&A assignments. The
Firm represents nearly 60 public companies with
respect to their ongoing 34 Act reporting responsibil-
ities and general corporate matters. He also provides
counsel with regard to their respective ongoing (SEC,
AMEX and NASD) regulatory compliance.
Like the other innovative securities programs,
the Firm has taken a leadership role in the emerging
crowdfunding industry, which was signed into law by
President Obama on April 5, 2012. The Firm actively
participates in many discussions with the SEC and
FINRA with respect to the proposed rules which
went into effect May 16, 2016.  The Firm has spon-
sored conferences, webinars and has been invited to
speak at numerous events on the topic. The Firm is
already actively engaged with clients (funding por-
tals, broker-dealers, technology solution providers,
software developers, investors and entrepreneurs).
www.egsllp.com
www.stocknewsnow.com
Trusted Solutions
The SPAC Leader in Every Way!

Continental has been the Trustee and Transfer Agent for more SPACs
than all other agents combined by far!
• Over 200 SPAC IPOs – more than a 90% market share since 2003
• Agent for the largest SPACs – 3 SPACs which each raised over $1 billion
• More than $25 billion of SPAC assets managed as trustee
• Unique, unmatched proprietary platform for successfully handling all aspects of even
the most complex business combination, including special meetings, tender offers and
the entire redemption process
• Continental permits the issuer to select its asset manager and we have pre-existing
account relationships set up with every major asset management firm in the United
States and overseas as well

Continental has Been Dominant in the SPAC Market for A Reason:

We offer best-in-class, tailored solutions, unique legal and processing expertise next to none,
and a dedicated team of professionals who are available 24/7 when you need them most!
The SPAC conference offers an unmatched forum for discussion and analysis of recent deal
activity and the ever-changing models of the SPAC product which is now a major player in the
overall IPO market.

PLEASE VISIT OUR BOOTH AND PARTICIPATE IN OUR PANEL DISCUSSION!

CONTINENTAL – OUR NAME SAYS TRUST.

Contact Karri Van Dell 212.845.3224

Continental Stock Transfer & Trust | ContinentalStock.com | 1 State Street Plaza, 30th Floor | New York, NY 10004
 P R O F I L E D C O M PA N Y
GoviEx Uranium inc.
G
oviEx Uranium Inc. (TSX-V: GXU;
OTCQB: GVXXF) is a mineral
resource company focused on the
exploration and development of its uranium
properties in Africa. GoviEx has two fully-
permitted uranium projects: the Madaouela
Project in Niger, and the Mutanga Project in
Zambia. With the uranium market currently
on the uptick, GoviEx is positioned to tran-
sition from exploration and development to
production, subject to a uranium price that
supports the development of new mines.
2018 represents a change in fortunes for
the uranium market. Demand continues
to grow; the World Nuclear Association’s
Daniel Major, CEO
46 MicroCap Review Magazine
Tsx-V: GxU / oTcQB: GVxxF
recent report highlighted the increase in
global nuclear electricity output to 2506 ter-
awatt hours (TWh), an increase of 29 TWh
compared to 2016, and 160 TWh higher
than in 2012. At the end of 2017, the global
nuclear capacity encompassed 448 operable
reactors, with 59 reactors under construc-
tion. Both 2015 and 2016 showed additional
nuclear power plant grid connections, with
ten each, and there have already been more
grid connections in 2018 than in the whole
of 2017.
The supply side has reacted aggressively
to sustained lower uranium spot prices, with
additional cutbacks to Kazakh production
and the placement of Paladin Energy’s Langer
Heinrich mine on care and maintenance. The
biggest supply-side development has been Cameco, Ivanhoe Industries, and Denison
Cameco’s decision to indefinitely suspend Mines are GoviEx’s key, strategic sharehold-
operations at its McArthur River operation ers, and their continued commitment pro-
in Canada. This move not only eliminates vides GoviEx with a solid foundation.
a significant amount of forward production GoviEx is following a multi-pronged strat-
from the market (16 to 21 million pounds egy that includes the further optimization
(Mlb) U3O8 annually), but will also compel of the Madaouela project in Niger. GoviEx
Cameco to purchase additional inventory has quotations from a number of consultan-
to meet forward sales commitments, thus cy companies for the final feasibility study.
further reducing supplies. As soon as that costing is secured, GoviEx
According to Ux Consulting, 2018 ura- will announce who will finish the study on
nium production is forecast to total 136 Mlb, Madaouela. GoviEx also has been working
and secondary supplies are estimated at 48 on the debt financing for the Madaouela
Mlb. Demand is estimated at 191 Mlb, thus project with a number of banks that have
projecting a deficit of 7 Mlb. Together, these provided expressions of interest
factors are creating optimism in the uranium GoviEx will continue to advance these
market, and GoviEx Uranium is poised to and other progressive strategies, and, as the
take advantage of what comes next. uranium market improves, the company
GoviEx’s board of directors includes CEOs intends to accelerate project improvement
of major listed companies, representing both and development accordingly. Changes are
mining in general and the uranium sector in ahead, and GoviEx offers a gateway into what
particular. These directors have the required is likely to be an exciting time in the uranium
skills in capital markets, legal, debt, and proj- industry. n
ect development, and the experience working
For more information, please visit:
in Africa to help advance the Madaouela and
www.goviex.com
Mutanga uranium projects to production.
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
 P R O F I L E D C O M PA N Y
srax
Providing the tools to unlock the value of data
across marketing channels.
S
RAX is at the forefront of a new
digital era where the commercial web
is powered not by machines – but
by consumers. The recent events between
Facebook and Cambridge Analytica, and
new regulations like the European Nation’s
General Data Protection Regulation (GDPR)
and California Consumer Privacy Act
(CCPA) have finally shed light on the value
of data and people are taking notice.
Founded in 2010, SRAX’s machine-
learning technology has enabled brands and
content owners to reach and reveal their
core consumers across marketing channels.
Capitalizing on its considerable track record
and experience, SRAX is launching a new
blockchain solution that supports the newly-
empowered users of the web: consumers.
SRAX’s blockchain identification graph,
BIG platform, found online at www.bigto-
ken.com, is revolutionizing advertising by
offering consumers choice, transparency and
compensation for their data. The company’s
vision for BIG is to create an equitable rela-
tionship between corporations and consum-
ers to fundamentally restructure the digital
advertising and data ecosystem.
Chris Miglino, CEO
www.stocknewsnow.com
nasdaQ cM: srax
SRAX has built a platform that serves all
sides of the digital advertising ecosystem.
SRAX CEO and Co-founder Christopher
Miglino believes 2018 will continue to be a
year of tremendous strategic change as the
company grows and monetizes its verticals
as well as launches its new blockchain con-
sumer data management system, BIG.
BETa TEsTinG nEW
BLocKchain soLUTion
In the fourth quarter of 2017, SRAX unveiled
its blockchain initiative, BIG, which enables
consumers to own, verify, and sell their data
while staying connected to their commu-
nity. Through BIG, consumers earn rewards
when they create or add data to the system,
opt into sharing their data, and when that
data is purchased. Consumers also control
what pieces of data are for sale and who can
buy them. For advertisers and data buy-
ers, BIG unlocks valuable consumer-verified
and informed-opt in data for targeting and
enhanced campaign performance. BIG also
supports third-party application integrations
to help marketers learn more about their cus-
tomers and earn revenue through data sales.
SRAX released the BIG Alpha version in
spring to test functionality, reward mecha-
nisms, and blockchain mechanics. This sum-
mer, the company entered the Beta testing
phase for BIG, which includes new game-
like features, social-oriented elements, and
a contest to incentivize participation and
consistent engagement.
SRAX’s new product takes advantage of
the data and digital advertising market to
return people to the core mission of the web.
“The BIG platform solves challenges for both
consumers and businesses. Most important-
ly, the ability for consumers to verify their
MicroCap Review Magazine 47
existing data and create new data through
BIG, represents a significant milestone in
enabling consumers to own and manage
their data,” said SRAX COO and Principal of
BIG, Kristoffer Nelson.
sTrEnGThEninG a MULTi-
VErTicaL sTraTEGY
Over the past several years, SRAX’s multi-
vertical approach has proven successful in
more ways than one. In August 2018, SRAX
announced the sale of its healthcare and
pharmaceutical business, SRAXmd, to pri-
vate equity firm, Halyard Capital, for up to
$52.5 million. Management believes SRAX’s
other verticals including consumer pack-
aged goods, sports, auto and lifestyle, can
each achieve similar or greater valuations as
SRAXmd. SRAX plans to invest the SRAXmd
proceeds in the further development of these
verticals as well as the BIG platform.
While the company monetizes one busi-
ness, it continues to take great leaps with its
other businesses, strengthening the multi-
50 MicroCap Review Magazine
vertical strategy that’s proven successful time
again. Launched this year, SRAX’s CPG ver-
tical, SRAXshopper, targets shoppers vis-
iting advertisers’ key retailers by layering
social and shopping data with media buying
to enable marketers to message a single,
verified shopper across multiple devices and
inventory sources. Recently, SRAXshopper
introduced a new video ad unit that creates
real-time responsive product videos, target-
ing shoppers through local and personalized
data. Product page messages coupled with
the right combination of sight, sound, and
motion from our unique Natural Language
Processing platform is used to generate a
one-of-a-kind ad experience for shoppers.
In addition, SRAX Social, a social media
management tool that makes it easy for
agencies, businesses and individuals to grow
their digital presence, also released new
features, specifically to its boosted Facebook
post tool. This tool, which enables market-
ers to promote posts beyond their Facebook
Page communities, has added an Intelligent
Budget and an Auto Boost feature. Intelligent
Budget allows users to load funds and eas-
ily allocate budgets to multiple teams, while
Auto Boost allows users to automatically
promote all Facebook posts based on rules
and parameters set by the user. After reach-
ing a specific metric(s) in a Facebook post,
such as 25 likes, the rule triggers a launch of
a boosted campaign for that post. Users can
also A/B test different audiences and rules
to maximize performance and guide future
campaigns.
2019 is set to be an exciting year for SRAX,
as it continues to grow its verticals and
launch its blockchain identification graph,
BIG. In addition to being named a 2017
Deloitte Fast 500 winner, SRAX was added to
the Russell Microcap® Index, which remains
in place for one year and means automatic
inclusion in the appropriate growth and
value style indexes. n
For more information, please visit:
www.srax.com
The company paid consideration to SNN or its affiliates for this article.
www.stocknewsnow.com
 P R O F I L E D C O M PA N Y
senetas corporation Ltd.
S enetas Corporation Limited (Senetas) is a
leading developer of data encryption solu-
tions; from certified high-assurance encryption
hardware and virtualised encryption for carrier
Ethernet Metro and Wide Area Networks, to the
most secure encrypted file sharing and collaboration
application, providing data sovereignty control.
Senetas is an Australian public listed compa-
ny (ASX:SEN) and a global leader in the devel-
opment of advanced encryption technologies.
The Company’s CN Series hardware
encryptors, CV Series virtual encryptors and
SureDrop, secure file sharing application, share
a common high-performance encryption plat-
form and are used to protect high-speed net-
work data in more than 35 countries.
Senetas encryption solutions leverage
state-of-the-art encryption key management
and are crypto-agile by design; providing
long-term data protection in a post-quantum
computing world. They protect data without
compromising network and application per-
formance, or the user experience.
sEnETas prodUcTs
CN Series – certified high-assurance hard-
ware encryptors, ideal for core IT and net-
work infrastructure.
The CN Series features crypto-agility,
uncompromising performance and certifi-
cations by multiple independent authorities
(C.C., FIPS and NATO), providing Senetas
customers with the added confidence that
CN Series solutions are state-of-the-art and
provide maximum security and performance
essential for today’s infrastructure.
CV Series – strong encryption for large-
scale extended and virtualised WANs.
The CV Series virtual encryptor provides
up to 5Gbps performance and is transport
Layer agnostic. The CV Series enables rapid
scalability, flexibility and cost-effective data
protection, all the way to the virtual edge.
The CV Series encryptor uses the same
high-assurance Senetas CN Series hardware
encryption platform.
www.stocknewsnow.com
asx: sEn / pinK: snEsF
SureDrop – the most secure, encrypt-
ed “box”-type file sharing application with
100% data location control.
SureDrop leverages Senetas’s state-of-the-
art encryption security to provide secure file
collaboration and data sovereignty. SureDrop
provides the same Senetas crypto-agility, scal-
ability and ease of use as the network data
encryption solutions. It is also an ideal solution
for service providers’ large-scale deployment as
a “Security-As-A-Service” customer solution.
Senetas encryptors have been trusted to pro-
tect much of the world’s most sensitive infor-
mation for more than 20 years. They are used
to protect everything from government and
defence data and secrets, to intellectual proper-
ty and business data, to financial transactions,
CCTV networks, SCADA critical infrastruc-
ture control systems and citizen identities.
Senetas CN and CV Series encryptors
provide optimised encryption security for
everything from modest bandwidth require-
ments of 10Mbps to the ultra-fast 100Gbps
networks required for aggregated Big Data,
Cloud and data centre applications.
Senetas encryption solutions are used and
supported in more than 35 countries. They
are distributed and supported internation-
ally by Gemalto, the world’s largest data
security company, under its SafeNet Identity
and Data Protection products.
Senetas customers include enterprise, gov-
ernment, defence and telecommunications
and technology service providers:
Government
Senetas high-speed data encryptors are
often the first choice of governments around
the world. Why? leading near-zero latency,
multi-certified, dependable, scalable and
interoperable encryption. Security without
network performance compromise!
Healthcare
Health sector advances are driven by adop-
tion of new technologies that depend on
high-performance data networks. Because
data protection is essential – privacy, com-
pliance and data integrity – the health sector
demands security without compromise.
Financial
This banking and financial services sector
highlights the criticality of secure high-
speed transmission of banking transactions
and general business operations data around
the globe. Banks are highly dependent upon
secure high-performance data networks
without compromise
Defence
Defence and military organisations have
among the most demanding data network
security requirements and information
security classifications. Senetas protects gov-
ernment, defence force and military data in
motion in more than 25 countries.
Commercial
Commercial organisations’ adoption of
technologies such as Cloud computing and
database services, expose them to serious
data security risks. Perceptions that data
networks are inherently safe have been
proven wrong. Privacy and damages risks
demand secure data transmission. n
ManaGEMEnT
Andrew Wilson was appointed CEO of Senetas
on 15 August, 2012. He was formerly Senetas’s
Company Secretary and Chief Financial Officer.
Throughout his 14-year career with Senetas, Mr.
Wilson has had a significant role in most of the
important stages of the company’s development
since it was first listed on the ASX.
Julian Fay has been CTO of Senetas for 10 years.
Julian was a co-developer of Senetas’s hardware
encryption technology that is used in more than 35
countries and holds multiple testing authority certi-
fications for use in government and defence.
Senetas has a strong commitment to R&D and
testing authority certifications. Advanced prod-
uct development continues to identify and meet
the increasing market demand and use cases for
secure data in motion and opportunities to increase
Senetas’s addressable markets.
For more information, please visit:
www.senetas.com
MicroCap Review Magazine 51
 F EAT UR E D ARTICL E
Rick Rule: Three Themes for
Mining Investments in 2018
I
n this Wall Street View, our host caught
up with Rick Rule, President and CEO
Sprott U.S. Holdings, Inc. TSX: SII at
the Sprott Natural Resource Symposium
2018 in Vancouver, BC.
Shelly Kraft: It’s good to have you, let’s tell
our audience an overview of what you do.
Rick Rule: Sprott Inc. is a natural resources
finance house we manage about 12 billion dol-
lars in investor funds across a broad spectrum
of resource opportunities including resource
equities and of course resource lendings. In
addition to that we’re the sponsor for New York
Stock Exchange traded passive investment
trusts which assist investors in making U.S.
investors making tax-advantaged investments
in gold silver and platinum and palladium.
Shelly Kraft: Now what’s the history
behind the company?
Rick Rule: We’ve been investment man-
agers really based on Eric Sprott’s and then
more laterally my track record for 40 years
in natural resource based businesses. Well
there are many places to invest in the world
we’ve limited ourselves to the ones that we
understand, which are specifically mining
oil and gas agriculture timber and water.
n BY RICK RULE
SPROTT U.S. HOLDINGS
52 MicroCap Review Magazine
Shelly Kraft: Rick, what’s unique about
Sprott?
Rick Rule: I think first of all the fact that
we stick to our knitting, we only do one
thing we do the thing that we’ve done for 40
years. We don’t try and be all things to all
people. When you invest with Sprott or you
invest in Sprott, you’re investing in a team
of 160 investment professionals including
geologists, engineers and finance people
with a long history and resource businesses
that do just resource businesses. Many sub-
mit financial services firms flit sort of from
what is popular to what is popular to what
is popular. Never developing any expertise
in anything other than marketing. In Sprott
through good times and bad we’ve been the
resource business.
Shelly Kraft: Sprott’s name is on the door
of this conference, so what are you speak-
ing about to the audience?
Rick Rule: I speak about a variety of
investment topics. Here at this conference
with natural resource loyalists; I don’t have
to be a generalist. So, here specifically I’ve
been talking about the the three themes in
mining investment which I think are attrac-
tive. The first is merger and acquisition tar-
gets. We’re coming into a phase where min-
ing companies are going to have to acquire
other mining companies because they have
under invested in their development pipe-
lines. We see that as being fairly easy money
for the next 18 to 24 months. The second
are the royalty and streaming companies
which despite the fact that they have valu-
ations which are larger than the sector at
whole, still, we think have a more attractive
outlook, and present what is in a very risky
sector lower risk opportunities to participate.
The third is that we’re moving back into
an exploration market. We haven’t had an
exploration market for 20 years and man-
kind as a whole has under invested in explo-
ration. Remember Shelly, despite the fact
that other sectors are more popular than
natural resource sectors, everything in the
world is grown or mined. If it wasn’t grown
or it doesn’t - wasn’t mine, it doesn’t exist.
And the truth is the stuff of mankind, the
thing that makes, things that make your life
good and my life good are all mined. And we
haven’t been looking for them for 20 years.
Shelly Kraft: So, what do you tell the com-
mon investor the ordinary investor person
- what do you do in this sector today?
Rick Rule: Ours is a cyclical capital-intensive
business. So in our business if you’re not a con-
trarian you’re going to be a victim. You have
to buy the business, this business, these busi-
nesses, when they’re out of favor, and right now
they’re in fact out of favor. This is a fairly good
entry time for people who want to be in natural
resource based businesses. All the hot money is
in crypto and marijuana and various technology
applications that I personally can’t pronounce
or spell. So, if you are going to be in basic busi-
nesses you want to be in basic businesses when
they’re out of favor and this is such a time.
Shelly Kraft: The mantra when I was on the
street was buy low sell high, how do you go
wrong you can’t lose money doing that. So, for
people who are not and who have no knowl-
edge or basic knowledge of the mining and
resource business, what would you say to them
to get them started in the business today?
www.stocknewsnow.com
 Rick Rule: Well, it’s a great mantra; cer-
tainly you can’t buy low in a sector that’s
popular. So, if you want to buy low, you have
to look across the spectrum of financial press
and see something that never makes head-
lines. Technology is making the headlines,
Real estate is making the headlines, Cannabis
is making the headlines, Blockchain is mak-
ing the headlines; whatever is popular is
expensive, whatever is unpopular is inex-
pensive and you never see headlines on The
Wall Street Journal or Forbes about natural
resource-based businesses. Ergo relative to
other sectors they’re cheap.
Shelly Kraft: So, we haven’t mentioned the
price of gold in this entire interview, but I
think it would be remiss if we didn’t, tell
me about it, what do you think?
Rick Rule: Gold is a unique natural resource
asset in the sense that it’s not part of the neces-
sary stuff of mankind except for its transac-
tional capabilities. I personally own a lot of
gold and I own it for insurance purposes. It is
at once a medium of exchange and a store of
value. Now ironically it’s the only asset class
that I own a lot of that I hope doesn’t go up in
price, if you look at gold not as an investment
but rather as an insurance policy, shall I think
about an insurance policy that you want to get
paid off on - Auto insurance means you had a
wreck, life insurance means somebody died.
So, well, I encourage every investor to
have a holding in physical gold, I would also
encourage them ironically to have that as the
one asset that they own that they don’t want
to see rapid price appreciation in. Having
said that ,I think we are going to see price
appreciation in gold. Gold moves broadly,
inversely with faith in the U.S. dollar. My
own belief is that the current U.S. dollar
strength is more a function of the weakness
of competing currencies than it is the under-
lying strength in the U.S. economy. When I
look at the price of the dollar, relative to the
encumbrances the debt carried by American
Society at the federal level, the state level,
www.stocknewsnow.com
the local level, the pension level, the con-
sumer level, my suspicion is that either we
see a default cycle in the United States or we
default the old-fashioned way by inflating
away the net present value, value of the obli-
gation. Hence, I feel good about gold.
Shelly Kraft: Now, let’s take that feeling
about gold and let’s specifically talk again
about these juniors and exploration and
expansion outside of Canada and all over
the world and you know I’m hearing some
very interesting stories and I want your
comments on that.
Rick Rule: Well, understand that natural
resource conferences you’re always going to
hear bullish things about natural resources.
So, take half what you say and throw it out
the window, okay.
Shelly Kraft: You mean half what I hear?
Rick Rule: Half what you hear, yeah.
Shelly Kraft: I’ll take the other half of what
I say; you throw that out of the window also.
Rick Rule: Take half what you hear the
resource conference and throw it out the win-
dow like you would experience in any other
industry conference. But the truth is that
mankind has under invested in exploration for
the last 20 years. And the consequence of that
is that that dog is going to come bite us. The
exploration sector as a whole is one where the
expectation in every individual decision is fail-
ure. What’s lovely, however, is that the games
that you experience on your successful efforts
can often be sufficient to more than offset your
losses in unsuccessful efforts.
Once you learn how, once you learn that
value is associated with a fairly small group
of people, there are three thousand public
exploration companies worldwide and all of
the real performance is generated by about
two hundred of three thousand. Once you
begin to learn to separate the wheat from the
chaff, when you come into periods like the
one we’re coming into when you come into an
exploration bull market they last four or five
years and the upside that individual selective
investments can make is mind-boggling.
Shelly Kraft: You know, I just want to
finish off with your take on M&A and my
view of consolidation in the industry. So,
I think that they’re part and parcel to one
another, aren’t they?
Rick Rule: Absolutely. The last bull market
that we had in resources last decade the industry
made some absolutely idiotic acquisition deci-
sions. There were two consequences of that:
one of the appreciation for the whole industry
was diminished and there was a dearth of M&A
activity. But M&A needs to happen and as a con-
sequence of that it’s beginning to happen again.
Mercifully, the bad decisions of the last decades
still weigh on the minds of investors and manag-
ers. And so the acquisitions that you’re seeing
take place right now are uniformly good acquisi-
tions and acquisitions are always good.
Bigger companies have lower general and
administrative expense relative to AUM that’s a
good thing you spend less money running the
business more money on the business. And
secondly, if you are a participant in a merger,
an intelligently constructed merger, benefits
the seller because of the immediate premium
and it benefits the buyer too. We’re coming
into a circumstance that’s going to last I think
for eighteen months to two years where both
the buyers and the sellers are materially ben-
efited by M&A. So, I think you’re exactly right
in your description of mergers and acquisitions
being an intelligent way to play the game for
the next 18 to 24 months. n
For more information about Rick Rule and Sprott
U.S. Holdings, please visit: www.sprottglobal.com
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 53
 F E AT U R E D A RT I C L E
Identifying Promising Opportunities
in MicroCap Investments
I nvesting in Microcap companies has many similarities to investing
in larger companies – though certain unique risk factors more appli-
cable to Microcaps require savvy investors to supplement their normal
investment process.
Some of these considerations more appli-
cable to smaller companies include the fol-
lowing:
• They are underfollowed and less reg-
ulated
• Tend to have weaker reporting sys-
tems and controls
• Have fewer resources in time and
money than larger companies
At Ridgewood Investments, we have been
investing in Microcap opportunities for
many years and through our experience
n BY SAM NAMIRI
have come to develop our own five point
investment process to help us focus on the
most promising opportunities:
1. Focus on quality companies
54 MicroCap Review Magazine
2. Perform extensive due diligence
3. Pay the right price
4. Monitoring results
5. Implement A Sell Discipline in
advance
Focusing on quality companies is an
important initial step in MicroCap invest-
ing because in smaller and lower quality
companies, the business model sometimes
just doesn’t work and a checklist helps you
eliminate these investment traps ab initio.
For example, customers may not want to buy
the company’s product or perhaps the prod-
uct is one for which they can easily switch
to a competitor or a new entrant into the
market. Owning “quality” companies helps
www.stocknewsnow.com
lower these risks. At Ridgewood we use a
checklist of over 20 items to help us measure
if a potential microcap investment candidate
passes this initial quality test. These check-
list items range from financial ratios to quali-
tative aspects of the business such as barriers
to entry and competitive analysis. (email
us to get a copy of our checklist – note that
the idea of having a checklist is inspired, in
part, by Atul Gawande’s book the Checklist
Manifesto which we highly recommend)
Once a company passes the quality test,
the next step is to perform intensive and
thorough due diligence. We start off by
comprehensively reading the company’s SEC
Filings (including footnotes!), conference
calls and press releases. This is the time to be
looking for buried red-flags and hidden pit-
falls. For example, is the amount of options
and/or warrants a company has issued rea-
sonable and reflect positively on manage-
ment’s capital allocation abilities? We once
identified a clean coal technology company
that had a great product and seemed to
have investment promise, but upon closer
examination we noticed this company had a
habit of regularly diluting the current share-
holders by issuing an egregious amount of
options and warrants. In this step we also
scrutinize the totality of the company and
management’s history of past decisions and
communications to see if they have a strong
track record of capital allocation and strate-
gic decisions or the opposite.
After the above initial stage of diligence, if
the company still looks interesting, we start
to have more extensive conversations with
management, competitors, customers, sup-
pliers and anyone else that can help verify
and give more insight on the business and
industry. We often travel to visit the com-
pany as well as attend trade shows and read
industry publications if applicable. Not
many microcap investors do this much due
diligence on their investments, and even
fewer sell-side analysts that cover smaller
companies do so – partly because they don’t
typically have the budget to travel and invest
in such deep diligence. As investors willing
www.stocknewsnow.com
to go the extra mile, this step is one where
we can develop “an edge” on the upside while
also reducing the risk of investing in a poorly
run or even fraudulent company on the
downside. In the last three years, I’ve avoid-
ed two potential investments that ended up
being frauds later – in both of these cases the
companies refused my request to let me visit
their operations.
Another key to reducing risk when invest-
ing in very small companies is maintaining
valuation discipline. The cheaper that one
can purchase a company’s shares, compared
to what its intrinsic value is, the less risk is
being taken. In other words, purchasing a
dollar for 50 cents is less risky than purchas-
ing a dollar for 90 cents or even worse 150
cents. Rather than having a trader’s mental-
ity we focus on cultivating a business owner’s
mentality. Once we identify a good company
that we want to own, even if we own some
shares already, we get excited not dejected,
if the price of a company’s stock goes down
and creates more compelling value for us to
take advantage of.
Although it can be psychologically tough
to buy more of a stock as it is dropping,
by doing extensive primary research and
developing strong conviction on the value of
a company, it makes it easier to pull the trig-
ger. Remember that there can be many rea-
sons why someone wants, needs or is forced
to sell a stock, however only one reason why
someone would buy, which is that they think
that it is worth more.
After buying, we continue to monitor
and perform ongoing periodic due diligence
updates on the business and the industry.
This update process is continuous and lasts
as long as the stock is in the portfolio. We
continue to read all the news, press releases,
SEC filings as well as have meetings with the
companies, competitors, suppliers, custom-
ers and so forth.
Finally, always make sure to maintain and
update price targets for each investment
upfront (though targets can be updated in
light of information). Once the company has
hit its fair value, be happy selling the posi-
tion. Also, if things change and the target
price falls to where the prospective return is
no longer attractive, look at selling the posi-
tion as well. It’s important to consistently
revisit and re-check the original investment
thesis to see if it still holds. This process
has helped us reduce the risk of investing in
microcaps. While no one can be right one
hundred percent of the time (only liars),
the hope is to have a good batting average
for which one of the keys is to be selective
based on a sound investment process and
not swing at most pitches.
Sam Namiri is a Portfolio Manager and
Analyst at Ridgewood Investments, where he
concentrates on managing the Ridgewood
Select Value Fund, our fund focused on
investing in small and micro-cap compa-
nies. Ridgewood focuses on implementing
intelligent value-oriented investing strate-
gies (modeled after investors like Warren
Buffett, Ben Graham, and Phil Fisher). Prior
to Ridgewood, Mr. Namiri was an analyst at
a small cap hedge fund and the founder
of a jewelry television and manufacturing
company. Mr. Namiri has a BS in Industrial
Engineering and Operations Research from
the University of California, Berkeley and
an MBA from Columbia Business School. n
www.ridgewoodinvestments.com
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim
any liability from the use or misuse of this informa-
tion.
MicroCap Review Magazine 55
 F E AT U R E D A R T I C L E
Why Canada!
P
op Quiz! Which country has pro-
duced – on a percentage basis – more
microcap 5-baggers over the past five
years?
The United States
Canada
The answer may surprise you.
The US OTC had 113 companies whose
shares rose 5x over the past five years,
or 1.1% of the 10,584 listed companies.
Meanwhile on Canada’s Toronto Venture
Exchange (TSXV), 54 of the 1,980 listed
companies, or 2.7%, reached five-bagger sta-
tus during the same time period. That means
if the future is anything like the past, you are
n BY BRANDON MACKIE
more than twice as likely to find a 5-bagger
in Canada vs the US OTC.
That statistic is no coincidence. Once
only a mining mecca, the Toronto Venture
Exchange has transformed itself into the
world’s most efficient public venture capital
marketplace.
So if thinking about Canadian investing
conjures up an image of a slick back haired
man holding an ore deposit, we suggest you
look take a closer look. Here you’ll find a
vibrant technology and healthcare sector
that has outperformed nearly every global
market this year.
Here’s David Wolf, CEO of US-based but
Canadian-listed Hamilton Thorne: “The
[TSX] Venture [Exchange] can be a good
place for a development-stage company to
access capital, along with solid regulatory
framework and reasonable costs.”
Hamilton Thorne is a healthcare company
we have owned since 2014. Once completely
undiscovered, it has become a microcap blue
chip today. Shares have gained 820% in just
56 MicroCap Review Magazine
over 3 years.
David’s story – along with many other
Canadian microcaps we have found – have
led us to believe: if you are a US microcap
investor and not thinking about Canada, you
are crazy.
Today, we’ll share our Top 4 reasons why.
1) UndiscoVErEd
Good treasure hunters know there is no
point searching where others have looked.
The riches are gone. You’ve got to look in
undiscovered places.
The US is the world’s premier stock mar-
ket. If it wasn’t competitive enough, investors
all over the globe also want to invest there.
But in Canada, you’ll find far fewer eyeballs
on microcaps.
And even within Canada, the whole bro-
kerage industry is built around one thing: the
resource sector. These are after all the com-
panies that need to raise tens of hundreds of
millions to bring a project to life. That’s a lot
of fees for the brokers and bankers! What
incentive do firms have to research small,
profitable companies outside of this sector?
Let their neglect be your opportunity.
One of our biggest winners was XPEL
Technologies (DAP-U:TSX-V). When we
invested in 2013 at $0.17, it was growing
100% year-over-year while trading at 4 times
earnings. Shares trade over $5.00 today. It
was a gem hiding in plain sight.
2) accEss To GroWTh
coMpaniEs
Intel (INTC) went public in 1971 at a $8.2
million valuation. Imagine investing in Intel
as a microcap. A $10,000 investment in Intel’s
IPO would be worth $302 million today.
www.stocknewsnow.com
 It’s the American dream. Well, at least it
was. Now companies are staying private lon-
ger – opting for a waterfall of VC money over
the headaches of going public.
Take SnapChat. At a valuation over $30
billion, most of the upside – you could argue
– is already gone. Uber has raised capital at a
$70 billion valuation, yet is still private.
What is great for the VCs, is bad for you
as a public markets investor. Since 2000,
the average number of US smallcap IPOs
(<$100M) has fallen a staggering 74% since
the 1990’s.
Canada has fared better. The VC and pri-
vate equity industry is less mature compared
to the US. Going public is still the route of
choice for many innovative, high-growth
companies.
Catamaran Corp (CRTX), Lions Gate
Entertainment (LGF), and IMAX (IMAX)
all got their start as Canadian-listed micro-
caps. We invested years ago in a company
called Bowflex, which made home exercise
equipment. It traded at CAD $0.10 (yes,
ten cents) and after many years of growth,
moved onto the NYSE renamed as Nautilus
(NLS). Accounting for splits, shares trade at
USD $230 today.
3) Regulatory Protection &
Transparency
Despite what the media would have you
believe, Canada’s regulatory framework
offers microcap investors as much or more
protection than the US.
On the TSX Venture, you cannot do a
financing under $0.05 (except under extraor-
dinary circumstances). This means you can’t
structure a deal where 100M shares are
issued at a fraction of a penny to insiders –
only to list at $0.10 or $0.20 a few months
later.
You also can’t do financings lower than
25% of the last trade. This protects investors
from the dreaded “death-spiral” financing
where shares are issued continuously at ever
lower prices.
www.stocknewsnow.com
Lastly, the venture requires full disclosure
of ownership and share structure. There is
no hiding the faces behind each deal.
4) Built for Small
Companies
In our opinion, The TSX Venture is the
most efficient public venture exchange in the
world. This is because the entire infrastruc-
ture – from the lawyers to the accountants to
investment bankers – is built around bring-
ing small – and we mean really small – com-
panies public on the exchange.
From the fees that service providers
charge to less onerous filing requirements,
small companies have it easier when it comes
to listing in Canada relative to the United
States. US investors expect companies to be
worth billions before listing, and the whole
financial infrastructure has evolved to make
that expectation a reality.
Conclusion
Because of Canada’s thriving ecosystem of
speculative industries – think mining, cryp-
to, and cannabis – there will always be rea-
sons to be cautious of investing in Canadian-
listed securities. But investors who can look
through the noise can find innovative com-
panies like Shopify (SHOP:TSX), which has
returned 897% since its IPO in 2015 or
Covalon Technologies (COV:TSX-V) which
has returned over 4100% since 2013.
We believe Canadian investing gives
Americans the best of both worlds – you
get the valuation arbitrage of internation-
al investing without the headaches – time
zones, language barriers, and immature reg-
ulations to name a few.
Over just the past 5 years, we’ve had the
good fortune to invest in 7 companies that
increased over 10 times from our purchase
price. We believe Canada’s non-resource sec-
tor is one of the market’s best kept secrets.
And it’s only a matter of time before interna-
tional investors figure it out.
Disclosure: Paul Andreola and Brandon Mackie
are long HTL:TSX-V and DAP.U:TSX-V. No
position in any other securities mentioned.
About SmallCap Discoveries:
Smallcap Discoveries is a newsletter dedicat-
ed to uncovering Canada’s premier emerging
growth stocks. Smallcap Discoveries focuses
on growing smallcaps with positive cash flow
that have gone undiscovered by the broader
market. Smallcap Discoveries was created
as platform to share actionable ideas and
help investors get an edge in the markets.
Smallcap Discoveries’ mission is to bring
the world the best original research, on-the-
ground due diligence, and profitable ideas in
the smallcap space. If you’re an avid smallcap
investor, Join Us. n
About Brandon Mackie:
Brandon Mackie is currently Head of Research for
Smallcap Discoveries. Prior to joining Smallcap
Discoveries full-time, Brandon was VP of Financial
Planning & Analysis for venture-back food technol-
ogy company Soylent. Brandon got his investing start
from the value investing teachings of Warren Buffett
and Benjamin Graham, which inspired him to write a
microcap-focused blog called Moatology. When not
researching stocks, Brandon can be found surfing
and making music.
www.smallcapdiscoveries.com
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
MicroCap Review Magazine 57
 F E AT UR E D A RT ICL E
Investing in Electricity
Conservation
I n this article we describe the issue of waste in electrical systems and
introduce an innovative and patented solution to this old problem.
coMBaTinG ELEcTricaL LinE
Loss: ThE oVEr-VoLTaGE
proBLEM
The electricity we depend on every minute
of every day is generated from a variety of
facilities including coal and natural gas-
burning power plants, hydroelectric dams,
nuclear power plants, wind turbines, and
solar panels. From its point of generation to
the point of consumption, electricity goes
through several changes. Electrical energy
is wasted as it as transmitted over distance,
primarily due to conversion to heat and
electromagnetic energy. To minimize energy
loss, electricity from generating stations is
converted to higher voltage/lower amper-
age, and then, at the point of consumption
it is converted again to lower voltage/higher
amperage. Despite best efforts to reduce
waste, up to 6% of electricity generated is lost
in transit across the grid, and loss attribut-
able to distribution is not constant—it varies
with distance. In order to compensate for
line-loss, utilities increase the voltage of the
n BY SEAN PEASGOOD
58 MicroCap Review Magazine
electricity distributed with the farthest end-
point in mind. The result being higher than
needed voltage across the entire system.
TYpicaL EnErGY saVinG
soLUTions
To help conserve energy, the Rockefeller
Foundation estimates some $279 billion could
be invested in retrofitting the residential, com-
mercial, and institutional market segments in
the U.S. with window treatments, energy effi-
cient lightbulbs, energy efficient motors, and
other solutions. These solutions do work, but
they only address part of the problem.
Consider the problems for machinery
posed by poorly conditioned electric-
ity. A machine performs optimally when
it is operated at its specified rated voltage.
Machines operated using electricity out-
side of prescribed tolerances are subject to
reduced efficiency and increased wear. In
the event of machine failure, the biggest
Figure 1. Source: Union of Concerned Scientists
cost isn’t always the repair of the machine
itself; it can be the opportunity cost of the
machine’s downtime. Moreover, an elec-
tric current which exceeds the machine’s
operating range could also damage internal
components. High voltages can also cause
damage to machinery as magnets become
saturated and overheat.
Conservation Voltage Reduction (CVR) is
a tried-and-true practice of producing ener-
gy savings by reducing voltage in an electri-
cal system. It tends to be most effectively
deployed in electrical environments where
the voltage to the end customer is difficult to
control due to aging infrastructure and the
layout of the distribution system.
an innoVaTiVE WaY To saVE
EnErGY
Legend Power® Systems (LPS-TSX-V) is
an innovative provider of energy conserva-
tion solutions. It developed and patented
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the Harmonizer™, a product which reduces
electrical energy consumption in commercial
buildings. The Harmonizer is installed in a
building’s electrical room at the point where
power enters a building, and then works to
automatically optimize incoming voltage. It
is non-invasive in that, unlike some energy
saving alternatives, there is no requirement to
close floors or sections of buildings to imple-
ment the solution. This is also an important
consideration for historical and protected
buildings where physical alterations are not
permitted. The Harmonizer can be thought of
as an ‘industrial dimmer switch’, where voltage
can be dialed to a level that allows equipment
to run with greater efficiency and save energy
while reducing costly premature equipment
failure and extending equipment life expec-
tancy. As well, if the incoming voltage drops,
the Harmonizer automatically switches to a
bypass mode, allowing the existing line volt-
age to enter the building unimpeded. Legend
Power® believes a typical commercial facility
can expect to save between $14,000 to $20,000
per year with payback in less than 3 years. The
product comes with a 10-year warranty.
The Harmonizer™ is not a prototype or
concept; it is an energy savings product (and
a new category) that Legend Power® has
deployed in more 250 locations across 13
markets including office buildings, multi-
residential units, prisons, government build-
ings, industrial facilities, education facili-
ties, lodging, and recreational facilities.
Across the markets described above, there
are approximately 759,000 buildings in the
United States that would likely be strong
candidates for achieving material energy
saving benefits with Legend’s Harmonizer.
Figure 2
www.stocknewsnow.com
Figure 3. Legend Power’s Harmonizer ™
On October 13, 2016, Legend Power®
announced its first sale of a Harmonizer unit
in New York City to an unnamed Fortune
500 company. New York City is a strategic
market for Legend Power, given the number
of older buildings in the city and the city’s
comparatively high energy costs. To help drive
Harmonizers into this market and the broad-
er North-Eastern and Mid-Atlantic regions,
Legend Power has forged relationships with key
recommenders including utility Con-Edison, a
top 10 U.S. utility serving the five boroughs of
New York and Westchester County.
Outside of New York, there are at least
10 other U.S. states where the intersec-
tion of comparatively expensive electric-
ity costs, aging infrastructure and older
buildings provide opportunities for Legend
Power Systems’ Harmonizer solution,
including California, Oregon, Washington,
Colorado, New Jersey, Minnesota, Maryland,
Connecticut, and others on the east coast.
Legend Power’s management has estimat-
ed that North America presents a market
opportunity of $38 billion.
Conclusion
Although Conservation Voltage Reduction
(CVR) is a tried-and-true practice for pro-
ducing energy savings by reducing voltage in
an electrical system, it tends to be addressed
as a set of solutions rather than a sin-
gle-point solution. Legend Power® Systems
(LPS:TSX-V) is attempting to change this
with a solution that automatically regulates
distribution line voltages and bypasses the
entire system in the event of line voltages
falling too low. By using Harmonizers, prop-
erty owners can realize significant reduc-
tions in their electricity bills, with as little
as a 3-year payback. Legend Power Systems
is set for growth, targeting an estimated $38
billion market opportunity. n
www.sophiccapital.com
Disclosures
Sean Peasgood, Sophic Capital, and Sophic Capital’s
employees own common shares of Legend Power
Systems, Inc.
Legend Power Systems has contracted Sophic Capital
for investor relations services.
Here is a link to Sophic Capital Disclosures and
Disclaimers: http://sophiccapital.com/disclaimers/
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 59
 F E AT UR E D A RT ICL E
Invest and Make Money with
the Power of Knowledge
“Behavioral Finance Is Central To
Value Investing” Jim Kelly
B
ehavioral finance is central to value
investing. This is a quote that Jim
Kelly, director of the Gabelli Center
for Global Security Analysis at Fordham
University, stated leading up to a presenta-
tion given by Professor Andrew W. Lo on
January 24, 2018 at the Museum of American
Finance.
The Gabelli Center for Global Security
Analysis at Fordham University was
established in 2013 to support and pro-
mote investment analysis in the tradition
of Graham, Dodd, Murray and Greenwald.
The center offers a variety of programs and
events designed to promote collaboration
among its constituencies and to foster dia-
logue between the academic community and
practitioners.
I recently came across this a video  high-
lighting Professor’s Lo’s presentation titled:
“Adaptive Markets: Financial Evolution
at the Speed of Thought.” You can view
the video and transcription transcribed here.  Foundation Fellowship, the Paul A.
Please note that the video did not capture the
slides that went along with the presentation,
but I obtained them from Mr. Lo, which you
can view here.
n BY MAJ SOUEIDAN
60 MicroCap Review Magazine
BEhaVioraL FinancE –
EMoTions can aFFEcT YoUr
inVEsTMEnT dEcisions
If you have ever let emotion impact or
threaten your investment decisions, or if
you have an opinion on the Efficient Market
Hypothesis, I think you will find this video
presentation enlightening.
Andrew W. Lo:
…is the Charles E. and Susan T.
Harris Professor at the MIT Sloan School
of Management and director of the MIT
Laboratory for Financial Engineering. He has
published numerous articles in finance and
economics journals, and has authored several
books including
• Adaptive Markets: Financial
Evolution at the Speed of Thought
• The Econometrics of Financial Markets
• A Non-Random Walk Down Wall Street
• Hedge Funds: An Analytic
Perspective and the Evolution of
Technical Analysis.
His  awards  include the Alfred P. Sloan
Samuelson Award, the American Association
for Individual Investors Award, the Graham
and Dodd Award and numerous other
awards and honors
prEsEnTaTion hiGhLiGhTs
Andrew explains how he starts with an
acceptance of the old school Efficient Market
Hypotheses (EMH) and he then takes you
through his journey of why he concludes it
is not invalidated, when it appears the EMH
does not hold. Specifically, he argues that the
EMH is not necessarily an incorrect way to
view the financial markets, but rather that
during dynamic or unstable environments,
the assumptions that make up the EMH
are unrealistic. He expresses an opinion
that the old financial models are based on
static environments and need to “adapt”, as
the environment changes. From there, they
must take into account how investors react
(behavior) to these changes.  This is his basis
for his “Adaptive Market Hypothesis.”   Some
key conclusions include:  (slides 8 and 9)
FEaTUrEd conTEnT
• Real Estate Dividend Stock On Our
Radar: Limited Downside and 58%
Discount to Book Value
• Here’s Why I Finally Took a Long
Position in The Eastern Company
(EML)
• Could This Speculative Information
Arbitrage Play Be Worth An 8 Times
Current Price?
He ends with a discussion how Artificial
Intelligence (AI) plays a big role in our deci-
sion-making process and how AI can lead a
charge to create financial products that take
into account an individual’s behavioral foot-
print. He even touches on how record low
market volatility will not last forever, and this
is very interesting, given that the stock market
is beginning to experience more volatility.
Professor Lo’s delivery is articulate, and
the analogies he makes to non-financial situ-
ations as it relates to behavior may surprise
you. For example, he references a study by
economist  Sam  Peltzman,  that shows over
the long-run, U.S. regulation requiring that
new cars should be made safer (reinforced
www.stocknewsnow.com

bumpers, airbags and so on) essentially had
zero impact on “saving” lives:
“So what he concluded is that every time
one of these safety regulations was imposed,
initially it reduced the number of deaths
and then people adapted because there were
driving safer cars they simply drove faster
and more recklessly and so his conclusion
was, if you want people to drive more safely,
what you should do is to take way all of these
safety devices and install sharp spikes on the
dashboards pointing at the driver.”
Here are a few notable passages from
Professor Lo’s January 24, 2018 presentation:
Impetus for the book
And the state of affairs, I suspect most of you
know, is the fact that most of us who grew up
in this kind of a “Neoclassical financial eco-
nomics” type of a paradigm, were taught the
Efficient Market Hypothesis.  The idea that
www.stocknewsnow.com
prices fully and everywhere and always reflect
all available information.  And at the opposite
end of that spectrum is the fact that people are
people and we engage in all sorts of human
biases foibles and irrationalities.
There is a pretty wide gulf between these
two schools of thought and as a graduate
student, I was introduced to both of them and
it was really difficult to choose, you know it’s
kind of like a child listening to his or her par-
ents arguing, you know, you just want to stop
and get along and you know that they love
each other but they just you know can’t come
to terms.  So, I decided over the course of prob-
ably now going on 25 years to try to reconcile
these two warring parties and that is really the
nature of this book.
What I wanted to do was to describe the
different paths that I have ended up taking to
try to reconcile these two schools of thoughts
and really that path started off as a graduate
student when I started reading a lot of the
psychology literature.
Like many of you I began with the idea
that markets are efficient, people behave in
a rational manner and from that literature, I
was brought to the psychology literature that
showed all sorts of experiments, behavioral
economics, behavioral finance that demon-
strated that people did not react in the ways
that we would predict using expectation of
mere utility functions and so on.
Volatility Will Revert to
The Mean
Of course, what goes up eventually does come
down and so as we start adapting to this kind
of a new low level of volatility there is a rude
awakening that we are facing. Something to
keep in mind. That is one important implica-
tion of adaptive markets. Markets are not the
same over time and the population of inves-
tors they are not the same over time.  They
have changed and they adapt and sometimes
that adaptation is positive and beneficial, but
other times that kind of adaptation can be quite
dangerous and detrimental.
Adaptive Market
Hypothesis
The adaptive market hypothesis begins with
the acknowledgement that the traditional par-
adigm of investment analysis, what we know
and love and use in our day-to-day practices
is not wrong, but it’s incomplete.  It doesn’t
capture the fact that in a very dynamic
environment, we are not going to see the
same king of relationships as in the static
environment. So, when the things are stable,
then stable investment policies make sense.
But when things are highly dynamic, well then
actually things don’t stay the same and people
adapt to those kinds of changes and the fact is
that right now we are living a very dynamic
economy with lots of things changing even
day-to-day and so the reason that many of
these theories look like they are not working is
not because they are wrong, but because they
are not being applied to the right context and
MicroCap Review Magazine 61
we need a meta theory to allow us to integrate
all of these ideas. That is the idea behind the
adaptive markets hypothesis.
Changing Environments
This is a graph of the cumulative performance
over $1 investment in the S&P 500 from
1926 to the present. Now the reason you don’t
recognize this, it is because I have plotted it
on a semi logarithmic scale and the reason I
did that was because on a log scale, it turns
out that equal vertical distances correspond
to equal rates of return and so if you have got
an investment that has roughly the same rate
of return over the time, it looks like a straight
line on this graph and when you look at this
graph, you see that the United States Stock
market has been one of the most consistent
investment in the history of capital markets
.  For a period of about five or six decades,
the US stock market looks like a straight
line. It turns out that during this period, the
assumptions that I showed you on the previ-
ous page were an excellent approximation
to this much more complicated reality. Does
not much matter where you invest during
that period of the 1930’s to the early 2000’s,
you would have earned approximately a risk
premium of about 8% with an approximate
standard deviation of about 15-20 %. Pretty
reliable risk reward trade-off during that peri-
od of time.
But take a look at the last 15 years.  Do
you believe that the last 15 years is just like
the previous 50? If you do then you don’t need
any other theories, the traditional efficient
markets hypothesis, Cap M and all of the
various different implications are just fine.
But I would argue that the last 15 or 20 years,
it does look a little bit different and there are
reasons that I will give you in a few minutes
why I think there are very different. And in
case you want to see a better example of
this kind of a difference, let me show you
Japan. So, this is the Japanese stock market
form 1940’s to the present. They also had
their period of about 20 or 30 years of very,
very stable performance in the Japanese stock
62 MicroCap Review Magazine
market.  But starting in the 1980’s, they
ran into a problem,  as I am sure all of you
know, and the lost decade became the lost two
decades and now we are running on the lost
three decades in Japan. So once again, you
look at this and you ask yourself well do you
think that the last 30 years was just a minor
blip in an otherwise upward trending curve
or did something change? I would argue that
something has changed and so the adaptive
market Hypothesis takes change seriously and
asks the question, what are you going to do
about that change. How are you going to
respond? How will you adapt to that change?
The basic idea behind the adaptive market
hypothesis really follows that of evolution-
ary biology – and the great evolutionary
biologist Theodosius Dobzhansky once said
that nothing in biology makes sense, except
in the light of evolution and so I am going
to steal his phrase and repurpose it for our
current context, which is that nothing in the
financial industry makes sense expect in the
light of adaptive markets and I am going to
try and convince you of that by giving you
some examples.
Alternative Take on EMH
as it relates to GARP
Microcaps
Many of us do not accept the tenets of the
efficient market hypothesis when it comes
to investing in microcap and nanocap stocks
(market capitalizations less than $300 mil-
lion). At times, I will even attempt to exploit
inefficiencies in stocks with market caps up
to $1 billion. Peter Lynch handily beat the
market by investing in stocks with  market
capitalizations up to $5.0 billion.  You can see
Lynch’s stock picking guidelines here.
As a microcap and nanocap investor, I
found Professor Lo’s topic to be extremely
interesting.  We can poke holes in the tradi-
tional definition of the EMH because micro-
cap returns have been proven to beat out
bigcaps and the market over time, by a wide
margin. Here is the classic definition of the
EMH:
“The  efficient market hypothesis  (EMH)
is an investment theory that states it is impos-
sible to “beat the market” because stock mar-
ket efficiency  causes existing share prices to
always incorporate and reflect all relevant
information.”
This definition is fairly strict. I think most
of us would insert “quickly reflect all relevant
information.”
Mr. Lo’s presentation can inspire us to
inspect the EMH a little more thoroughly
than we may have in the past.  It’s standard
practice to presume that the higher than
“market” returns we are able to get by invest-
ing in microcaps are due to a variety of fac-
tors, such as risk aversion, low liquidity aver-
sion, lack of institutional interest and a less
fluid flow of information when compared
to bigcaps.  However, after viewing Lo’s pre-
sentation, one could start to at least consider
this subject from different angles.
A question that popped into my head includ-
ed: How should we be defining ‘efficient’?
Is it really inefficient that microcaps
should offer investors higher rates of return?
With Lo in mind, the answer could depend
on how much of the arbitrage is due to
lack of fluid information flow (information
arbitrage) and misinterpretation of business
risk factors  compared  to how much is due
to behavior, regulation and environmental
factors shaping attitudes about overall
risk aversion and appetite for certain asset
classes. I would argue that it’s quite efficient
that, over the long-term, some factors should
allow growth at a reasonable price (“GARP”)
microcaps to exceed the returns of the
market or large caps.
These two forces work together to give
you opportunities and to determine how
long it takes the market to reward you for
your hard research.
How is it be possible to buy Evans &
Sutherland  (OOTC:ESCC)  at valuations
($0.14 in 2014) indicating bankruptcy when
SEC filings clearly indicated that liquidity
issues would be favorably resolved well ahead
of its huge multi-bagger move to $1.98; or
to buy Zynex Inc  (OOTC:ZYXI)  ($0.40 in
www.stocknewsnow.com
2017) weeks before it began its monster
move to $5.50, when press releases had been
clearly indicating sustained profitability and
de-risking balance sheet moves?
The inefficiencies in the microcap uni-
verse provide tremendous information arbi-
trage chances.    It makes perfect sense that
information arbitrage and gaining a better
understanding of a company’s growth and
risk profile than your peers exploits the
“inefficiencies” of the EMH. It’s also clear
that the less participation by investors in the
microcap space compared to large caps helps
create this opportunity. This “lack of par-
ticipation” has always been a factor.  But how  $300 million).
much of  the alpha is from inefficiencies.
Maybe, what is efficient, is how behavior
changes over time to add to or subtract from
the pool of microcap investors and impact
their attitude towards related stocks, thus
influencing how long it takes for stocks to
react to positive developments and investors’
required rates of return.
Before 2008, I would have told you that
prices would adjust upward to the informa-
tion arbitrage identified through great GARP
research in a reasonable time frame, once the
market found vital information.  In essence,
enough inefficiency existed to give you time
to buy stocks early, but eventually, enough
market interest (efficiency) would build to
allow you to earn a nice return on your
research in a reasonable amount of time. At
times, I would hold of hundreds of stocks,
Peter Lynch style, and easily beat the market.
Since the Global Recession, it has been
my observation that the performance of
quality  GARP  microcaps have often
underperformed speculative “get rich quick”
microcaps and their larger counterparts.  My
biggest takeaway is that it has been taking
longer for these GARP stocks to rise to
fair valuations.  How is it possible that it
takes longer to be rewarded for your good
research, when information is more avail-
able than it has even been?
The answer takes me back to a  presenta-
tion  I had the pleasure of giving at Fred
Rockwell’s microcap  conference  event on
www.stocknewsnow.com
April 11, 2016 in Toronto that could tie
neatly into Professor Lo’s logic. The global
recession has, no doubt, impacted the way
investors act and react in the stock market.
Reduction in Pool of Investors:
• Many microcap investors disap-
peared from the market and/or never
came back to invest in microcaps.
• The rise of ETFs and passive invest-
ing has reduced the number of inves-
tors using stock picking as a strategy,
a dagger in the heart to microcaps.
• ETFs typically are not investing in
true microcaps (market cap less than
Changing Attitudes to Risk:
• Some investors don’t want to deal
with the perceived risk inherent in
microcaps, so they think they can
take less risk in large caps.
• Large cap returns have been sufficient
(due to Fed policies) to keep investors
satisfied
• Investors don’t want to hold stocks
long-term (holding period of retail
investors has gone from 6 years to 6
months).
• Aversion to time, ironically, has
investors looking for highly specula-
tive (non-GARP) microcap plays like
biotechs and pump and dumps to
make big money fast.
These trends are both good news and bad
news.  It’s great to be able to buy all the stock
you want of some really undervalued names,
but there is a price to pay other than dollars
and cents. GARP investors have needed to
wait longer to get paid. If you are a long-
term investor, you might not be phased, but
if you have been spoiled to be accustomed
to achieving quick returns, then you may
have felt a high level of frustration for the
last 10 years or so. As for me, my behavior
has changed in a few ways. I am “adapting”
to be a more patient, longer-term investor,
and employ a more concentrated invest-
ment style. Because I know I may need to
be invested longer in some of my stocks, I
take deeper dives into their stories, which I
think has made me a better investor.
Conclusion
The pendulum swings both ways. The time it
takes for many GARP microcap stocks to reflect
their true value is taking longer than other cycles
I have gone through, but GARP investors are
finally beginning to get paid sooner.
Overall, I think examining the EMH
is an interesting exercise, but reality will
often diverge from hypothesizes and theo-
ries.   One thing is for certain: information
arbitrage chances in the microcap world
are both real and widely present, and wont’t
change anytime soon. n
ABOUT MAJ SOUEIDAN
I lead the GeoInvesting Team on a daily basis to
increase build a healthy investment opportunity
pipeline and heighten GeoInvesting’s awareness in
the financial market. I stress the concept of “informa-
tion arbitrage” in an era where information overload
has actually made it more difficult for investors to
locate profitable information. An arbitrage exists
when a disconnect between stock prices and available
public information on a company is noticeable, and
monetarily worth pursuing. 
ABOUT GEOINVESTING
GeoInvesting is a research boutique which specializes
in microcap stock research and portfolio protection
investigations for its members. Co-founders Maj
Soueidan and Dan David find money-making oppor-
tunities that others flat out miss. In a nutshell:
** We share our ideas in hopes that others can
profit alongside our team.
** We clarify the dynamics of the micro-cap space
to show you that big investments can come in small
packages.
** We provide education on how to do conduct
real research, leading by example.
** Our expertise gives us,  and therefore you, an
advantage over the everyday investor.
www.geoinvesting.com
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
MicroCap Review Magazine 63
 F E AT U R E D A RT I C L E
Why Family Offices Should Be Your
First Choice For Capital Investment
Five Steps to a Successful Raise
A
s our third article on family offices
for Microcap Review, we’re sharing
a deeper dive into some of the secrets
to successfully completing transactions with
family offices based on our own investment
practices and analysis of deals presented to us
over the last 12 months.
The family office investor segment has
established its presence as a significant glob-
al alternative to traditional institutional capi-
tal sources. According to a recent report by
Campden Research which surveyed a pool
of 262 family offices the average assets under
management was $921M in 2017. And these
assets were highly diversified. As more FO’s
begin to report their specific investment
practices, the portfolio diversity of this
investor segment is increasingly revealed.
The results are staggering, and clearly point
to opportunities within the microcap sector.
It is clear that given the steadily increas-
ing quality level of microcap companies,
and family offices aggressively in search of
investment opportunities, we expect to see
convergence between the two groups. The
high-quality end of the microcap spectrum
i.e semi-liquid NASDAQ listed companies of
less than $100M, offers “semi-public” oppor-
n BY KARL DOUGLAS
64 MicroCap Review Magazine
tunities to invest in direct venture and private
equity, an ideal family office feeding ground.
According to the Campden Report, in
2017 direct venture capital and private equi-
ty investments represented 9.3% of port-
folios. Direct investments are investments
where the investor invests directly in a com-
pany rather than investing through a blind
pool venture capital fund or private equity
fund. We reported previously that direct
investing is a central theme, as family offices
seek to reduce fees and gain greater control
of risk exposure. This is now confirmed by
the report. Where 9.3% may not seem large
on first glance, consider that number repre-
sents over $1 trillion dollars globally. And
at 9.3% it’s the second largest percentage in
the alternative investment segment behind
direct real estate investment which still holds
the highest position allocation at 16.2%.
As family office investors ourselves, we
routinely compare notes with other offices.
We are seeing increased corroboration of the
Campden report. For example, in a recent
discussion with a co-investor which we had
assumed was exclusively in real estate, we
learned that they had recently invested in a
cobalt mine in Africa, and were in the pro-
cess of rolling out an ABL debt portfolio. It is
our belief that armed with such data, compa-
nies in the microcap sector should market to
family offices as their first choice. In favor of
the issuers, family offices offer many benefits
which we’ve covered in other issues. Some of
the primary benefits are:
• Long term equity and debt capital.
• Typically do not have finite invest-
ment horizons.
• Tend to be anchor investors which create
stability for follow on investors and also
for business development and credit.
Similarly Microcap companies offer many
of the key ingredients that interest family
offices:
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 • High growth potential  Family offices are unlikely to participate in
• Liquidity
• Transparency  same terms are a $1,000,000 HNW investor.
• Venture Exposure
• Private Equity
5 ways to be successful  willing to weather the storm provided that the
As part of our deal sourcing activity we
attend a number of conferences each year.
We also have relationships with many of
the investment banks. We prefer confer-
ences because we get to interact directly with
management teams and hear first hand the
growth strategy for the companies. Based
on recent interactions we’ve highlighted five
factors that contribute to successfully raising
capital from family offices.
Understand Family Office
Drivers –
1. Family offices tend to be fundamental
investors.
They are much more interested in your bal-
ance sheet and cash flow statements than in
your VWAP. Even though you are public,
they look at your company as a private com-
pany with a liquidity option, nothing more.
They are interested in your business model,
market potential and execution plan. The typi-
cal family office investor will seek to become an
anchor investor bringing balance sheet stabil-
ity to your company, which reduces investor
uncertainty and increases creditor and vendor
confidence. 70% of microcap companies go
out of business because they run out of capital.
CEOs and CFOs that attend microcap
conferences have fallen into a groupthink
model of “I need to create volume in my
stock, so I should hire an IR firm and pitch
the buy-side”. That’s all well and good, and
serves a purpose, but when sitting with a
family office, they are unlikely candidates to
purchase common stock on the open mar-
ket, or even through a private placement.
Failure to adjust your presentation for the
audience is a fatal mistake that we have seen
many managers commit.
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a syndicated deal. They won’t invest on the
Why should they? When the going gets rough
and the quick money and market driven
money disappears, family offices are generally
fundamental business model makes sense.
To get family office capital help them to
understand the merits of the business model.
Only then will they consider investment in
a preferred share or debt round. And more
often than not they will require a custom
designed round offering a significant array
of shareholder rights and protections.
2. Lead with Management
Family offices tend to invest in manage-
ment. The impression you create is 51% of
the decision. We’re always surprised at the
lackluster way management are portrayed
in written materials. Prior successes and
failures should be well described. Don’t cut
and paste an old description from 10 years
ago. Hire a professional writer if necessary.
We’ve read many plans where management
successes are poorly described, only to learn
more about positive experiences during due
diligence. Share your wins and your losses.
Losses to the family office are examples of
what you won’t repeat again. So they are of
as much value as the wins.
3. Competitive Market and Marketing Plan
This is a real area where most microcap
managers fail. It is critical to have a full
understanding of market size and competi-
tive landscape. These are not just lines in a
business plan, this is your revenue and earn-
ings growth potential! And family offices are
aware of this point. We have seen NASDAQ
company presentations where management
describe less than 25% of their competition.
We’ve also seen scenarios where the market
size is described as X, and the entire com-
petitive landscape is only 25% of market size
claimed. Do your homework in this area and
have a clear execution plan which describes
how your company will gain market share.
4. Governance Structure
Family offices are driven by preservation of
capital. Governance and transparency are two
components of risk mitigation that allow fam-
ily offices to understand what’s happening at
the company. Although NASDAQ companies
have this as a rule, managers tend to under-
utilize the board of directors and don’t solicit
directors that can have a major impact of this
business. Attract major talent to your board
of directors and showcase it. Value-add direc-
tors can make a huge difference and send a
message to your investors. Ability to attract an
iconic retired industry executive also speaks
loudly about the business potential and man-
agement acceptance in the community.
5. Financial Plan
A well thought out financial plan is critical
to the family office. Understanding when
major cash calls will be required and under-
standing the capital stack in total is also
important. Although liquidity is not usually a
driver, liquidity for risk mitigation purposes is
important. So articulate the various liquidity
options thoughout the plan timeline.
A clear understanding of these drivers will
set your company and your capital raising
efforts well ahead of your competition in
terms of securing a family office backer. n
About the author:
Karl B. Douglas is Chief Investment Officer at
PPMT Capital Advisors, Ltd.., a multi family office
advisory firm. Mr. Douglas has a career that spans
over 30 years investing in private and public com-
panies. PPMT Capital invests in private equity
and debt investments of $15M to $100M in Energy,
Mining, Industrials and Real Estate.
For further information contact:
kdouglas@ppmtcapital.com
800-401-9017
Note: This article is not an attempt to pro-
vide investment advice. The content is purely the
author’s personal opinions and should not be con-
sidered advice of any kind. Investors are advised to
conduct their own research or seek the advice of a
registered investment professional. The author does
not own shares or any equity or debt interest in any
companies mentioned in this article before or at its
publishing.
MicroCap Review Magazine 65
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66 MicroCap Review Magazine www.stocknewsnow.com
 CANNABIS CORNER
Investors Warm Up to U.S. Cannabis Companies
I n past columns, I have discussed how
Canada, which has now formally legalized
for adult access beginning October 17th, has
been leading the global cannabis industry, sug-
gesting that “anyone who cares to invest in the
global cannabis industry must pay attention to
these Canadian companies.” The U.S. cannabis
industry is far bigger, but federal illegality and
concerns that the status quo might persist or
even revert have left many investors on the side-
lines. In the words of the Bob Seger, “Against the
wind, we were runnin’ against the wind.”
In April, though, things changed dramati-
cally for the better. Out of the blue, Senator
Corey Gardner, a Republican from Colorado,
announced that he and President Trump had
come to an agreement after Gardner had held up
Department of Justice nominations that would
allow Gardner to introduce legislation to protect
the rights of states to oversee cannabis regula-
tion with Trump’s support. He followed through
in June, introducing with Senator Elizabeth
Warren, Democrat of Massachusetts, the
Strengthening the Tenth Amendment Through
Entrusting States (STATES) Act. Formally, this
is known as S. 3032, and a companion bill,
H.R. 6043, was introduced by Ohio Republican
David Joyce in the House of Representatives.
While the chances of passage are not very
high, the pendulum had swung too far in the
direction of negativity, and the signal that
the cannabis industry won’t be trampled by
the federal government has lifted the spirits
of investors as well as operators. Recall that
the industry had faced enormous uncertainty
following the appointment of Jeff Sessions as
n ALAN BROCHSTEIN
www.stocknewsnow.com
Attorney General, and his rescission of the
Cole Memo, a guidance letter from 2013 that
created a temporary safe harbor for operators
and regulators, had had a profoundly negative
impact on sentiment earlier this year.
With the chill lifting, indeed capital formation
has taken a turn for the better. Both private and
public companies are finding the flow of capital to
be more favorable as we have seen the emergence
of investment funds who are able to write big
checks. For example, Gotham Green Partners in
New York City invested $50 million into iAnthus
Capital (CSE: IAN) (OTC: ITHUF), which oper-
ates in Colorado, Florida, Massachusetts, New
Mexico, New York and Vermont. It also invested
$15 million into privately-held Flow Kana, a
California-based company that provides craft
cultivators with distribution, compliance and
other services. Several other funds are deploying
capital as well as they are apparently having an
easier time raising funds.
In a sign of how important the U.S. capital
markets will be globally over time, Tilray,
the fifth largest Canadian licensed producer,
announced in June that it would be conduct-
ing a NASDAQ IPO. In fact, the company,
which is controlled by Seattle-based pri-
vate equity fund Privateer Holdings, won’t
be pursuing a dual listing in Canada. U.S.
investment bank Cowen was underwriter of
the IPO along with BMO Capital Markets.
As I have mentioned in the past, the valu-
ation gap is quite large between Canadian
companies and their cheaper counterparts
in the U.S. While federal illegality and some
issues like the punitive federal taxation of the
industry, which is known as 280E, certainly
justify higher prices in Canada, all things
equal, the gulf remains too wide, especially
if the U.S. policy is going to be more laissez-
faire. Of course, a single tweet could change
the sentiment again, but, for now, the industry
appears to be taking advantage of the better
political environment that is evolving by rais-
ing larger amounts of capital than ever before.
Not surprisingly, a lot of the capital is still
coming from Canada. Two recent go-public
transactions highlight how the path to going
public runs through Bay Street, including
MedMen (CSE: MMEN) (OTC: MMNFF)
and Green Thumb Industries (CSE: GTII)
(OTC: GTBIF), both of which debuted in
June. While California-based MedMen strug-
gled following the initial trade, the company,
with operations in California, Nevada and
New York (and soon Florida) raised over
$110 million just prior to going public. The
company provided projections of sales in 2019
of over $450 million. GTI, on the other hand,
which reported sales of almost $11 million in
Q1, doubled following its debut.
Since 2014’s big bubble and crash following
the Colorado legalization, real cannabis compa-
nies have been very cautious about going public.
This remains the case, for now, with respect to
the OTC, but going public on the Canadian
Securities Exchange has become quite fashion-
able. Investors in the public markets can finally
invest in cannabis companies that represent the
true industry by buying the stocks in Canada or
through their dual listings on the OTC. n
Editor’s Note:  Alan Brochstein, CFA, began his
career as a bond trader in NYC in 1986 with Kidder,
Peabody and worked with CS First Boston and
Criterion investments until transitioning to equi-
ties as a analyst/portfolio manager in 2000.  In
2007, he began AB Analytical Services, where he
provided research and consulting to several invest-
ment advisors while also becoming one of the most
popular contributors at Seeking Alpha.  In 2013, Alan
launched 420 Investor, an online community focused
on publicly-traded companies in the cannabis sec-
tor, and, more recently, he began New Cannabis
Ventures, a news & information platform that high-
lights the most promising companies and influential
investors in the cannabis industry.
Disclosure: I own no stocks mentioned. iAnthus is a
client of mine at New Cannabis Ventures.
www.420investor.com
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 67
 B E LT WAY C O R N E R
Regulation of Crypto
at a Crossroads
B efore the summer of 2017, cryptocurrencies had yet to enter the main-
stream consciousness, much less the crosshairs of Capitol Hill.
n BY DINA ELLIS ROCHKIND, Esq.
AND JOSHUA SAMUEL DOWNER, Esq.
68 MicroCap Review Magazine
That changed with record-smashing prices
and the massive proliferation of initial coin
offerings (“ICOs”). By the start of sum-
mer 2018, the sleeping giant of government
intervention had begun to stir in the form of
coordinated enforcement actions by the U.S.
and Canadian governments. Next came
rhetorical rumblings by regulatory agen-
cies. Then the growl of hearings on Capitol
Hill. Now, as the summer of 2018 draws to
a close, the beast is fully awake and showing
signs of hunger, with its gaze fixed squarely
on crypto. At the moment, it is torn between
viewing the industry as a companion for the
hunt or a prey to be consumed. Crypto’s next
moves will likely determine its fate.
MonEY LaUndErinG coUnTEr
narraTiVEs
What appears certain is that Congress and
the regulatory and enforcement agencies are
poised to take significant steps in the com-
ing months to decisively shape the crypto
industry. The most critical issue driving
government action is money laundering and
the financing of terrorism and organized
crime. So far, the government’s strongest
impulse has been to see crypto as the enemy
in this regard. Congressional hearings have
been conducted that focus on the negative
impact of cryptocurrencies on money laun-
dering. Prominent voices, such as Chairman
of Federal Reserve Board Jerome Powell,
argue that money laundering is the primary
use of cryptocurrency. The Department of
Justice released a report presenting virtual
currencies as an enabler of financial crime
and formed a Digital Currency Initiative
to increase money-laundering prosecutions.
The Financial Crimes Enforcement Network
has reported a significant uptick in sus-
picious activity reports regarding crypto-
related activity.
Viewed in this light, one proposal would
be for Congress to simply ban trading in
cryptocurrencies altogether.
But of course, there is a counter narra-
tive to be told, which is that crypto is the
most effective means of not only transfer-
ring value digitally, but of tracking it as well.
The great virtue of this story is that it is
true. A member of the Drug Enforcement
Administration’s Cyber Investigative Task
Force noted that cryptocurrencies actually
give law enforcement “a lot of tools to be able
to identify” money launderers, and that she
“actually want[s] them to keep using them.”
It is critical for the crypto industry to make
this case clearly and emphatically to Capitol
Hill. The focus should be so-called “privacy
tokens.” A strong distinction must be made
between them and coins such as Monero
that appear explicitly designed to facilitate
criminal activity, and which the government
will inevitably devour.
www.stocknewsnow.com

Steps Towards Positive
Regulation
The encouraging news is that many in
Congress are eager to be educated about the
nuances of the crypto industry, and there is
movement on the Hill toward positive regu-
lation. In a hearing in May, several members
of the House Financial Services Committee
assertively pressed a positive case regarding
cryptocurrencies to the representatives of
the Securities and Exchange Commission
(“SEC”) who were testifying. More recently,
numerous members have drafted or signed
on to a letter that they plan to send the SEC
seeking clarity on a range of issues related to
initial coin offerings, including greater trans-
parency on what would justify an enforce-
ment action.
The SEC is showing signs of softening its
stance. In a rare rebuke of its own staff, the
Commissioners stayed a decision to deny a
rule change that would have permitted the
listing of bitcoin-related exchanges on NYSE
Arca. If the SEC Commissioners ultimately
reverse the denial, that would be a milestone
in integrating the trading of cryptocurren-
cies with the traditional financial markets.
Security or Not a Security
This summer also saw a significant, if lim-
ited, victory for the non-classification of
cryptocurrencies as securities, when SEC
Commissioner William Hinman declared in
a speech that the “present state” of Ether and
the Ethereum network “are not securities
transactions.” In an encouraging sign to the
market that a token could “evolve”, Hinman
indicated that the SEC viewed Ether as not a
security without taking a position on wheth-
er the fundraising that accompanied the
creation of Ether had caused it to initially be
a security. However, Commissioner Hinman
also cited Ethereum’s current “decentralized
structure” in coming to the SEC’s decision,
which raised doubt whether the SEC’s posi-
tion would apply to “consensus” transaction
models used for other coins, such as Ripple’s
www.stocknewsnow.com
XRP, which are arguably more centralized.
The stakes of whether to consider the
generality of blockchain-based tokens to be
securities are increased by the perception
of widespread fraud among ICOs. On the
other hand, the impulse for regulation is
mitigated by the countervailing case for the
overall social benefit of the crypto industry.
The SEC is at a moment of decision on this
issue, which underscores the importance of
the industry assertively making the case for
its socially transformative potential.
Energy and the Blockchain
Another increasingly sensitive regulatory
issue is the incredible amount of energy that
is used to mine tokens in the traditional
“proof-of-work” models used by bitcoin,
ethereum and others. The Senate Energy
Committee recently held a hearing to con-
sider the energy efficiency of bitcoin and
related currencies. The high energy usage of
these traditional cryptocurrencies, and the
concentration of their mining operations in
China, presents a challenge to the industry.
On the other hand, those liabilities also pro-
vide Ripple an opportunity to make the case
that the consensus model is more sustainable
and secure. Whether those attributes will
persuade the SEC to refrain from declaring
XRP and other consensus-based tokens to
be securities may depend on how compelling
a case is made for their overall social utility.
• • • offerings and the development and expansion of
Congress and the U.S. regulatory and
enforcement agencies are poised to impose
significant regulations on the crypto indus-
try in the coming months. The future of the
industry depends significantly on whether
the government perceives crypto to be an
ally or an enemy in the fight against money
laundering and organized crime. Regulatory
agencies are also highly sensitive to the
threat posed by fraud in initial coin offer-
ings, particularly to retail investors. It is
a critical juncture. If there were ever a
moment for the industry to make its case in
Washington, it is now. n
Dina Ellis Rochkind  is Of Counsel in the Paul
Hastings Government Affairs practice www.paul-
hastings.com and is based in the firm’s Washington,
D.C. office. Her practice focuses on representing cli-
ents before Members of Congress on Capitol Hill and
the Executive Branch. Ms. Rochkind represents cli-
ents in matters involving regulatory initiatives, poli-
cymaking and legislation, and enforcement actions.
Ms. Rochkind has over 20 years of experience on
Capitol Hill, lobbying, and working for the Executive
Branch. Prior to joining Paul Hastings, she served as
Washington Director in the office of Rep. Mike Coffman
(R-CO). Other Capitol Hill experience includes serving as
senior staff for various Congressional Committees and for
Senator Pat Toomey (R-PA). Ms. Rochkind also served in
the George W. Bush Administration as Deputy Assistant
Secretary at the Treasury Department. She has been
involved in drafting major pieces of legislation over the last
two decades, including: the 2005 bankruptcy reform legis-
lation, the FACT Act, E-Sign, Check 21, Federal Deposit
Insurance Reform Act, Gramm-Leach-Bliley Act, and,
most recently, the comprehensive and bipartisan JOBS Act,
for which she was the lead staffer in the Senate.
Ms. Rochkind has worked across party lines on
both sides of the aisle to achieve key legislative suc-
cesses and has a reputation for “getting things done”
in Washington. She is also experienced in crisis
management. During the auto industry crisis, Ms.
Rochkind led the lobby to rescue Chrysler and han-
dled the consequences and fallout from its bankrupt-
cy. She has led legislative advocacy on behalf of major
corporate entities and advised congressional leaders
on issues such as banking, bankruptcy, insurance,
other financial services, and economic development.
Prior to leading Rep. Coffman’s office, Ms. Rochkind
served as Vice President of Federal Government
Affairs for a leading mortgage lending company.
Joshua Downer  is an associate in the Bank
Regulatory and Global Banking and Payment Systems
practices of Paul Hastings. His practice focuses on
regulatory and transactional matters relating to
banking, fintech and payment systems. Mr. Downer
regularly represents traditional and non-traditional
financial institutions in transactions and matters
before federal and state bank regulatory agencies. He
also advises clients on blockchain and cryptocurrency
matters, including government affairs, initial coin
services on various cryptocurrency exchanges.
Mr. Downer received his A.B. in Government
from Harvard University, his MSc. in International
Political Economy from the London School of
Economics, and his J.D. from Vanderbilt University,
where he graduated Order of the Coif in 2013. Mr.
Downer clerked for the Honorable Samuel H. Mays,
Jr. on the United States District Court for the Western
District of Tennessee. Prior to joining Paul Hastings,
he worked at another multinational law firm in
Washington, D.C. 
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 69
 P R O F I L E D C O M PA N Y
creso pharma Ltd.
C
reso Pharma was founded by a
team of highly-experienced phar-
maceutical executives who saw the
huge potential in the cannabis industry. The
team bring years of pharmaceutical expertise
as well as the associated methodologies and
rigour to successfully harness the potential
of cannabis for people and animal health.
Creso’s mission is to bring the best of can-
nabis to better the lives of people and animals.
To do this, Creso uses the latest in science
and research to develop, register and com-
mercialise innovative cannabis and hemp-
derived products. Since inception and as a
global operation, Creso’s experienced leader-
ship team, as well as its diverse geography, has
enabled its expansion into different markets.
Since launching, Creso has delivered a
number of firsts in the cannabis industry; it
was the first to import medicinal cannabis
into Australia, the first to launch innovative
hemp derived products into Switzerland for
humans and animals and recently became
the only Australian-listed medicinal cannabis
company with direct exposure to the oppor-
tunity-rich Colombian cannabis market.
Dr. Miri Halperin Wernli, Creso Pharma’s
CEO and co‐founder said: “I truly believe that
the beneficial properties of cannabis deliver
better health outcomes in people and animals.
70 MicroCap Review Magazine
By using my 30 years’ experi-
ence in the pharmaceutical
and biomed industries and
partnering with pharma
experts with long pharma
and scientific expertise, we
have been able to leverage
our scientific knowledge
to deliver the highest qual-
ity, trustworthy cannabis
and hemp products across
a range of areas spanning
therapeutics, topical applica-
tions, animal health, lifestyle and nutraceuticals.
“Our business model means we will con-
tinue to partner with experts to help launch
our innovative products into new territories.
These partners benefit from our un-paral-
leled expertise in this area and we benefit
from their in-market reputation and ability
to open doors for our ever-expanding prod-
uct line in human and animal health.”
Conservative estimates predict the nutra-
ceutical and medicinal cannabis industry
could grow to US$31 billion in the next
three years.1 Creso’s global footprint posi-
tions it perfectly to seize market share in the
industry, drawing on its highly experienced
leadership, diverse geographic spread and
strict adherence to pharmaceutical rigour.
asx: cph
Creso is currently expanding its presence
in North and South America – two lead-
ing markets for the cannabis industry and
forecast to be worth $48 billion by 2028.2
Creso’s expansion in this market is coming
to life through the construction of Mernova
Medicinal’s Nova Scotia-based state of the art
fully GMP cannabis growing and extraction
facility – due for completion by Q4 2018 - the
completion of Creso’s acquisition of Kunna
S.A.S. in Columbia, and the appointment of
a Chief Operations Officer for the Americas.
Creso’s recent product launches of anibi-
diol® and cannaQIX® in Switzerland resulted
in initial revenues as well as confirmed reor-
ders and commercial agreements signed with
partners to commercialise Creso’s human and
animal health products across key European
countries, the Middle East and Latin America.
At the same time, the Creso lifestyle portfolio
is growing with the first samples of its choco-
late and beer products in market for testing. n
For more information, please visit:
www.cresopharma.com
(Endnotes)
1 Brightfield Report cited in Financial Post
2 Forbes Magazine, Legal Cannabis Industry poised
for big growth in North America and around the
world (source: Arcview Market Research & BDS
Analytics)
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www.stocknewsnow.com MicroCap Review Magazine 71

 ASIA CORNER
Hong Kong Exchange
Attracting Chinese
Unicorns and Biotechs
S ince changing its listing rules earlier this year, Hong Kong is see-
ing an escalation in listings from China’s new-economy and biotech
companies.
The Hong Kong Exchange expanded its
listing rules in April to allow companies
with dual-class share structures and pre-
revenue biotechnology firms to list on the
exchange in an effort to attract blockbuster
Chinese tech and new economy companies
as well as become the IPO destination for
biotech startups. Long thought of as the
place where east meets west, Hong Kong is
perfectly positioned to provide access to one
of the fastest growing regions of the world.
With the new listing reforms, the SARS has
become more competitive with the US for
the IPOs of China’s mega technology and
biotech firms. Previous to the new rules
being implemented, these companies would
likely go to the US for listing, but now can
enjoy the advantages of geography and lan-
guage through a Hong Kong listing.
n BY LESLIE RICHARDSON
72 MicroCap Review Magazine
Approximately 220 companies are antici-
pated to go public in Hong Kong this year,
with total funds-raised by IPOs forecasted to
be in the range of HK$200 billion to HK$250
billion, according PwC. For the first half of
2018, Hong Kong maintained its ranking as
the third largest IPO destination with 108
new listings raising a total HK$50.4 billion
of which the GEM board recorded 50 IPOs
and HK$3.4 billion of total fundraising.
Telecommunications firms represented 41.4
per cent of the IPO funds raised in the first
half which includes US$4.7 billion raised by
Xiaomi, followed by financials at 19.8 per
cent and technology at 11 per cent.
Despite the pressures in the Hong Kong
stock market from trade tensions, slowing
global growth and tightening U.S. monetary
policy, some analysts believe that Hong Kong
can regain its top position this year as more
technology companies and biotech firms
apply for a listing. They believe that Hong
Kong may even benefit from the ongoing
trade dispute between the US and China as it
could discourage mainland companies from
listing in the US. Charles Li Xiaojia, CEO
of the HKEX, said he expects over a dozen
technology companies to list in Hong Kong
this year under the new dual-class share
structure rule.  Demonstrating the resiliency
of Hong Kong›s IPO market, China Tower,
the world’s biggest operator of mobile phone
towers, raised US$6.9 billion on the Hong
Kong exchange making it the largest IPO
in two years at a time when the market was
down about 14 percent from its January
peak. Additionally, Sinochem Energy, a unit
of state-owned Sinochem Group Co Ltd,
filed for a US$2 billion Hong Kong IPO at
the end of July.
chinEsE Unicorns To
chanGE honG KonG’s
capiTaL MarKETs
Rapidly expanding tech start-ups are the
future of China, driving innovation and
fueling the country’s growth while obtain-
ing record speed success. In China it takes
an average of four years to go from gesta-
tion to unicorn status, according to Boston
Consulting. Even more impressive, 46 per-
cent of Chinese firms broke through the
US$1 billion valuation in just two years from
launch. With many of these companies turn-
ing to the equity markets to support their
continued growth, the number of unicorns
seeking to tap the IPO market has become
an unprecedented phenomenon in global
capital markets. This historical trend is
www.stocknewsnow.com
expected to bring fundamental changes to
Hong Kong’s capital market. While the term
“unicorn” was coined in order to express
the rarity of a startup company valued at
over US$1 billion, they are getting more
common, especially in China where they
are being created at a much faster rate
than US counterparts. A joint study issued
by a Ministry of Science and Technology
affiliate and a Beijing-based consultancy
issued the  2017 China Unicorn Enterprise
Development Report which shows China has
164 unicorns, worth a combined US$628.4
billion and the number is growing expo-
nentially. In fact, China’s top 10 unicorns
all have individual valuations of more than
US$10 billion, which are sometimes referred
to as “super unicorns”. Furthermore, four
out of every 10 unicorns picked Hong Kong
as the preferred market for an IPO according
to a survey of 101 companies by PwC. Five
sectors account for 92 of the 164 Chinese
unicorns – e-commerce, internet finance,
health, cultural and entertainment and logis-
tics. Many of these unicorns are backed by
industry titans such as Alibaba and Tencent
Holdings. These start-ups have the advan-
tage of enjoying huge success in an unusually
short period of time due to a unique envi-
ronment of a vast and growing population
of internet users with high mobile penetra-
tion rate and mobile-first consumer habits.
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Subsequently, China’s e-commerce market
has grown to over a trillion-dollars.
Encouraged by President Xi Jinping call
for national, mass entrepreneurship in 2014,
China has created a vibrant start-up scene
supported by government policies such as
tax incentives and billions in start-up funds.
Venture capitalists are more than happy
to participate by investing billions as they
search for the next Baidu, Alibaba or Tencent
Holdings, known collectively at BAT.
Funding for start-ups in China in the first
half of this year topped 2016’s record  with
Chinese entrepreneurs raising a total of 368
billion yuan (US$54.1  billion),  according
Shanghai DZH. China’s fin-tech enterpris-
es received the majority funding, raising
around 230 billion yuan (US$35 billion),
with Ant Financial, Du Xiaoman Financial
and JD Finance (financial arms of Alibaba,
Baidu and  JD.com  Inc. respectively) raising
about 120 billion yuan in total. Additionally,
China has become a top destination of ven-
ture capital in sectors such as virtual reality,
autonomous vehicles, robotics, drones and
artificial intelligence.
The next multibillion dollar tech float
expected this year is Beijing-based Meituan
Dianping who is aiming for a US$60 billion
valuation in its initial public offering, in
what could be one of the most highly valued
listings for a Chinese technology company
in 2018. The company has become China’s
biggest online-offline services group where
consumers can order food, check for reviews
for restaurants and bars, rent bikes, book
hotels or purchase movie tickets, all on one
mobile app.
Growing Pipeline of
Biotech Firms Seeking HK
IPO
China’s Biotech is an industry that’s explod-
ing, yet still in its infancy.
With pre-revenue biotechnology firms
allowed to list for the first time, the Hong
Kong Exchange has received filings from
around 16 biotech firms pursuing IPOs this
year, seeking to raise upwards of US$3 bil-
lion. Through the Shanghai and Shenzhen
stock links, mainland investors can also
buy shares of Chinese biotech companies
listed in Hong Kong.
China’s pharmaceutical sector has long
been dominated by low-cost generic medica-
tions, with little focus on developing innova-
tive products. While annual spending on
prescription medicines has crossed US$100
billion in China as diseases typically associ-
ated with the western lifestyle are on the rise,
the country is facing significant unmet med-
ical needs, particularly in cancer, neurology
and diabetes, along with a rapidly ageing
MicroCap Review Magazine 73
population.    In an effort to improve the
country’s healthcare and medical services,
China is executing a comprehensive strategy
to accelerate the development of new drugs
and therapeutics with the intention to grow
the biotech sector to over four percent of
GDP by 2020. The country is building 10-20
science parks for biomedicine where it will
incubate national and global champions by
helping them gain leading technologies and
expanding their commercial capabilities. They
are also investing in graduating large num-
bers of university-trained Chinese scientists.
The government is particularly interested
in seeing smaller, innovative biotech com-
panies emerge and has made biotech along
with other innovative businesses eligible
for greater government backing. They are
streamlining regulatory procedures for new
drug approvals and expediting the addi-
tion of new and more effective drugs to
the approved list for public hospitals to get
reimbursement under the state health care
insurance scheme.  With the new measures
to speed up new drug approval, pharmaceu-
tical sales are expected to grow by 15 percent
from 2019 to 2021. Overall, China›s biolog-
ics industry is forecasted to double in size
to US$52 billion by 2021 compared with a
global growth rate of 60 percent, according
to JP Morgan.
At the end of July, Ascletis Pharma, a maker
of HIV and liver-cancer drugs was the first
pre-revenue biotechnology firm to complete
its IPO in Hong Kong under the new listing
rules.  The company raised US$400 million,
making it the largest biotech IPO in terms
of dollars raised and valuing the company
at US$2 billion. The IPO was widely seen
as a test for the new biotech sector as a gold
rush is expected in Hong Kong with fund
raising shifting into overdrive. However, the
company struggled in its first week of trad-
ing with the Hong Kong market down 3.9
percent for the week as market sentiment
continued to deteriorate due to escalating
trade tensions between China and the US.
Additionally, Chinese drug stocks have been
under pressure in Asia as a result of an ongo-
74 MicroCap Review Magazine
ing scare about the safety of pediatric vac-
cines in China. Despite the company’s rocky
start, industry professionals remain confident
that Hong Kong will become a top listing
destination for mainland biotechnology com-
panies. Following Ascletic Pharma’s listing,
NASDAQ-listed biotech, BeiGene, also com-
pleted its secondary listing on the HKEX rais-
ing just over $900 million, near the top of its
range but under the $1 billion target.
With strong optimism, a string of Chinese
life science companies continue to file for
IPOs. Earlier this year, Chinese biotechs,
Innovent Biologics and Ascentage Pharma,
canceled plans to list in New York choosing
instead to list in Hong Kong. Ascentage with
a focus on therapeutics for cancers, hepatitis
B and aging-related diseases is targeting to
raise up to $300 million. While Suzhou-
based Innovent, which is backed by Fidelity
and Singapore state investor Temasek, is
looking to raise between US$300 million
and US$500 million in its Hong Kong
IPO. Tianjin-based Tasly Pharmaceutical
Group is planning to list its biopharma unit,
Shanghai Tasly Pharmaceutical, in Hong
Kong as it is targeting to raise about US$1
billion, which could make it the largest funds
raised for a biotech. Other biotech compa-
nies in the queue include Shanghai Henlius
Biotech, a subsidiary of Shanghai Fosun
Pharmaceutical, U.S.-based cancer detec-
tion start-up Grail and CanSino Biologics, a
Chinese developer of vaccines. JHL Biotech
Inc, a Taiwan developer of low priced bio-
similar therapeutics, which delisted from
the Taiwan Exchange in February, plans to
relist in Hong Kong stating Hong Kong will
provide higher trading liquidity and better
valuation for its shares enabling it to raise
funds for its expansion plans.
While biotech companies are eager to join
the Hong Kong exchange, some profession-
als question if Asian investors are adequately
able to cope with the complexities of biotech
sector investing, especially pre-revenue com-
panies.  Hong Kong has long been dominated
by traditional companies such as Chinese
state firms, financial and property groups
which make up around 60 percent of the
Hang Seng Index. Traditionally, the Hong
Kong market pays a lot of attention to earn-
ings and market size and lacks experience
evaluating firms before they start recording
earnings.   As Asia’s biotechnology industry
is in its infancy, analysts and investors in the
region have little experience or knowledge
in analyzing early-stage drug firms with no
profits, revenues or cash flow. Specifically,
having to predict and make decisions about
the future success of drugs that are not yet
approved by regulators and market potential
can be challenging for inexperienced analysts
and bankers. Subsequently, global banks
are under pressure to hire biotech experts
to cover the new listing in Hong Kong. Still
many companies believe that while it may
take time for Hong Kong to build expertise,
its links to mainland China could help out-
weigh the shortcomings. In the meantime, the
combination of a stream of new biotech list-
ings and Asian investors adjusting to valuing
pre-revenue biotech companies could create
an opportunity to find undervalued biotech
companies in Hong Kong. n
Ms. Leslie Richardson has over 20 years of investment
management and equity research experience. She oper-
ates a boutique investor relations firm in Hong Kong
for Asian companies listed in the U.S. and Hong Kong.
She also assists private companies develop investment
material and build an investor following in prepara-
tion for a public listing. Additionally, she is the Asian
Correspondent for Micro-Cap Review, www.microcap-
review.com, a financial magazine focused on mirco-cap
companies. Previously, she worked for CCG Elite in
assisting Asian-based, U.S. listed clients formulate key
communication strategies. Ms. 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
energy, IT and telecommunications. She earned her
M.B.A. from the University of Southern California. Ms.
Richardson is based in Hong Kong.
www.elite-ir.com.
Note: This article is not an attempt to provide
investment advice. The content is purely the author’s
personal opinions and should not be considered
advice of any kind. Investors are advised to conduct
their own research or seek the advice of a registered
investment professional. The author does not own
shares or any equity or debt interest in any companies
mentioned in this article before or at its publishing.
www.stocknewsnow.com
www.stocknewsnow.com MicroCap Review Magazine 75
 P R O F I L E D C O M PA N Y csE: cYBx / oTcQB: cYBxF

hilltop cybersecurity, inc.

H
illtop Cybersecurity, Inc(CYBX) icant sales from other companies adoption
is a software company focused on and re-distribution of our core products.
creating products which are spe- We are differentiated in that we are prod-
cifically for cybersecurity and the security of uct focused unlike many “cyber-security”
cryptocurrency.    firms and our goal is to not only protect our
The company is disruptive in that it has customers but also to reduce their depen-
patents regarding threat orchestration, cryp- dency on outside services firms.   We want
tocurrency storage and cyber-enabled proj- our customers to do a better job keeping
ect management.  The products were cre- themselves safe in Cyberspace with the lim-
ated by a seasoned team of ex-military and ited budgets and personnel that they have,
intelligence professionals with a focus on to do the job.  
the small and medium business enterprise.  The company has 3 patents, one that is
Because of the complexity and depth of the issued 2 that are pending and continues
software it has taken the company over 3 to work on innovation.  The products are
years of development to mature the product built with maximum interoperability and
portfolio to launch in the market.  open standards where possible to ensure and
The cyber-security market is estimated which most customers can use in their secu-
to approach 170 Billion by 2020 *, however, cyber-vulnerability of the businesses which rity plan. CYBX uses blockchain in order to
there are some sources that put the total deploy them.   make security logs immutable because it is
cost at closer to 1 Trillion and increasing.   CYBX management has held roles in the best way to make this particular aspect
Regardless of which figures are accurate the companies such as Informatica, NIKU, of the application safe not because it is the
cyber-war will be fought on the battlefield Department of Treasury, UPS, SAP, and flavor of the day like many firm. n
of businesses not like a traditional war.   others.   
Cryptocurrency further accelerates the risk Our channel partners include company For more information, please visit:
because of the ability to steal large sums like Guardsight an MSSP, Twin-Soft a resell- www.hilltopcybersecurity.com
of money effortlessly and quickly relative er in MENA and others.   Our strategy is to
to physical currency, an example being the focus on building the market’s best cyberse-
compromise in Japan wherein a hacker stole curity products and work with other firms
over 500M USD worth of Bitcoin.   that focus on sales and marketing thereby
CYBX has three primary products, becoming complementary to other cyber
CyberEPM, Vauban, and CryptoKEEP.  Each products and initiatives. There are several
product has a specific role in protecting a “white-label” distribution deals being dis-
customer and each is designed to reduce the cussed and we feel that we should see signif-

CYBX has three primary products, CyberEPM, Vauban, and CryptoKEEP.

Each product has a specific role in protecting a customer and each is designed
to reduce the cyber-vulnerability of the businesses which deploy them.

76 MicroCap Review Magazine www.stocknewsnow.com

www.stocknewsnow.com MicroCap Review Magazine 77
 F E AT UR E D A RT ICL E
Harnessing Regulatory Initiatives & Targeted
Rulemaking to Improve Transparency and
Further Market Efficiency
O ver the past 10 years, the reputation and recognition of the OTCQX
Best Market and OTCQB Venture Market has grown.
This positive transformation, stemming
from our technology platform driving great-
er market transparency, coupled with the
competitive evolution of our broker-dealer
community, has fostered vibrant, data-driv-
en, electronic public markets. The improved
standards we have implemented have led
regulators to recognize the important role of
our OTCQX and OTCQB markets in foster-
ing efficient secondary trading for public
companies. Based on the price transparency
and current public information available for
free on our website, these markets are rec-
ognized by the SEC as “Established Public
Markets” and have Blue Sky secondary trad-
ing exemptions in 30 states.
Of course, we see regulatory recognitions
and rule modernizations that support capital
formation as a core practice in providing
effective and efficient secondary markets
for public companies. Through constructive
dialogue with regulators, and the submission
n BY CROMWELL COULSON
78 MicroCap Review Magazine
of comment letters and rule proposals, we
continue the conversations to achieve regu-
latory streamlining and targeted rulemaking
that will increase transparency and improve
market efficiency.
In March 2018, I participated in the SEC
Investor Advisory Committee (IAC) featured
panel “Discussion of Regulatory Approaches
to Combat Retail Investor Fraud.” This public
platform provided an opportunity to share my
thoughts and insights on how regulators can
improve retail investor protection while low-
ering the barriers to capital formation.
In conjunction with the panel, OTC
Markets submitted a series of regulatory
recommendations which underscore the
need to increase disclosure and drive further
transparency.
The team at OTC Markets proactively
advocates on behalf of our issuers, the bro-
ker-dealer community, the investing public
and the stakeholders we serve. We continue
to engage regulators and lawmakers on how
to improve our public markets by updating
restrictive and outdated regulations, driven
by our belief that there needs to be a more
holistic approach to targeted rulemaking and
related legislation
For the remainder of 2018, we are focused
on the following initiatives:
BLUE sKY ExEMpTions
State Blue Sky laws impact all companies
trading on our markets. Over the past two
years, we have worked with state regulators
towards achieving our goal of nationwide
Blue Sky recognition for our OTCQX and
OTCQB markets.
As of June 2018, we have achieved second-
ary trading exemptions in 30 states – with
27 states recognizing both the OTCQX and
OTCQB markets and 3 states solely recogniz-
ing the OTCQX market. Each state adopted
a tailored approach to granting these exemp-
tions, using no-action letters, rule changes,
administrative orders and existing statutory
exemptions.
JoBs acT onLinE capiTaL
raisinG
We believe that the future of capital raising
is online, and we support changes to make
the JOBS Act more efficient and accessible.
Regulation A+ allows small companies to
raise up to $50 million online, transparently
and directly from the public without the
extensive cost burden of a full SEC public
offering. However, the SEC initially did not
allow SEC reporting companies to raise capi-
tal through Regulation A+.
In 2016, we filed a Rulemaking Petition
with the SEC, advocating that SEC report-
ing companies be permitted to conduct an
online public offering under Regulation A+.
Experienced reporting companies with com-
prehensive disclosure and investor relations
processes in place are ideal candidates to use
Reg A+.
www.stocknewsnow.com
 In 2017, the House of Representatives
passed the Improving Access to Capital Act,
based in large part on our SEC Petition for
Rulemaking. On May 24, 2018 the Economic
Growth, Regulatory Relief, and Consumer
Protection Act (S. 2155) was enacted into
law-- Section 508 of the bill incorporated
the Improving Access to Capital Act. As a
result of this key legislation, SEC reporting
companies are now eligible to raise capital
under Regulation A+.
We will continue to support other legisla-
tive proposals aimed at strengthening the
JOBS Act.
Regulations Impacting
Small Public Companies:
Margin Eligibility and
ESOPs
Our modernization efforts often target
decades-old regulations that were adopted
during a time when OTC trading was con-
ducted via printed quotes and phone calls,
and company information was scarce. Our
markets have changed dramatically since the
pre-internet days, and outdated laws now
impose unnecessary restrictions on small
company capital formation and limit the
value of investors’ holdings in these com-
panies.
We are working with lawmakers to
adopt common-sense legislative amend-
ments that would allow qualified securities
on our markets to become margin-eligible.
Updating these rules would allow sharehold-
ers to access additional value by borrowing
against their holdings and would have a
direct impact on the issuer’s ability to raise
additional capital. Access to sensible mar-
gin financing allows long-term investors to
continue to hold securities in established
companies and community banks.
Employee share ownership is a great way
for companies to build stable investor bases
and better align interests of employees and
shareholders. We also want to see a more
efficient pathway for OTCQX and OTCQB
issuers to offer Employee Stock Ownership
www.stocknewsnow.com
Plans (known as “ESOPs”) to their employ-
ees. Current IRS regulations force public
companies quoted on our premium OTCQX
and OTCQB markets to treat their stock as
“private” for ESOP purposes. As a result,
despite having a publicly-quoted price that
is recognized as a Level 1 price source by
the Financial Accounting Standards Board
(FASB), current regulations require OTCQX
and OTCQB companies to use an inde-
pendent appraisal to establish the value of
their securities. The cost and risk involved
ultimately deters many smaller public com-
panies on our markets from offering ESOPs
to their employees.
A robust roster of 72 established U.S.
companies* trade on our OTCQX Premier
market, with an aggregate market capitaliza-
tion of over $8.7 billion and employing over
20,000 employees. These companies and
their employees should not be prohibited
from accessing these benefits that come with
being a public company, simply because they
are not listed on an exchange.
Investor Protection: Stock
Promotion and Share
Ownership Disclosure
Our transparency-focused mission to
improve market efficiency closely ties to our
ongoing efforts to combat securities fraud.
We recognize the damage that can be created
by fraudulent “pump-and-dump” schemes
and other manipulative activities involv-
ing anonymous paid stock promotion. In
our experience, disclosure and transparency
most effectively combat and deter fraudulent
activities in the public markets.
In 2006, OTC Markets Group submitted
a Rulemaking Petition to the SEC seeking to
increase disclosure obligations for paid stock
promotion activities under Section 17(b) of
the Securities Act, including disclosure of
the parties paying for the promotion and
the amount of such payments. Our recent
submission to the SEC’s Investor Advisory
Committee reiterates this proposal.
Similarly, we continue to champion
increased regulation and disclosure require-
ments for transfer agents, company affiliates
and insiders. Bringing greater transparency
to the share ownership and transfer history
would go a long way to deter bad actors.
These achievements underscore our con-
tinued commitment to engage regulators and
lawmakers. As we continue to push ahead
with these policy initiatives, we encourage
issuers, investors, advisors, regulators and
other market participants to contact us to
explore how you can help.
(* Data as of April 18, 2018) n
R. Cromwell Coulson - President, Chief Executive
Officer and Director of OTC Markets Group 
R. Cromwell Coulson is President, Chief Executive
Officer and Director of OTC Markets Group, Inc.
responsible for the company’s overall growth and
strategic direction. Since acquiring OTC Markets’
predecessor business in 1997, Cromwell has trans-
formed the company from a privately-held publisher
of broker-dealer quotations into a publicly-traded
company operating three public markets for 10,000
U.S. and global securities. Cromwell is a strong advo-
cate of efficient public markets, improving access to
capital for small companies, supporting a diverse
ecosystem of broker-dealers, and empowering
investors with information.  He has testified before
Congress and spoken on these and other issues
at numerous industry conferences. Prior to OTC
Markets, Cromwell was an institutional trader and
portfolio manager at Carr Securities Corporation.
He holds an OPM from Harvard Business School
and received his BBA from Southern Methodist
University.  Cromwell is Chairman of the FINRA
Market Regulation Committee that advises FINRA
on rulemaking and trading issues.
About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) oper-
ates the OTCQX® Best Market, the OTCQB® Venture
Market and the Pink® Open Market for 10,000 U.S.
and global securities. Through OTC Link® ATS and
OTC Link ECN, we connect a diverse network of
broker-dealers that provide liquidity and execution
services. We enable investors to easily trade through
the broker of their choice and empower companies
to improve the quality of information available for
investors.
To learn more about how we create better
informed and more efficient markets, visit www.
otcmarkets.com.
OTC Link ATS and OTC Link ECN are operated
by OTC Link LLC, member FINRA/SIPC and SEC
regulated ATS.
Subscribe to the OTC Markets RSS Feed
For more information please visit:
www.otcmarkets.com
MicroCap Review Magazine 79
 F E AT U R E D A RT I C L E
Digital Currency 101
Key Considerations to Help You Lay the Groundwork for Success
W
hile regulatory and accounting
uncertainties remain, under-
standing critical aspects of the
rapidly evolving digital currency landscape
before you invest will help keep your busi-
ness compliant.
WhaT shoULd i KEEp in Mind
WhEn iT coMEs To accoUnT-
inG For diGiTaL cUrrEncY?
There’s no one-size-fits-all approach when
it comes to accounting for digital curren-
cy. The lack of guidance under generally
accepted accounting principles in the United
n BY ROBERT GRAHAM, CPA
AND JOSHUA SANTOS, CPA
80 MicroCap Review Magazine
States (“US GAAP”) makes it challenging to
navigate without the ongoing support of an
advisor. Companies investing in or holding
digital currencies in their business must
resort to applying existing GAAP by analogy
to their digital currency transactions. This
indirect approach is both time consuming
and mentally taxing when trying to under-
stand the underlying transaction to select
the appropriate accounting treatment. A key
consideration is whether to measure digital
currencies at fair market value or historical
cost for financial statement presentation.
considEraTions For MEa-
sUrinG YoUr diGiTaL cUr-
rEnciEs aT Fair MarKET
VaLUE:
• Entities who qualify as investment
companies will be required to record
digital currencies at fair value. This
can be challenging considering there
is no active clearinghouse or regu-
lated exchange. As such, there are
varying market prices across multiple
markets at any one point in time.
• Under the fair value framework, con-
sider if there are markets that are
regarded as having active trading
volumes for estimation of fair value.
This may be challenging for newer or
less popular digital currencies.
• Your company will need to develop
accounting policies in accordance
with GAAP to identify a principal
market to value digital currency
transactions. Keep in mind that there
is no formal closing price in the digi-
tal currency markets as they typically
trade 24 hours a day 7 days a week.
KEY dETaiLs For MEasUrinG
YoUr diGiTaL cUrrEnciEs aT
hisToricaL cosT:
• You may conclude that it’s necessary
to report digital currencies at cost
in accordance with existing GAAP.
Tracking the historical cost of invest-
ments in digital currencies can be
complex. For example, an entity could
directly exchange bitcoin for ethe-
reum with a counterparty and there
would not be a fiat currency to bench-
mark the transaction price.
• Tracking historical trades can be a
time consuming process depending
on the technical resources available
and whether the company is engaging
third party specialists that can extract
trading data efficiently and accurately
from digital currency exchanges.
WhaT shoULd MY coMpanY
considEr WhEn dEVELopinG
accoUnTinG poLiciEs?
Knowing which questions to ask will help
keep your company compliant. Be sure to
consider the following:
• You’ll want to address significant
events including hard forks and air
drops. A “hard fork” is a dramatic
change to the protocol that validates
or invalidates previous transactions.
An “air drop” is the process under
which cryptocurrency enterprises
distribute digital currency to users’
wallets free of charge. For example,
www.stocknewsnow.com
 a hard fork occurred on August 1,
2017 when the bitcoin network was
modified so that certain participants
continued using a pre-modified soft-
ware which continued as the bitcoin
network and other participants began
using a modified network known as
the bitcoin cash network.
• Following a hard fork or air drop
such as the bitcoin network, holders
of the digital currency tokens typi-
cally receive a new token simply as a
result of holding the original digital
currency.
• Financial statement classification of
digital currencies will depend on how
your company employs digital cur-
rencies. You’ll need to explore digital
currencies as financial instruments,
inventory, intangible, assets, etc. to
determine what works best for your
organization’s financial statements.
What details should I be
aware of when it comes to
planning for income tax
for digital currencies?
Many traders use multiple exchanges to
trade and move digital currencies. Come
tax time, this can complicate record keep-
ing. There are plenty of websites available
that allow traders to import trading activity
directly from the exchanges they use, and
traders can download a tax form directly
from the website. It’s important traders keep
track of trading activity and the exchanges
they use to ensure returns are filed correctly.
The IRS was successful in collecting the
information from over 14,000 Coinbase.com
accounts in 2018 and appears to be keeping a
close eye on digital currency trading activity.
Laying the foundation for accurate reporting
will help you get tax season-ready and avoid
unwanted surprises. For tax purposes, you
should be aware of the following:
• In 2014, the IRS stated digital cur-
rencies are treated as property for
United States federal tax purposes.
www.stocknewsnow.com
Therefore, general rules for property
transactions apply.
• Companies who pay contractors or
service providers in digital currency
should issue Form 1099 for the value
of digital currency paid for values in
excess of $600.
• The character of gain or loss from the
sale or exchange of a digital currency
depends on whether it is a capital
asset in the hands of the taxpayer.
However, digital currency trading
activity does not qualify for like-kind
exchange treatment in the eyes of
the IRS. Therefore, most taxpayers
should pay capital gains taxes similar
to how they pay taxes on stock trad-
ing activity.
• In response to this emergence and
outdated guidance from the IRS, the
“AICPA Virtual Currency Task Force”
developed a list of frequently asked
tax questions and their suggested
answers to those questions.
• Accurate record keeping is crucial.
Websites will only use the informa-
tion downloaded or manually added
and it is rare that websites provide a
complete tax form without manual
input and possibly manipulating the
information.
What safeguarding tips
should I keep in mind? tax and business consulting needs of public and
“As with any fast-paced, emerging technol-
ogy security gaps form. Hackers and mali-
cious actors are constantly looking for new
ways to gain access and steal virtual assets.
There are certainly best practices that you
can add to your toolbox, including hardware
wallets and two-factor authentication; how-
ever, there is no singular step and repeat pro-
cess. Cyber security in the digital currency
space requires ongoing monitoring from
expert advisors who understand your busi-
ness’s unique needs given a myriad of factors
from your industry to your overall business
structure,” says Jacob Lehmann, Managing
Director of Friedman CyZen. If you are
interested in learning more about how you
can get cyber-ready before you invest in digi-
tal currency, contact Jacob at JLehmann@
friedmancyzen.com or 212-897-6422.
If your company is contemplating using
or investing in digital currencies, you should
engage knowledgeable professionals in the
industry to help you navigate the regulatory,
cyber security, legal and accounting land-
scapes as they continue evolving. n
About Robert Graham:
Robert Graham, a partner at Friedman LLP, is
the Firm’s Digital Currency Practice Leader. He
has over 10 years of experience serving clients in
a range of industries, including digital currency/
fintech, telecommunications and technology, con-
sumer & industrial products and life sciences. Bob
specializes in helping private companies go public.
Robert has an extensive concentration in the digital
currency industry and has an in depth knowledge
of the accounting issues that companies in this
industry face. Robert also has developed expertise in
the issues private companies face as they go public.
This includes analyzing complex equity instruments
involving preferred stock, convertible debt, war-
rants, share-based compensation and other financial
instruments.
About Joshua Santos:
Joshua Santos specializes in providing audit, tax and
accounting services to clients in the Digital Currency
industry at Friedman LLP.  Joshua helps clients with
the adoption of complex accounting policies and
supervises audit, review and compilation engage-
ments, culminating in the issuance of financial
statements, and prepares corporate, partnership and
individual tax returns.
About Friedman LLP:
Friedman LLP has been serving the accounting,
private companies since 1924. Our industry-focused
practice features concentrated areas of expertise and
understanding of the economic environment. We
have the ability to be innovative in our approach, act
quickly in our decision-making and be flexible in our
delivery of services. Our clients have the advantage of
working with a mid-size accounting firm that com-
bines the staff and resources of a large firm with a
philosophy of personal responsibility for our clients.
For more information please visit:
www.friedmanllp.com
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 81
 FEAT UR E D A RT ICL E
Communication Pitfalls
in the Crypto Era
I
n my legal career, I have represented, and continue to represent,
principals of many companies who were not born in the U.S., and
who are sometimes difficult to understand when they speak, or when
they or their advisors write letters, emails or, especially, documents.
I’ve been involved with, and completed
transactions, with companies whose CEOs
speak Korean, Turkish, French, Chinese,
Portuguese, Spanish, Italian, German,
Hebrew, and more. And, sometimes, to
be clear, those foreigners might even be
English-speaking all of their lives.
For example, many years ago, when
involved in a reverse merger with a London-
based company, at a time when there was
a misunderstanding about an accounting
issue, that company’s CEO, a born and raised
Brit, said to me, which I have repeated many
times, “John, we are divided by a common
language.”
So, understanding what is said by others
to you, and by you to others in a financial
transaction, is critically important. And
that’s true in all walks of life, which reminds
me of a true event that took place many years
ago, about not understanding one another:
I was raised in suburban New Jersey,
before sushi became people’s favorite Asian
food, when Sunday night was family dinner
night at one’s favorite restaurant. So, my
cousin told me what happened this par-
ticular night, when his family went to their
favorite Chinese restaurant. He (I’ll call him
Robert, because that’s his name) was sitting
n BY JOHN LOWY, Esq. at the table with his parents when his sister
82 MicroCap Review Magazine
said, “Did you see the people at the others
tables? I saw the Goldbergs, the Bernsteins,
the Sternheims and the Pearlsteins.” (brief
quiz: guess my religion). “It’s amazing”, she
said, “A Chinese restaurant can’t survive
around here without us Jews.”
Her brother Robert readily agreed, and
then speculated out loud, “Hey, I wonder if
a Chinese restaurant can survive in China
without Jews as customers.” His conjecture
was met with approbation from his family,
and a suggestion that he explore the ques-
tion further.
Not having access to Google (it was the
1960’s), he called the waiter over and asked,
him “Tell me young man, are there Chinese
Jews?” The waiter appeared somewhat con-
fused, paused for a moment as if trying to
grasp the meaning of what he was asked, and
then said, “I will ask the owner.” They then
watched the waiter have an animated con-
versation with the restaurant owner, before
he returned to the table where my aunt,
uncle and two cousins were seated.
As the waiter was standing near him,
Robert then asked the waiter, “So, what did
the owner say? Are there Chinese Jews?” To
which the waiter confidently replied, “The
owner says there are no Chinese Jews, only
apple juice and tomato juice.”
www.stocknewsnow.com

The moral of the story (assuming that this true
story has a moral), is that it’s extremely important
to make yourself clearly understood, in both
written and oral presentations, that you clearly
understand what is said to you or written to you,
and, that each speaker/writer acknowledge that
they understand the other.
The moral of the story (assuming that this
true story has a moral), is that it’s extremely
important to make yourself clearly under-
stood, in both written and oral presenta-
tions, that you clearly understand what is
said to you or written to you, and, that
each speaker/writer acknowledge that they
understand the other.
Here’s another true story about how lan-
guage—or (in this case) the lack of it—can
be decisive. It also happened a long time ago,
when my friend Steve (in this case, not his
real name), had a serious regulatory prob-
lem: dozens (maybe hundreds, I don’t recall)
of unpaid New York City parking tickets, for
which he was hauled into Court to appear
before a magistrate. The stakes were high—
my friend Steve was a professional (not an
attorney), who stood to possibly do jail time
as a scofflaw.
He and his attorney stood before the
Judge, who asked, “Counselor, what, if any-
thing, is your client’s defense to his many
unpaid parking tickets, stretching back
several years?” To which Steve’s attorney
replied, “Your Honor, m-m-y c-c-c-client
p-p-p-pleads n-n-not g-g-g-guilty, and w-w-
w-wants a t-t-t-trial n-n-now.” Steve had
intentionally retained an attorney with a
severe stutter.
The Judge looked over the courtroom,
packed with dozens of looming cases, and
realized that a trial with this attorney would
be a monumental time-consuming disaster.
So, he quickly asked, “Counselor, how much
www.stocknewsnow.com
money did your client bring to Court today,
to extinguish these tickets and dismiss this
case?”
The attorney briefly consulted with Steve,
and then said, “Judge, my client has $700
with him, which he will deliver to the Court
if this case is dismissed with prejudice.”
It took the Judge a nanosecond (a period
of time which did not then exist), to bang
his gavel and shout, “Case dismissed, with
prejudice.”
But here’s the punchline: why did Steve
have his attorney tell the Judge that he had
$700 in his pocket (which he did, and which
he paid)? Why didn’t he say he had $200?
Or maybe $300? With his stuttering attorney
and an exasperated Judge, maybe as little
as even $100 and an apology, might have
worked?
Well, a few of his friends had told Steve
before his Court appearance that he was in
deep (to use the vernacular) ca-ca, and that
he would be convicted and end up wearing
stripes. He bet them, and they gave him 3-1
odds, that he wouldn’t go to jail. So, because
of his stuttering attorney, Steve’s $700 fine
turned into $2,100! (Maybe he should have
brought $5,000 to Court.)
Moral of the story: sometimes—even
when negotiating--less is more.
I hope you found these two true recollec-
tions about communicating amusing. But
what’s happening sometimes in the crypto-
currency world is not amusing, in fact, in
many cases it’s alarming. Here and there,
we see wannabe entrepreneurs trying to
raise capital, and sometimes succeeding, by
communicating to investors the flimsiest of
so-called businesses, which unfortunately
arouses the interest of the regulators, and
makes it more difficult for the real crypto
companies, of which there are many.
Some of these self-proclaimed cryptocur-
rency deals haven’t even reached the stage
of being pre-revenue; they are actually “pre-
startup,” an oxymoron; and many of them
should more accurately be called “craptocur-
rency” deals.
It’s up to you, the reader, to make an
informed decision whether to invest in—
or even consider investing in—a particular
cryptocurrency company. And what are
the important considerations? No surprise,
the usual: who are the principals—their
experience and reputation, in this sector and
others? Who is on their team—have they
assembled well-respected professionals? Is
this a credible business plan (even if pre-
revenue), or is it pre-startup?
All investors should remember that it’s not
what you make, it’s what you keep. n
John Lowy is the founder (in 1990) and senior part-
ner of John B. Lowy, P.C. www.johnlowylaw.com and
(in 1993) of Olympic Capital Group, Inc. www.ocg-
finance.com both based in New York City. John is a
highly-respected and acknowledged expert in reverse
mergers, representing public companies, capital for-
mation, strategic consulting and initial private and
public offerings of all types.
As an attorney, an advisor and principal, John has
led or participated in more than 200 such transac-
tions, creating market value in excess of $5 billion.
He has been instrumental in leading the process by
which these companies have raised capital or reverse
merged, and achieved listings on the NASDAQ or the
AMEX, or were sold to larger companies.
In addition to the U.S., John has completed trans-
actions for clients based in at least 15 foreign coun-
tries. The sectors in which his clients are engaged
range from low tech to high tech, cryptocurrency/
blockchain, real estate, pharmaceuticals, medical
devices, biotech, oil and gas, mining, renewable
energy, entertainment, food, agriculture, education
and retail, among others.
He received his undergraduate degree from Tufts
University and graduated from the University of
Pennsylvania Law School, and is a licensed attorney
in New York and New Jersey. He is a frequent con-
tributor to MicroCap Review.
MicroCap Review Magazine 83
84 MicroCap Review Magazine www.stocknewsnow.com
www.stocknewsnow.com MicroCap Review Magazine 85
 RESOURCES CORNER

Major Mining Companies Looking for

Quality Junior Assets

I
n this Wall Street View, our host caught
up with Brent Cook, Editor/Geologist
of Exploration Insights at the Sprott
Natural Resource Symposium 2018 in
Vancouver, BC.
Shelly Kraft: So, Brent, I want to start
off by asking you what’s going on in the
resource markets?
Brent Cook: Well, like much of the world
right now it’s pretty chaotic. Base metal pric-
es have been coming down rapidly the past
months since this whole tariff issue came
about. The stocks themselves are languish-
ing but looking further out I think what’s
important to keep in mind what I’m really
excited about is that we know the major
mining companies are not finding enough
new deposits enough new order place to put
their mining. Consider for every pound of
copper they produce if they don’t find one
they’re going out of business. So, that’s a
real key here is that we’re seeing these com-
panies start to go out and acquire assets,
quality assets and the junior mining sector
the ones that are finding them. All we’ve
got to do is own the right ones and identify
them because they’re real cheap right now
and wait for the take out and that’s going to
happen it is happening so I’m pretty excited.
Shelly Kraft: You know, we’ve known each
other a while and you predicted this event
taking place of the majors running out of
resource to mine, that’s consistent with
what you’ve said, now how does this affect
all the base metals if you would?
Brent Cook: Well, I think it may actually
put a squeeze on that metal prices if there’s
not enough supply. Certainly what it’s going
to do is make the deposits that are found, the
new deposits, much more valuable and we’re
seeing that right now with Lundin Mining
taking out Nevsun Mining for their project
in Serbia and Eritrea. We’ve seen a number
of instances this year where a major mining
company comes in and takes out a junior
company that has an asset that they feel is
worthwhile. So, we’re going to see that hap-
pening regardless of metal prices and in fact I
think metal prices being low like this is going
to instigate a lot of this acquisition activity.

n BY BRENT COOK,
INDEPENDENT EXPLORATION
ANALYST, GEOLOGIST

86 MicroCap Review Magazine www.stocknewsnow.com

Shelly Kraft: Is there an essence of looking
more closely at project generators or does
it matter, I mean, how do you pick the ones
that you want to talk about?
Brent Cook: It’s a long process, I mean,
I’ve got 30 odd years of geologic background.
I’ve been to 60 odd countries looked at hun-
dreds of deposits and projects. So, I’ve got
that experience so to me it’s number one it’s
the geology. Is the geology conducive to the
development of a major gold deposit? Once
we’re there, okay, how would you going to
take to actually find this? What how much
money is it going to take to prove or disprove
a concept? Is this management team capable
of doing it? Do they know how to not just
geologically but financially run a company?
So there’s a lot that has to go right and we’ve
made good money in the letter on stocks
that eventually failed because we recognized
something at this level this looks like it might
work. But as we follow the results we started
saying here’s an issue, here’s the fatal flaw.
The stock share price is up we sell out before
it collapses again. So, we’ve, you know, you
can make money both ways on a failure or a
success you just had to be very diligent.
Shelly Kraft: Does this give you an indica-
tion that there’s actually more value in an
exploration company today then there is
let’s say on a producer or a development
company?
Brent Cook: For a producer there is much
more value in the exploration companies
right now in terms of you know valuing
companies themself it comes down to you
know what’s their cash flow or the profitable
or not know what was their asset. So, that’s
individual.
Shelly Kraft: For exploration companies,
they’re drilling, and that’s money out the
door, and money is not coming in yet,
right?
Brent Cook: Right, that’s why you need
www.stocknewsnow.com
to be very, very careful that when you invest
in these companies, make sure what they’re
drilling the work they’re doing confirms
your thesis your investment thesis or geo-
logic concept, if it doesn’t just get the hell out
of there quick.
Shelly Kraft: Are exploration companies
able to raise money in this market? Have
that freed up a little bit?
Brent Cook: It’s been tight, it’s been very
tight, I mean, companies are doing it. But
again for the most part money is now going
to the better companies and the better peo-
ple a lot of the garbage, a lot of the low-grade
small whatever they’re not getting financed
and that’s positive too really.
Shelly Kraft: Is there a wave of mergers
and acquisitions coming?
Brent Cook: No, I don’t think there’s a
wave because there’s not that much quality
out there but the few that are the quality will
be acquired.
Shelly Kraft: So, when your investors are
reading your newsletter, what are they
looking for in particular - just to follow
what you’ve done as far as due diligence on
projects or is it something that they gain so
much information that they can compare
it to their own thoughts and their own
essence of their own research?
Brent Cook: That, you know, Joe
Mazumdar and I we write this together now
and that’s our long-term goal I mean we talk-
ed about we bought this talk because its XYZ
and we think this is going to happen, the
results come in and we like them, we don’t
like them. But we go through more than that
hoping to give them our subscribers insights
that they can use on their own when they’re
evaluating their own results a company com-
ing at to them and with a drill hole because
I recognize this from something that Brent
and Joe said and I can evaluate. That is our
ultimate goal and educating them as well.
Shelly Kraft: So, what would you say to some-
one who’s not a traditional metals investor?
Brent Cook: Be careful and buy my news-
letter. n
For more information about Brent Cook and Exploration
Insights, please visit: www.explorationinsights.com
Disclaimer
This letter/article is not intended to meet your specific
individual investment needs, and it is not tailored to
your personal financial situation. Nothing contained
herein constitutes, is intended, or deemed to be--either
implied or otherwise--investment advice. This letter/
article reflects the personal views and opinions of Brent
Cook and Joe Mazumdar, and that is all it purports
to be. While the information herein is believed to be
accurate and reliable, it is not guaranteed or implied
to be so. The information herein may not be complete
or correct; it is provided in good faith but without
any legal responsibility or obligation to provide future
updates. Research that was commissioned and paid for
by private, institutional clients is deemed to be outside
the scope of the newsletter, and certain companies that
may be discussed in the newsletter could have been
the subject of such private research projects done on
behalf of private institutional clients. Neither Brent
Cook, nor Joe Mazumdar, nor anyone else, accepts
any responsibility, or assumes any liability, whatsoever,
for any direct, indirect or consequential loss arising
from the use of the information in this letter/article.
The information contained herein is subject to change
without notice, may become outdated, and may not be
updated. The opinions are both time and market sensi-
tive. Brent Cook, Joe Mazumdar, and the entities that
they control, family, friends, employees, associates, and
others, may have positions in securities mentioned, or
discussed, in this letter/article. While every attempt is
made to avoid conflicts of interest, such conflicts do
arise from time to time. Whenever a conflict of interest
arises, every attempt is made to resolve such conflict in
the best possible interest of all parties, but you should
not assume that your interest would be placed ahead of
anyone else’s interest in the event of a conflict of inter-
est. No part of this letter/article may be reproduced,
copied, emailed, faxed, or distributed (in any form)
without the express written permission of Brent Cook
or Joe Mazumdar. Everything contained herein is sub-
ject to international copyright protection.
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 87
 GAMING CORNER
How to Play PASPA from Canada
onLinE GaMinG UpdaTE —
UniTEd sTaTEs
U
ntil recently, the Interstate Wire
Act of 1961, combined with the
Professional and Amateur Sport
Protection Act (PASPA) of 1992, prohibited
sports betting in the U.S. in all but four grand-
fathered states (Montana, Oregon, Nevada,
Delaware). Despite its illegal status, sports
betting has been a thriving underground busi-
ness, with the American Gaming Association
(AGA) estimating that in 2015, $149B was
wagered illegally on U.S. sports – the 2016
Super Bowl 50 alone attracted $4.1B in illegal
wagers, with only ~$100M placed legally.
In mid-May 2018, the U.S. Supreme Court
overturned PASPA in a decision that found
PASPA unconstitutional in a 7-2 decision.
What this means is it will be up to individual
states to decide whether to allow its residents
to bet on sports. Many are expected to move
quickly to establish sports betting as a means
to increase their respective coffers. We have
since seen a number of states pass legislation
to allow online gambling. We believe the U.S.
market will take 3-5 years to fully develop.
onLinE GaMinG UpdaTE —
canada
The legality of online betting in Canada is
currently a grey area. Provincial govern-
ments have a monopoly on gambling ser-
n BY RALPH GARCEA
88 MicroCap Review Magazine
vices, and civilians aren’t permitted to offer
or use private gambling services. At present,
the Canadian Criminal Code explicitly pro-
hibits Canadian civilians from marketing or
offering betting services to other Canadians.
Provincial governments are permitted to
offer a variety of gambling services, includ-
ing parlay betting on sports. In practice, the
vague nature of Canadian gambling laws and
the limited sports betting options offered
by provincial governments have resulted in
extensive online sports betting activity. It’s
estimated that Canadians bet over $2B with
offshore bookmakers every year.
Brian Masse, NDP MP of Windsor West,
tabled Bill C-221 in 2016 to repeal paragraph
207(4)(b) of the Criminal Code to make it law-
ful for the government of a province, or a person
or entity licensed by the Lieutenant Governor
in Council of that province, to conduct and
manage a lottery scheme in the province that
involves betting on a race or fight or on a single
sport event or athletic contest. Bill C-221 was
defeated on September 21, 2016; 156 “nay” votes
to 133 “yay” votes. We expect a revisit or a new
Bill to be tabled in due course in light of the
recent SCOTUS ruling on PASPA.
hoW To pLaY paspa FroM
canada
We believe the best way to play PASPA from
Canada is through the Stars Group (TSG-
US, Buy, US$43 PT) and Newgioco Group
(NWGI-US, Spec Buy, US$1.80 PT).
Sportsbook represents 50% of the global
online gambling market. The Stars Group
officially rolled out its sportsbook product,
BetStars, in a limited capacity in December
2015 in anticipation of the Euro 2016 soccer
competition. The sports betting product will
launch within the PokerStars poker client in
certain markets, and PokerStars will gradually
add more markets as well as web and mobile
versions over time. We think the CrownBet,
William Hill Australia and SkyBet acquisi-
tions are a meaningful expansion in this verti-
cal, with focus now on integration and growth
in their respective markets.
TSGI reported Q218 revenue of $412M
(EWP: $385M) (Cons: $381M), Adj. EBITDA
of $168M (EWP: $156M) (Cons: $152M),
and Adj. EPS of $0.60 (EWP: $0.56) (Cons:
$0.54). Its newly segmented International
and Australia divisions contributed $350M
and $61M, respectively, to revenue. Organic
growth in the Q was 15%. Consolidated Poker,
Casino and Sportsbook revenues in the quar-
ter were $217M, $102M, and $81M, respec-
tively. International and Australia quarterly
real-money active uniques (QAUs) were down
5.2%. 2018 guidance was updated including
the recent CrownBet, WMH Australia and
SkyBet acquisitions with 2018 revenue between
$1,995-2,145M (prev. $1,390-1,470M), Adj.
EBITDA between $755-810M (prev. $625-
650M), and Adj. EPS between $1.99-2.22
(prev. $2.33-2.47). International net deposits
were $322M in the quarter, an increase of
19.3% y/y. If the three sportsbook acquisitions
were considered from the beginning of 2017,
the revenue mix by product would have been:
Poker (37%), Sportsbook (34%), and Casino
(26%), with 75% of 2017 revenues from locally
regulated or taxed markets.
TSGI is strategically evaluating opportuni-
ties to partner with various gaming opera-
tors and media companies in New Jersey
(extended existing poker/casino partnership
with Resorts Casino to launch an online and
mobile sportsbook in the near future) and
Pennsylvania (announced a partnership with
Mount Airy Casino Resort to offer betting
and gaming products subject to regulatory
approval). As the US market evolves, TSGI
will seek to secure leading market positions
by combining its expertise and brand aware-
ness with strategic focus on: (1) selectively
partnering with land based gaming operators
and/or lotteries in key U.S. states; (2) provid-
www.stocknewsnow.com
Exhibit 1 – What’s the current state of sports betting in the U.S.? Source: www.playusa.com; ESPN
ing a multi-vertical offering of poker, casino
and betting; and (3) following CMA approval
of the SkyBet acquisition, TSGI intends to
export to the U.S. SkyBet’s deep expertise with
respect to the integration of media and sports.
Newgioco engages in the operation of
licensed gaming, providing retail web-based
and land-based gaming services in Italy. The
Company offers online casino, sports betting,
virtual sports betting, horse racing, and physical
slots. The Company was founded on August 26,
1998, and is headquartered in Toronto, Canada,
with wholly owned subsidiaries in Italy and
Austria. Subsidiaries include: Multigioco Srl
(acquired on August 15, 2014), Rifa Srl (acquired
on January 1, 2015), as well as Ulisse Gmbh and
Odissea Betriebsinformatik Beratung Gmbh
(both acquired on July 1, 2016).
NWGI had a strong Q218 which included
15 days of the 2018 World Cup – Q218 rev-
enue was $8.8M, with adj. EBITDA of $1.1M
(excl. the non-cash derivative liability related
to the convertible debenture and share price
volatility through Q218). Non-GAAP betting
turnover in Q218 was $100M (+101.6% y/y),
and $190.6M (+86.3% y/y) for the H118.
NWGI is on track to exceed its 2018 pro-
jected turnover target of ~$300M. NWGI
has obtained final SOGEI certification just
in time for the start of the 2018/2019 Italian
soccer season. Odissea is now independently
connected to the regulator and completely
free from third party processing.
Several reasons why we like Newgioco are:
www.stocknewsnow.com
(1) NWGI currently has the 20th largest share
of the Italian online market – a tremendous
opportunity exists in rolling up smaller opera-
tors beneath it while staying under the radar
of the larger players. (2) With over 150,000
events per season and more than 90,000 events
in Live mode, Newgioco has a highly competi-
tive game offering for bets and sporting events
through its Odissea platform. (3) Newgioco’s
management team has a combined 100+ years’
experience in gaming and technology devel-
opment. An extensive network in the Italian
marketplace among operators and government
regulators should be beneficial as Newgioco
expands in the region and seeks opportunities
abroad. (4) Newgioco launched the first phase
of its Artificial Intelligence (AI) technology
on its ELYS Odissea gaming platform with
the release of CHATBOT – CHATBOT is an
AI betting technology using customized pat-
tern recognition and machine-learning algo-
rithms to determine the relevant features of
customer interactions and to develop a com-
prehensive customer betting profile. (5) We
expect Newgioco to start showing business-to-
business (B2B) revenue on white-labelling its
platform by the end of this year, and use it as a
vehicle for international expansion – including
the US sports betting market.
Is an Amendment to the
Federal Wire Act of 1961 Next?
Despite the PASPA ruling, it would still be illegal
to bet across state lines – even if the respective
states in question have legalized online sports-
betting. Evidence has shown that a high number
of gaming and gambling companies have used
blockchain technology to raise money and fund
startups. In total, more than $4B has been raised
via ICOs, according to Autonomous NEXT.
Business Insider reported a $500M ICO to build
a floating cryptocurrency casino in Macau.
Gambling with cryptocurrencies – as opposed
to fiat money – can currently be conducted
without the need to provide identification docu-
ments, or in some cases, without the need to
create an account. Demand for anonymous
gambling is evident in the relatively high use of
pre-paid cards – such as the paysafecard– on
gambling websites, and in consumer behaviour
surveys. What about setting up a blockchain
platform, to allow sports betting across state lines
via smart contracts between the bettor, operator
and respective states involved where betting is
legal and taxes are collected. We note that both
Stars Group and Newgioco have blockchain and
AI capabilities already in place. n
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. The author does not own
shares or any equity or debt interest in any companies
mentioned in this article before or at its publishing.
MicroCap Review Magazine 89
 F EAT UR E D ARTICL E
TSX Venture Exchange Update
T he beauty of venture stage investing is that we are supporting
companies that are in the early stages of their journey.
Whether it’s developing a new mine, permit-
ting a marijuana cultivation facility, com-
mercializing technology or developing a new
pharmaceutical, these are companies that
have step function valuation changes tied to
achieving milestones.
These businesses raise money to finance a
drill program, which either helps prove out
a resource or doesn’t.
These businesses raise money to finance
the next phase of clinical studies, which
proves efficacy of a new drug or doesn’t.
These businesses raise money to finance
the build out of a cannabis cultivation facil-
ity, which will receive a license from Health
Canada and enter production or not.
In any scenario, venture stage companies
are pursuing milestones which result in step
function valuation increases.
Generally speaking, there are two mecha-
nisms of facilitating this growth - private
venture capital, modeled after Silicon Valley
where companies receive large rounds of
capital to grow privately, with the hope that
the company may turn into a success by
either being acquired or undertaking a high
profile IPO; or public venture capital - what
we deliver through TSX Venture Exchange
(TSXV).
The public venture capital model is built
on individual retail investors, family offices
and small cap funds with a risk appetite for
participating in the potential growth of a
new business. Canada’s unique two-tiered
capital markets, consisting of public venture
capital on TSXV combined with a stream-
lined ability to graduate to the senior TSX,
n BY BRADY FLETCHER has truly evolved into a leading platform
financing and supporting the growth of
90 MicroCap Review Magazine
companies. Since 2000, over 650 companies
have graduated from TSXV to TSX, now
constituting almost one fifth of the S&P/TSX
Composite Index. A study conducted by the
Haskayne School of Business demonstrated
that graduations from TSXV to TSX exhib-
ited positive long-run, buy and hold abnor-
mal returns, outperforming private venture
capital—backed IPOs by 31.2% in the three
years following listing.
Every year we recognize those companies
that are growing with us by leveraging public
venture capital with our Venture 50 Awards.
These awards recognize the top 10 com-
panies in five industry groupings based on
equal weightings of share price appreciation,
market capitalization growth and liquidity in
the previous year.
For the 2018 winners, we saw an average
share price appreciation of 279% and market
capitalization growth of 631%. By evaluating
companies on both share price and market
capitalization, we recognize those companies
that are using publicly quoted share currency
to raise capital or make acquisitions - result-
ing in new share issuances.
Increasingly, the momentum demonstrat-
ed by companies listed on TSXV with over
$4.8 billion raised by TSXV listed companies
in 2018, as of July 31, has driven strong new
listing activity, with 120 new listings in the
same period. Current market statistics for
TSX and TSXV can be found in our MiG
Reports here: www.tsx.com/mig
In addition, international issuers are now
recognizing the value of accessing public
venture capital through TSX and TSXV.
www.stocknewsnow.com
2018 Venture 50 Winners
cleantech & Life sciences Technology diversified industries Energy & Energy services Mining

Emerald Health Reliq Health Technologies Radient Technologies Inc.° GEN III Oil Corporation Garibaldi Resources Corp.
Therapeutics, Inc.° (EMH) Inc.° (RHT) (RTI) (GIII) † (GGI)

Cronos Group Inc.° * Identillect Technologies Mission Ready Services PetroShale Inc. (PSH) Novo Resources Corp.
(CRON) Corp. (ID) Inc.° (MRS) (NVO)

Revive Therapeutics Ltd.° Millennial Esports Corp.° Hempco Food and Fiber Molori Energy Inc.° (MOL) Metallis Resources Inc.°
(RVV) (GAME) Inc.° (HEMP) (MTS)

VentriPoint Diagnostics BTL Group Ltd.° (BTL) StorageVault Canada Inc.° SDX Energy Inc. (SDX) First Cobalt Corp. (FCC)
Ltd.° (VPT) (SVI)

PyroGenesis Canada Inc.° NexOptic Technology Uniserve Communications Renaissance Oil Corp. Standard Lithium Ltd.
(PYR) Corp. (NXO) Corporation (USS) (ROE) (SLL)

Lexagene Holdings Inc.° AnalytixInsight Inc. (ALY) Wellness Lifestyles Inc.° Questor Technology Inc. Liberty One Lithium Corp.
(LXG) (WELL) (QST) (LBY)

BlueOcean NutraSciences NYX Gaming Group Grande West Pentanova Energy Corp. Wolfden Resources
Inc. (BOC) Limited* (NYX) Transportation Group Inc. (PNO) Corporation (WLF)
(BUS)

Xebec Adsorption Inc. Edgewater Wireless Perlite Canada Inc. (PCI) Seaway Energy Services Tinka Resources Limited
(XBC) Systems Inc. (YFI) Inc.° (SEW) (TK)

Aurora Solar Technologies Siyata Mobile Inc. (SIM) Imaflex Inc. (IFX) MATRRIX Energy Power Metals Corp. (PWM)
Inc.° (ACU) Technologies Inc.° (MXX)

NeutriSci International Inc.° Photon Control Inc.*** Quantum International Eco (Atlantic) Oil & Gas NRG Metals Inc. (NGZ)
(NU) (PHO) Income Corp. (QIC) Ltd.° (EOG)

° Went public via Capital Pool Company® Program †Number 1 company overall

*Cronos Group Inc. graduated to TSX in May 2018.

**NYX Gaming Group Limited was acquired by Scientific Games Corporation in January 2018.
***Photon Control Inc. graduated to TSX in May 2018.

A Computer Engineer by background, Brady spent

almost a decade in investment banking, primarily
focused on financing and advising technology and
diversified issuers through strategic transactions,
before leaving to found Coastr.
With Coastr, Brady successfully took a concept
through ideation, building a development team,
and launching the platform. We successfully sold a
network of almost 30 venues locally while using cus-
tomer feedback to drive iterative revisions to the app
and back-end platform.
Throughout his investment banking career, Brady
has advised hundreds of companies on business strat-
egy, capital raising, public and private markets, and
exit strategies – having successfully executed over
$500million in growth equity financings, secondary
transactions, and sell-side advisory mandates.
Brady joined TMX Group recently and is
Managing Director of TSX Venture, the world’s lead-
ing public venture capital marketplace.

www.tsx.com

Note: This article is not an attempt to provide invest-

Learn more about Canada’s two-tiered
markets and TSXV’s capital formation plat-
form, and listing requirements here. n
The views, opinions, and advice provided in this article
reflect those of the individual author and do not reflect
the opinions or views of, nor are they endorsed by,
TMX Group Limited or its affiliated companies. This ment advice. The content is purely the author’s per-
article is not intended to provide legal, accounting, sonal opinions and should not be considered advice
tax, investment, financial or other advice and should of any kind. Investors are advised to conduct their
not be relied upon for such advice. The information own research or seek the advice of a registered invest-
provided is not an invitation to purchase securities ment professional.
listed on Toronto Stock Exchange and/or TSX Venture
Exchange. TMX Group and its affiliated companies do
not endorse or recommend any securities referenced in
this document/presentation.

www.stocknewsnow.com MicroCap Review Magazine 91

 COMMODITIES CORNER
Introduction to the Futures Markets
T
he futures markets may seem like a
new idea to some in the investment
community. However, the futures
markets have been around for a very long
time. The futures markets in some form or
another have existed since at least the middle
ages. Some historians may argue it can be
traced back to ancient China. In the U.S., 1848
could be considered a starting point when the
Chicago Board of Trade began. In the U.S.,
futures contracts were initially developed for
agricultural hedging by producers and end-
users to offset market volatility.
dEFininG FUTUrEs conTracTs:
Futures contracts represent a wide array
of sectors and markets traded at futures
exchanges around the world to include:
Equity indices; fixed income; currencies;
energies; softs such as orange juice, cot-
ton, sugar, and coffee; metals; grains; meats;
single stock futures; volatility indices such
as VIX futures and VSTOXX futures. As of
December 2017, bitcoin futures joined the
list of futures contracts.
Some of the benefits of futures markets include:
1: Centrally located on an exchange.
Therefore the contracts offer price discovery
derived from bid / ask spreads.
2: Ability for producers or end-users to
hedge or offset their risk.
3: Usually, easier liquidity versus the spot market.
Futures are a legal and binding standardized
contract with delivery dates, delivery locations
and grades of the underlying market to deliver.
n BY MARK SHORE, MBA
92 MicroCap Review Magazine
Some contracts such as the E-mini S&P 500
and Eurodollars are cash-settled instead of
delivering an actual product. A cash-settled
contract does not include delivery of the
underlying contract. Instead, a debit or credit
is applied to the futures account when the
contract expires. The majority of futures con-
tracts are not delivered at expiration.1 Instead,
traders may either unwind their position or
may rollover their position from the expiring
month they are currently positioned in, to a
farther back month (expires at a later time).
The process of rolling over a position may
cause either a positive or negative roll yield
depending on the current shape of the forward
curve as either in backwardation or contango.
I’ll leave the discussion of forward curves for
another time. But keep in mind, contango (not
a dance from Argentina) occurs when the spot
(cash) price is lower than the futures prices.
Backwardation occurs when the spot price is
higher than futures prices.
A futures contract is derived from an under-
lying market such as crude oil, gold or treasury
bonds. Futures markets allow traders to sell
short without the need to borrow such as
short sellers in stocks have to borrow shares of
a given stock. There is no uptick rule to short.
MarGin
In equities, the term margin, are funds borrowed
from a brokerage firm to purchase shares of stock.
The investor pays an interest rate for the borrowed
funds. In the futures world margin refers to the
required amount needed in an account to trade
in a given futures market. Think of it as a good
faith deposit a trader will retain in their account
to enter and maintain a position. If the market
moves against a trader and the value of the account
decreases, a trader may need to add funds to their
account to meet the required margin.
Because futures contracts are designed to be a
leveraged product, only a percentage of the con-
tract’s value is required for margin. For example,
if a corn futures contract trades at $3 per bushel
and each contract is 5,000 bushels. The value of
the contract is $15,000. However, a trader may
be required to only maintain $500 to $1,000 in
their account as margin to enter and continue
the position. Margins vary from market to mar-
ket. Any extra funds could be invested in T-bills
and earning interest.
The margin to equity ratio may be used
to determine the account leverage. The ratio
calculates the dollars needed in the account to
meet the margin divided by the assets held. For
example, if an account is required to maintain
$10,000, but the size of the account is $100,000
the ratio is $10k / $100k = 10%. The higher the
ratio, the greater the account’s leverage.
The Securities and Exchange Commission
(SEC) regulates the securities industry.
In 1975 the Commodity Futures Trading
Commission (CFTC) became the futures
regulator due to the Commodity Futures
Trading Commission Act of 1974.
diFFErEncE BETWEEn FUTUrEs
and ForWard conTracTs
In the managed futures course I teach at
DePaul University and the workshops I teach
on managed futures, I’m frequently asked the
difference between a futures contract and a
forward contract? The table below demon-
strates some of the differences.
opEn inTErEsT
Open interest is a term frequently used in
the futures industry. It represents the entire
amount of futures contracts outstanding at
the close of a trading day for either the longs
or the shorts. Since each futures transaction
has a buyer and seller, only one side of the
transaction is counted to calculate open
interest.2 Open interest will either increase,
decrease or remain the same dependent of
futures positions increasing or decreasing
www.stocknewsnow.com
 Futures
Standardized
Exchange traded
Exchange clearinghouse is the counterparty
Market to market daily
Margins required to be posted
Regulated
Source: https://institute.cmegroup.com, http://www.theoptionsguide.com/difference-between-futures-and-forwards.aspx
in a given market. As a futures contract gets
closer to the expiration day, the open inter-
est will usually decline, and it will grow in
the nearby month as traders reduce their
positions in the front month and enter new
positions or roll into the nearby expiration.
Methodologies of Trading
There are primarily two schools of thought on
how to trade the futures markets. 1) Trading
fundamental or discretionary methods to
include supply and demand, economic reports,
commodity reports, and government policies,
traders judgment, and other possible factors.
2) The quantitative technique involves
factors such as price, volume open interest,
volatility, risk management and quantitative
formulas (aka “algos”) or other factors. Thus
creating a rules-based methodology of trading
frequently referred to as systematic trading.
There are three types of market partici-
pants: 1) hedgers who use the market to
hedge their production or use of a given
market. For example, a farmer or food com-
pany may use futures to hedge. 2) An indi-
vidual trader, who trades their account. 3) A
professional trader, trading on behalf of cli-
ents (often referred as Commodity Trading
Advisors or CTAs) or for a proprietary firm.
Risk Management:
Some forms of risk management include, but
are not limited to:
1. Utilizing buy stops and sell stops. They
may be used to get into a long or short
position. Once a position occurs, the
stops may be used to unwind a posi-
www.stocknewsnow.com
Forwards
Customized
Privately negotiated
Individual counterparty risk
P & L may be realized at settlement
Margins are not required
Not regulated
tion if the stop is touched.
2. Profit targets: When a certain price
level is reached, a position is reduced
or closed. Frequently a price level or
percentage level is utilized.
3. Size of the position may be adjusted
to adhere to the market environment.
4. Hedging the position with other
futures contracts or utilizing options
on futures contracts.
Trading will include some
of the following:
Directional: Going long a futures contract
and selling at a higher price. Or shorting
a futures contract and repurchasing it at a
lower price.
Spreading: Spread trades are the same
concept as relative value strategies. A trader
may buy the spread if the trader believes the
price difference in the two futures contracts
will widen. Or sell the spread if the price
differential is perceived as too wide and will
narrow over time. Each component of the
spread is called a “leg”. The process includes
buying a futures contract in one market and
selling a futures contract in a different mar-
ket with the same expirations (Intermarket
spreading). Or purchasing a contract in one
expiration month of a market and selling
a different expiration month of the same
futures market (Intra-market spreading).
Margins are often lower for spread positions
versus directional positions.
This article introduces many basic concepts
of the futures markets. However, for anyone
interested in futures trading, a deeper under-
standing of the futures markets is needed
before entering into futures trading. n
(Endnotes)
1 Hull, J. (2014). Fundamentals of Futures and
Options Markets (8th ed.). Upper Saddle River, NJ:
Pearson Education, Inc.
2 https://institute.cmegroup.com/support/glossary
Mark Shore, Director of Educational Research at
Coquest Advisors LLC, has more than 30 years of
experience in alternative investments, publishes
research, consults on alternative investments and con-
ducts educational workshops. mshore@coquest.com
Mr. Shore is also an Adjunct Professor at DePaul
University’s Kellstadt Graduate School of Business
where he teaches a managed futures / global macro
course. He is a board member of the Arditti Center
for Risk Management at DePaul University. Mr.
Shore is a frequent speaker at alternative invest-
ment events. He is a contributing writer for the
Eurex Exchange, Cboe, Swiss Derivatives Review,
MicroCap Review and Seeking Alpha.
Prior to Coquest Advisors, Mr. Shore founded Shore
Capital Research, a research/ consulting firm for alterna-
tive investments. Prior to Shore Capital, Mr. Shore was
Head of Risk for Octane Research Inc ($1.1 billion AUM),
where he was responsible for quantitative risk manage-
ment analysis and due diligence of Fund of Funds. He
chaired the Risk Management Committee and was a vot-
ing member of the Investment Committee. Prior to join-
ing Octane, he was the COO of VK Capital Inc, a wholly
owned Commodity Trading Advisor unit ($300 million
AUM) of Morgan Stanley. Mr. Shore provided research
and risk management expertise on portfolio construction,
product development and business strategy.
He received his MBA from the University of
Chicago and is currently a doctoral candidate at
DePaul University.
Past performance is not necessarily indicative of
future results. There is risk of loss when investing in
futures and options. Futures can be a volatile and
risky investment; only use appropriate risk capital; this
investment is not for everyone. The opinions expressed
are solely those of the author and are only for educa-
tional purposes. Please talk to your financial advisor
before making any investment decisions.
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 93
 O P I N ION
Aussie Companies
I
t is hard to believe that so many emerg-
ing USA based businesses could remain
undiscovered for so long.
This issue contains 8 Australian listed
stocks with most of their assets and business
in the USA and many of their shareholders
in Australia. The inevitable result is that the
Australian markets can never fully appreci-
ate the value of these businesses and up until
now US investors have had no direct means
of participation in their own time zone and
markets.
Additionally, these 8 profiled compa-
nies are extensively and fully covered by
Independent Investment Research* which
produces first class research under its license
issued by the Australian Securities and
Investment Commission,
Australia lists a lot more than resources
stocks. There is a strong appetite in Australia
for investment in foreign businesses. Most
of these public companies are in varying
stages of development and have spent time
and money to have themselves listed on the
n BY JOHN KIMBER
www.stocknewsnow.com
Australian Securities Exchange which is well
received internationally for its recognition
of GAAP accounting, continuous disclosure
and governance standards that mirror the
best offshore markets. As fully reporting
ASX listed companies there is a clear path to
listing on the US markets. The missing links
for many of these companies in the past has
been 1. lack of market awareness and inves-
tor visibility to the right audience, 2. few
interested US market makers, 3. difficulty
buying and selling ASX listed stocks through
US brokers/dealers, and 4. lack of available
information in the US.
Thanks to SNN Inc., publishers of
MicroCap Review Magazine, StockNewsNow.
com, and hosts of the Planet MicroCap
Showcase, Australian companies with US
operations have begun sharing their stories
with North American investor audiences.
It is also worth mentioning that US retail
investors have been starved of good IPO
participation in the past few years. Fewer
companies are going public and there are
fewer opportunities for participation in
good microcap stocks at the ground floor.
Household names like Uber and AirBnB
remain unlisted for years and years with
fewer companies wanting to run the gauntlet
of legal fees and US investor activism.
Australian companies with their entrepre-
neurial can-do spirit are filling the gap for
investors seeking ground floor opportunities
in a wide range of US based businesses that
just happen to be listed on the ASX.
It is more than 30 years ago now but
don’t forget that it was an Australian yacht
skippered by John Bertrand that snatched
the America’s Cup away for the first time in
200 years in 1984. We like to think the same
thing could happen in the financial markets
in the next few years. n
*Independent Investment Research: “Independent
Investment Research (IIR) is the largest independent
equities research house in the small/ microcap space
for in Australia for listed companies across all sectors
- (the large caps equities part of the business was sold
to Morningstar in 2009) -   its business is regulated
like broker/ dealer focuses on supporting research
needs to brokers, family office and Institutional enti-
ties globally.   It does not deal in stocks nor does it
undertake any investor relations or like promotional
activities. In fact any promotional activities for its
researched clients are prohibited It has complete edi-
torial independence on its research outputs.
John Kimber – Executive Director - Americas
John Kimber is the Executive Director in North
America of Independent Investment Research.
After graduating in Economics from University
of Sydney John spent several years at Coopers and
Lybrand (now Pwc) as an accountant and then
changed career and was employed as a financial jour-
nalist and economics correspondent in South Africa
and London for the Financial Times and finally with
Reuters Economic Services. He then changed his
career path again and commenced work as a research
analyst and later became a full Member of the Sydney
Futures Exchange. John was employed for many years
in Sydney with Prudential Bache Securities, BT Alex
Brown (Bankers Trust) and then with Ord Minnett
(JP Morgan) where he specialized in offshore invest-
ments and the local subsidiaries of foreign corpora-
tions in Australia. He is married to an American from
Denver and located there in October 2012 to further
pursue his career with IIR He maintains close links
with the Colorado mining industry and with the bio-
technology and medical device industry in Colorado.
John takes an active interest in all aspects of Denver
business, sporting and cultural life. He is an active mem-
ber of the Denver Athletic Club, The Colorado Mining
Association, the Society for Mining and Exploration, the
Denver Petroleum Club and the Colorado Bio Science
Association and attends most of their meetings. He is
an active participant with graduates from the Colorado
School of Mines. John is a regular attendee at the PDAC
conference in Toronto and maintains close links with
the Australian Stock Exchange, Bank of New York,
various brokerages and investment institutions, and the
various Exchanges in the United States which provide
listing facilities for Australian companies.
Note: This article is not an attempt to provide
investment advice. The content is purely the author’s
personal opinions and should not be considered
advice of any kind. Investors are advised to conduct
their own research or seek the advice of a registered
investment professional. The author does not own
shares or any equity or debt interest in any companies
mentioned in this article before or at its publishing.
MicroCap Review Magazine 95
 OPINION
The DJIA and the USA Economy:
Past, Present and Potential Future
CORNERSTONE GLOBAL
GROUP “T-REPORT”
EconoMic coMMEnTarY
• The “Great Experiment” in Democracy
began on 2 July 1776 with the
Declaration of Independence, approved
by the Continental Congress on 4 July
1776 and signed on 2 August 1776
• Since that time, much has transpired
economically, socially and geopoliti-
cally in the USA and around the world.
• History records a wide variety of
cyclical trends in diverse areas, to
include the well-known and docu-
mented Cycle of Nations
• The Cycle of Nations is a summary
of many repetitive cycles that, in the
aggregate, reflect the rise and fall of
empires throughout recorded history
n BY STEVEN M. SHELTON,
MS, MBA, CFP®, CLU, CHFC, TEP,
CIMA®, CMT
96 MicroCap Review Magazine
• Why do such cycles reflect the demise
of so many great nations?
• The German philosopher Hegel
(1770-1831) stated it most succinctly,
“Just because men and women learned
about the past, that didn’t mean they’d
make better decisions
• about the future. What experience
and history teach us is this—that
people and governments never have
learned anything from history, or
acted on principles deduced from it.”
• That is a profound statement as he was
born and lived through the beginning
stages of the current Revolutionary
Cycle that is topping now and will
soon to be trending to the bottom of
the current cycle to begin again
• In summary, many great nations have
progressed through a cycle of stages
in which they expanded, matured,
declined and collapsed.
• Far from a surprise to financial mar-
ket observers, many great companies
have followed the same cycle, to be
discussed at a later date.
• To be clear, that does not mean that
the USA and other nations must con-
tinue the cycle, which is a reflection of
repetitive human behavior and might
be considered “Behavioral Economics.”
• What would break that cycle is an
understanding of the past; accurate
assessment of the present; and for-
ward looking actions founded on
historical lessons learned   Revolutionary Cycle”
• As the great British Prime Minister
and noted historian Winston
Churchill observed, “The farther
backward you can look, the farther
forward you are likely to see.”
• I suggest that the history of the USA
Stock markets, especially the Dow
Jones Industrial Average and other
charts presented in graphical form
below, are worthy proxies by which to
witness and learn from the past, pres-
ent and potential future of the USA
• First, consider the following
• The USA’s current indebtedness
stands at $21.2 Trillion or 107.1% of
GDP and rising every minute
• That is the tenth largest ratio of debt to
GDP in the world, just behind, Japan
(1), Lebanon (2), Italy (3), Eritrea (4),
Portugal (5), Cape Verde (6), Bhutan
(7), Libya (8) and Jamaica (9)
• Federal debt, as a percentage of GDP,
has almost doubled since the turn of
the century
• The big jump occurred during the
2007–2009 recession and the debt has
continued to grow
• This is a consequence of a fiscal policy
of higher spending; lower than historical
GDP growth; a prior USA central bank
monetary policy of Quantitative Easing
(QE); and continued artificially low rates
• The recent blips up in GDP growth
have not established a confirmed
trend as of date
• In fact, the words, “TRADE WAR”,
may very well indicate that a peak in
GDP growth may be behind us, as
history may suggest per the “250 year
• Some Sovereign debt around the world
is being held at even lower historical
levels of interest rates, due to Global
Central Bank monetary policy, but for
www.stocknewsnow.com
 how long can that continue without
adverse and unintended consequences?
• In the meantime, the USA Fed has
stated that they are moving “toward”
normalization through Quantitative
Tightening (QT)
• However, “moving toward” suggests
they are not normalized as of date
and the market mechanism to allo-
cate scarce resources, such as capital
at market established interest rates or
equity values, are still impaired
• As interest rates rise, the impact of the
increased borrowing costs would not
be a positive for the USA government
issuing Treasuries, corporate bond
market issuers, and the stock market
• The reason for concern is that USA
corporate debt, due in part to stock
buy backs and low interest rates, as
well as, stock margin and household
debt are at or near all-time highs
• Additionally, many USA cities are
heavily in debt, as well as, govern-
ment and private pensions and
household retirement accounts are
severely underfunded?
• Additional upside pressure on rates
would eventually come from more
Quantitative Tightening and addi-
tional corporate bondholder com-
pensation for default risk
• It is logical that the bond holders
of USA Treasury debt will be paid
through eventually higher taxes and
reduced government programs and
not an inflation bail out
• Inflationary policies have been applied
in the past by select nations, as a means
to inflate their way out of excess debt
• However, such policies have had little
success, considerable negative impact
on the country and its citizenry and
ultimately resulting in deflation,
which “wrings” out the excess debt
• As for the USA, the $21 Trillion of
indebtedness does not include the
unfunded liabilities of Medicare and
Social Security
www.stocknewsnow.com
• Per a Forbes article, the net present
value of the US government’s 75-year
future liability for Social Security and
Medicare is $210 Trillion
• That amount exceeds the net present
value of the tax revenue designated to
pay those benefits by $46.7 trillion
• This $46.7 trillion will logically come
from higher taxes and reduced pro-
grams, given the runaway indebted-
ness of the USA government, corpo-
rations and households
• Tax cuts, in this time frame of the
Long Wave Cycle Winter, along with
increased federal spending, is leading
to a point of “debt reckoning”
• Given this scenario, perhaps a con-
cern is that fewer will want to buy US
debt, pushing up rates even more
• Currently, China and Japan are the
top two countries owning US debt,
most ironic in this time of Trade
Tensions, a characteristic of the eco-
nomic “Winter Season”
• It is not a surprise that both countries are
allegedly manipulating their currencies,
devaluing them to the US Dollar, so that
the value of their US Debt holdings and
yields becomes greater
• So far, with the USA being the world’s
reserve currency, its credit standing
and safety given the rest of the world,
attractive treasury rates and it’s still
strong consumer economy, USA
Treasury debt is in demand so far
Global Dow Monthly Bar Chart
• The long wave cycle, 250 year
Revolutionary Cycle, and more con-
verging cycles are pointing toward a
Grand Reset, a debt “jubilee”
• This reset is cyclical and is quite
healthy to rid an economy of excess
debt and capacity
• With all the various bailouts and
monetary fiscal policies, this reset
was not allowed to occur during
the Great Recession, thus, creating
increasing historic debt
• If the reset were encouraged, it would
bring forth a new economic “spring
season”
• It is plausible that if this natural-
ly economic cleansing was fostered
within a positive monetary and fis-
cal environment, it would have the
potential to break the rise and fall
cycle of a nation’s demise?
• Although unpopular and painful as it
may be, this course of action should
be considered
• The charts and commentary below
add clarity regarding where the USA
is economically and financially, as well
as, the DJIA’s potential trends going
forward
Global Dow Monthly Bar
Chart
• The Global Dow tracks 150 stocks select-
ed from leading companies in all indus-
MicroCap Review Magazine 97

Dow Jones Industrial Average Monthly Bar Chart
tries globally including emerging and
developed markets selected for current
size, reputation and potential, as well as
emerging sectors like alternative energy
• It’s a comprehensive barometer of the
global equity trend
• This elegant chart portrays a very
compelling visualization that a major
top has likely occurred, awaiting a
decisive reversal down or, conversely,
one more move up to a lasting crest,
most likely well under the January
high and, ideally, in 2018
• The Global Dow also portends of a
substantial global decline in equi-
Foundation for the Study of Cycles “Super Bear” report
Courtesy of the Foundation for the Study of Cycles (FSC), https://timingandtrading.com
98 MicroCap Review Magazine
ties, once a top is confirmed but not
all individual stocks will decline the
same percentage, nor will other index
averages that they may comprise
• Interesting, year-to-date, the S&P is up
more than 4% while world stocks (exclud-
ing the U.S.) are down more than 4%,
indicating a “fractured” global market
Dow Jones Industrial
Average Monthly Bar
Chart
• This chart is a “factual” snapshot of
DJIA history since 1980
• Thanks to the historic extraordinary
global monetary and fiscal policy,
global equities have had quite the ride
• However, who will mention or deal
with the debt bomb, comprised of
historic margin, household, corpo-
rate and sovereign wealth debt?
• It’s getting bigger by the day and histo-
ry is clear, it is most difficult to inflate
it away, as many have tried, it usually
ends in deflation – a Grand Reset
• Turkey is likely just the beginning, as
Italy or another country or company
or bank may be next “trigger” event
Foundation for the Study
of Cycles “Super Bear”
report
• The above chart is from the FSC,
which I have been a member and sup-
porter since the 1970’s
• It is the most recent update regard-
ing long term DJIA cycles, and most
impressive
• It is depicting a top in January 2018
and perhaps the current August crest
or, as an alternative, a double top at a
higher level than present
• The take-away is that this is another
credible analysis indicating a long
term and very important top has
occurred or is about to occur, fol-
lowed by a dramatic decline
• For more information regarding
the Foundation, go to https://timin-
gandtrading.com/
Dow Jones Industrial
Average 20 Year Average
Rate of Return
• This chart depicts the current Long
Wave Cycle in terms of the DJIA,
which began in 1949 and is com-
prised of 4 economic seasons
• Spring Season: 1949 to 1962
• Summer Season: 1962 to 1982
www.stocknewsnow.com
 mean reversion would take the DJIA
well below its current mean and for a
considerable duration
• This provides more historical evi-
dence of the potential for a substan-
tial decline and cleansing of excess
debt and over capacity

Dow Jones Industrial

Average Monthly – 1885 to
Present

• Sources that influenced the cre-

ation of this chart by the author in
MetaStock: general internet searches;
Foundation for the Study of Cycles,
• https://timingandtrading.com; Elliott
Wave International, www.elliottwave.
com; MetaStock International, www.
metastock.com.
Dow Jones Industrial Average 20 Year Average Rate of Return
Courtesy of Thechartstore.com, July 2018 •
• This is a very long term view of the
• Fall Season: 1982 to 2000 asset managers and investors, “mean DJIA, which portrays the topping
• Winter Season: 2000 to 2020-2030? reversion” process at the very top of the upper
• The chart indicates that when the • With the DJIA so far above its histor- trend channel, a top that may be in
Long Wave Cycle winter season ic mean for such a long time, a typical but cannot be confirmed at this time
is over, the DJIA 20 year average
return will be under 0% and per-
haps by a great deal more (mean
reversion)
• Note the move up on the chart from
2009 to 2014 (end of QE), the evident
impact of QE and so is the decline
from 8% to the 31 July 18 rate of 5%
• For all the monetary policy and
fiscal policy expenditures during
that time frame, resulting in enor-
mous debt, that was a short lived
impact and now the resumption of
the downward trend in the 20 year
average return

Dow Jones Industrial

Average Monthly with
Mean Average Since 1885

• The DJIA monthly mean aver-

age chart is quite telling in regards
Dow Jones Industrial Average Monthly with Mean Average Since 1885
to two currently dreaded words to Courtesy of Thechartstore.com, July 2018

www.stocknewsnow.com MicroCap Review Magazine 99


Dow Jones Industrial Average Monthly – 1885 to Present
• There can be many labelings of this
long term chart, as witnessed per
internet searches but, in my opin-
ion, this is the most likely, given
the Revolutionary 250 year cycle,
Brenner’s research, Long Wave Cycle
and intermarket analyses
• Once the pending decline is over,
look carefully at the chart, as the final
bottom for the Grand Super Cycle IV
is not likely until at least 2062-2066,
all an extreme estimate
• I have depicted a very simple struc-
ture but it can take many different
forms depending on market action
dictates
• Until the final bottom occurs, expect
high volatility, wide swings and a
personality opposite the great bull
market of the early 1980s to 2000
in sUMMarY
• A Grand Reset is likely on our hori-
zon and with it bringing a close to the
Economic Winter Season
• How it is embraced and handled
through monetary and fiscal policy,
may well impact whether the USA
will break the cycle of the rise and fall
of nations
• It is equally true of other developed
and emerging market economies, as
this is global, with all the attributes
that come with this time frame, to
include trade wars, populism, pro-
100 MicroCap Review Magazine
tectionism, military aggression, civil
unrest, revolutions at the ballet box
and more
• The USA has the opportunity to
come quickly into the economic
Spring Season, unencumbered by the
excess debt of past monetary and fis-
cal policies and rise to new heights of
prosperity
• The past polices, as well meaning as
they were, did not learn from the past
and, thus, placed a heavy debt burden
on the USA and its citizenry
• This analysis is stated in full realiza-
tion that so many of the current eco-
nomic indicators, such as consumer
confidence, are fundamentally bull-
ish, as is the current long term techni-
cal trend of the DJIA, which remains
up as of date
• However, in my analysis, the growing
global technical evidence that tends
to “precede” the fundamentals, war-
rants a current increase in awareness
and defensive preparedness, as we
move into October and the balance
of 2018
• One may not know the day nor the
hour of the Grand Reset but we do
know we are in the Winter Season
in which it historically occurs, caveat
emptor n
Steven M Shelton CFP®, CLU, ChFC, TEP, CIMA®,
CMT
Cornerstone Global Group LLC
Office: 773-697-8021
Cell: 773-294-8174
steven.shelton@cornerstoneglobalgroup.com
www.cornerstoneglobalgroup.com
Broker/Dealer services and investments are offered
by Steven M. Shelton, independent contractor and
FINRA Registered Representative, through Weild &
Co., http://www.weildco.com, a Member of FINRA
http://www.finra.org and SIPC, http://www.sipc.org
Cornerstone Global Group LLC is not affiliated
with Weild & Co.; Cornerstone Global Group LLC
does not offer securities nor securities advice and is
not a member of FINRA/SIPC.
Cornerstone Global Group LLC, 3240 North Lake
Shore Drive, Suite 11-D, Chicago Illinois 60657, may
provide institutional non-FINRA related consultancy
on farming and general marketing, distribution and
product/service development to and for institutional
use only, without contact with any of a consulting
firm’s individual clients
Cornerstone Global Group LLC is also a financial
literacy newsletter publisher of the CGG Global
Market Technical Report and CGG Technical
Research Notes, all of which are general informa-
tional services regarding Global Macro Economics
and Market Technical Analysis. Cornerstone Global
Group LLC’s independent contractor consultants are
not investment advisers. At no time may a reader,
caller, viewer or consultancy client be justified in
inferring that any advice from Cornerstone Global
Group or its Non-FINRA registered consultants
is intended as investment advice or as investment
recommendations directed to any particular person
or in view of the particular circumstances of any
particular person. Investing carries risk of losses,
and trading futures or options is especially risky
because these instruments are highly leveraged, and
traders can lose more than their initial margin
funds.  Before investing consult with your invest-
ment advisor. Cornerstone Global Group LLC does
not render tax, accounting or legal advice and the
information contained in this communication should
not be regarded as such. Information provided by
Cornerstone Global Group is expressed in good faith
but is not guaranteed in any way.
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
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www.stocknewsnow.com MicroCap Review Magazine 101
 F E AT U R E D A R T I C L E
Tracking Micro Cap
Debt in Southeast Asia
T hrough our years of experience analyzing Asia’s markets, we’ve
developed a proprietary economic model known as the Asian Capital
Development model (ACD) to track capital flows in Asian debt markets.
Through extensive back-testing, we have
identified debt fluctuations as key indicators
for profiting off Asian stock markets, using
the debt cycle for maximizing our gains.
In brief, while using ACD, governments
pour large amounts of cheap debt influxes
into state-selected industries or companies,
thus turning their economic agendas into
realities. Governments direct their banking
system and capital distribution through the
private sector.
As a result, there are clear cycles of debt
and credit throughout the region. And the
“hot spots” absorbing the debt injection at
preferential borrowing rates have had the
n BY PETER PHAM
102 MicroCap Review Magazine
road cleared for them to skyrocket.
In other words, you as an investor possess
a significant advantage by understanding
debt cycles and knowing where the next
boom will occur.
At One Road Research, the research firm I
run, we track exactly that. Our team of Asia-
based researchers are constantly on the lookout
for new opportunities, and in the developing
economies of East and Southeast Asia, a lot of
this opportunity is to be found in companies
that fall within the micro cap category.
ThE EMErGinG MarKET
oF GoVErnMEnT-BacKEd
indUsTrY
A big part of our day to day work involves
developing and testing investment theses
that track the region’s micro and large cap
stocks, using our ACD model as a tool for
isolating opportunities that we can highlight
and provide to our clients. Our strategy for
our portfolio is long term growth through
well-timed exposure to companies benefit-
ing from government-protected expansion.
This means we are looking for well-priced
stocks that benefit from stable management,
good market prospects and are protected by
governments that have committed – offi-
cially or otherwise – to ensuring that these
homegrown entities do well.
The role of government in Asian econo-
mies, particularly in state-centric economies
of China, Japan, Korea and Vietnam, is key
to understanding the way in which certain
sectors and industries develop.
The success of government-backed indus-
tries in Asia’s developing or developed econ-
omies serves a range of purposes, from the
narrow, self-serving interests of politicians
looking to line their pockets, to the wider
political legitimacy that is afforded to gov-
ernments that are seen to be doing a good job
at running the economy.
What we realized, was that there was a way
to basically join the party without an explicit
invite. As the region’s stock markets begin to
develop and liberalize, opportunities arise
for private, non-connected and also foreign
investors to get a piece of the action, benefit-
ing from the embedded connections between
government and business in the region.
So, instead of just sitting back and watching
governments and their business associates line
their pockets, at One Road Research we inves-
tigate where governments have instructed
their capital markets to direct cheap credit
flows to, and then use this information to
provide our clients with clearly profitable,
low-risk investment opportunities.
Using our ACD model as a basis, we
develop solid economic models for profiting
off both micro and large cap companies in
the region.
We have back-tested this model across a
www.stocknewsnow.com
range of Asian economies, from the devel-
oped Northeast to the developing Southeast.
The cheap credit stream has proved itself
again and again as an effective investment
indicator across the board, even in vastly
different industries and economies.
While many of the companies benefit-
ting from these government-instigated debt
cycles in the developed Northeast Asian
economies are unsurprisingly large-cap,
many in the developing countries of the
Southeast would be considered micro cap.
Vietnamese Real Estate
Groups – Micro Caps with
Mega Potential
Vietnam is expected to become a very
appealing ‘alternative property market’, as
neighboring real estate markets like China,
Japan, and Hong Kong freeze up.
The government has conducted various
stimulus policies to excite the domestic real
estate market.
The number of foreigners buying in
Vietnam has doubled since 2014. Coupled
with speedy economic expansion and eased
entry barriers, property investments in the
two largest cities — Ho Chi Minh and Hanoi
— have exhibited tremendous profitability in
recent years. 
 So, our microcap stock pick from Vietnam
www.stocknewsnow.com
Debt growth our Vietnam portfolio was
very significant in 2017 (at roughly 500%).
This surge in debt was fueled by the real
estate and consumer discretionary sectors.
Positive economic results in 1H18 and
rising incomes across the board have also
encouraged the growth of consumer discre-
tionary companies, notably mobile phone
retailers.
Similarly, Vietnam’s real estate sector con-
tinues its steady growth, with no sign of a
slow down, while fears that the expanding
sector was a bubble and not a tough balloon
seem to have faded as the overall economy
develops in tandem. GDP growth of 6.8%
in 2017 made it one of the fastest growing
economies in Asia.
Although the growth pace has slowed
down compared to previous years, a key sup-
porting factor is the government’s continued
investment in large-scale infrastructure proj-
ects, which helps make the country’s trajec-
tory to a middle income status, advanced
manufacturing economy almost guaranteed.
Vietnam is one of the largest investors in
infrastructure in the region, spending more
than 5% of its GDP on big projects such
as roads, metro networks, power grids and
ports, making it second only to China in
this regard.
– Nam Long Investment Corporation – is
from the real estate sector, whose growth
is forecast to continue steadily well into the
next decade.
But that being said, it’s just the tip of the
iceberg of the range of companies across
Asia that we’ve isolated as fulfilling all of our
tried and tested requirements for projected
upward trajectories across a whole range of
sectors in this exciting new economic envi-
ronment.
For example, in Malaysia, its newly-elect-
ed government bodes well for the country’s
politics and economy. It has changed the
guard at market regulators and state-owned
firms, boosting confidence in initially-jittery
stock markets as investors take a shine to
the prospect of better governance and an
end to decades of patronage politics. The
bullish factors for Malaysia now also rely on
higher oil prices, a recovering currency, and
a quickly-narrowing deficit.
One of our picks from the country – Wah
Seong Corp Bhd – has a market cap of just
under US$300 million and had debt growth
of 100% over the last year. This infrastruc-
ture company, which is well-positioned to
serve Malaysia’s expanding oil export capac-
ity, is also quite cheap to buy with a P/E ratio
of 10.
If you’d like to find out more about other
MicroCap Review Magazine 103
emerging Asian micro caps that are ben-
efitting from government-led cheap credit,
feel free to contact me directly using the
email below, or sign up to our newsletter
and/or premium subscription service. We
offer free content via our email newsletter,
Decoding Asia, to anyone who wants to truly
understand the region, as well as premium
paid content via our exclusive publication,
Asia Insider, which provides more detailed
insights and reports into specific industries,
sectors, stocks and recommended actions.
Good investing, n
104 MicroCap Review Magazine
Peter Pham Under Pham’s management, Phoenix Capital created
the VN30 Equal Weight Index, which tracks the total
www.oneroadresearch.com performance of the top 30 large-cap, liquid stocks
research@oneroadresearch.com listed on the Ho Chi Minh City Stock Exchange. All
index constituents are equal-weighted, helping inves-
tors with foreign ownership, liquidity, and state-owned
Peter Pham is an author, researcher and investor.
enterprise issues in Vietnam. The index is the first
Pham’s book, The Big Trade: Simple Strategies for
index in Vietnam to be affiliated with S&P Dow Jones
Maximum Market Returns, was published in 2013 by
Indices for updates and calculations.
John Wiley and Sons. Pham has contributed invest-
ment advice on different media platforms, including
Note: This article is not an attempt to provide invest-
Seeking Alpha, CNN Money Trading Markets and
ment advice. The content is purely the author’s per-
Forbes. He is the creator and editor of “One Road
sonal opinions and should not be considered advice of
Research”, a website focused on decoding Asia for
any kind. Investors are advised to conduct their own
international investors. He also presents a podcast that
research or seek the advice of a registered investment
was launched on iTunes in 2014, which has featured
professional. The author does not own shares or any
guest appearances from experts such as Ron Paul, Jim
equity or debt interest in any companies mentioned in
Rogers, Robert Kiyosaki, Marc Faber, John Perkins,
this article before or at its publishing.
and Kevin Kelly, to name a few. Pham is currently
the managing director and principal fund manager
of the award winning Phoenix Capital Group and
serves on the board of Wisdom and Founder Girls.
www.stocknewsnow.com
 OPINION
O il prices continue to rise on as increased
global demand and U.S. efforts to shut
out Iranian output through the use of sanctions
outweighed drilling data suggesting that U.S.
shale production would climb.
The United States new Administration
says it wants to reduce oil exports from Iran,
the world’s fifth-biggest producer, to zero by
November 2018 in a move that will oblige other
big producers such as Saudi Arabia to pump
more. But Saudi Arabia and other members of
the Organization of the Petroleum Exporting
Countries (OPEC) have little spare capacity and
oil demand has risen faster than supply over the
past year. The oil industry risks a supply crunch
as big energy companies focus on US shale and
other short-term efforts over the long-term
mega-projects seen in years past, the head of
Saudi Arabia’s state energy giant said.
Energy majors are prioritizing cutting costs
and returning money to investors through
dividends and share buybacks after a brutal
industry downturn.
At the same time there has been a decline in
exports from several OPEC producers, includ-
ing Libya. Libya’s national oil output has fallen
to 527,000 barrels per day (bpd) from a high of
1.28 million bpd in February, according to the
Libyan National Oil Corporation
U.S. oil output is increasing but is unable to
fill the supply gap if U.S. sanctions successfully
block Iranian exports.
Technological advances in hydraulic fractur-
ing have unlocked vast amounts of oil from
“tight” rock formations, and ExxonMobil,
Chevron and Royal Dutch Shell are among
those investing heavily in US shale fields,
which generate cash quicker. But the world will
still depend on conventional oil such as that
n BY FREDERIC SCHEER
www.stocknewsnow.com
Oil & Gas Turmoil But Steady Growth in 2018
from Saudi Arabia, the world’s biggest exporter.
Saudi Arabia’s willingness and preparedness
for a stock market listing of Saudi Aramco is
now in doubt amid concerns about legal expo-
sure and an inability to generate the $2 trillion
valuation sought by the kingdom’s powerful
crown prince, Mohammed bin Salman.
American energy companies increased the
number of rigs drilling for oil by five to 863,
up 100 year on year, reported by Baker Hughes
in early July.
The U.S. rig count, an early indicator of
future output, is much higher than a year ago
because companies have ramped up produc-
tion in response to higher prices. But the U.S.
oil market is still tightening. Crude inventories
at Cushing, Oklahoma, the delivery point for
U.S. crude futures, have fallen to their lowest in
3-1/2 years, data shows.
Are we going toward a crunch and peak on
oil price?
OPEC, Russia and other producers agreed in
June to a modest increase in output to dampen
oil prices. A rise in supply will reverse some
of the output cuts that OPEC and other major
producers put in place in early 2017 to end
several years of glut.
Brent crude, the global oil benchmark, is up
settling in the high $70 since mid-April and flirt-
ing with $80 a barrel on London’s ICE Futures
exchange and West Texas Intermediate (WTI)
futures is trading in the low to mid $70 a barrel.
Unplanned supply outages like Libya and
Canada, which started earlier this month, are
helping support the market with prices holding
near more than three-year highs. Expectations
that U.S. sanctions against Iran and the contin-
ued economic crisis in Venezuela could further
deplete global oil supplies were also bullish.
So, the price is and will remain high, which
could become a stunning block for a continued
growth of the economy.
The developing trade war between the U.S.
and China is unsettling as both countries are
bickering at each other, introducing tariffs on
each other’s exports. So far crude has been kept
of China’s list of goods it imports from the U.S.
but it has indicated this could change.
US president Donald Trump has called on the
Kingdom to ramp up output by 2m b/d to calm
rising oil prices, amid outages in Venezuela and
an impending drop in Iranian supplies after the
re-imposition of oil sanctions. The US, despite
the shale boom, is still reliant on foreign oil but
Saudi Arabia cannot be relied upon alone to
keep the oil market in check over the long term.
The International Energy Agency (IEA) has
said insufficient investment into new large-scale
projects will lead to a supply shortfall in the
early 2020s just as US shale production plateaus.
Capital expenditure by energy groups is expect-
ed to fall by nearly half from the 2010-15 level.
The industry needs about $500 Million in
new investment that none of the Majors are
willing to do as they are making their investors
happy after the crunch of the Obama era.
On the short-term prices seems to be settling in
the $70, may peak to $80 due to some topical issues
(hurricanes, or other unexpected shut down) but
what would happen in 2020 remains to be seen and
will be largely a function of geopolitical decision.
One interesting development could be a
significant increase in Gaz export toward the
EU as the Trump Administration is trying to
obtain from its European “Allies” to switch from
Russian to American gaz. This also could have
an impact in the energy industry as well and
eventually could trigger the Majors to re-start
investment in large oil infrastructure projects to
keep up with the 2020 supply crunch to come. n
I wrote this article myself in reviewing public disclo-
sures, and it expresses my own opinions. I am not
receiving compensation for it. I have no business rela-
tionship with any company whose stock is mentioned
in this article. Please be aware of the risks associated in
investing in public stocks and this Article should not be
considered as an invitation to purchase any stocks.
Frederic Scheer is CEO of L6NRG is an indepen-
dent Oil & Gas company, Montana based corpora-
tion working on drilling exploration in East Montana,
North Dakota and Wyoming. He is also the CEO of
Libra6 Management, Corp, a small private equity com-
pany operating in new alternative technology, media
and chemicals. Scheer was the Ceo of several public
companies including Cereplast a biomaterial company,
the Cannon Group, an entertainment company and
Imperials Hotels a hotel management company.
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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.
MicroCap Review Magazine 105
 OPINION

2020 BioPharma Expansion

and the Opportunities of
Heading East
How do we hitch our wagons?

T he geographical distances may be vast, but the regulatory steps

and cross-border collaborations are bringing the markets closer.
The joint poll by management consultants A report jointly published by the social
L.E.K and US trade body, Biotechnology development department of the Ministry
Innovation Organization (BIO), found 86% of Science and Technology and the
of biopharma firms are interested in China  China National Center for Biotechnology
Drug regulatory reform, pro-biotech Development, stated that the output of
trends, new intellectual property rights pro- China’s biotechnology industry will rise to 8
tection and increased public and private to 10 trillion yuan (1.21 to 1.51 trillion U.S.
investment within China are contributing to dollars) by 2020.
the Chinese market’s attractiveness. This added value of the biotech industry
will account for over 4 percent of the coun-
try’s gross domestic product (GDP) by 2020.
As one of the most dynamic and influential
industries in the 21st century, the biotech
industry has become a major emerging sec-
tor of strategic importance in China.
With all these factors considered, the
emergence of US Chinese owned start-ups,
Chinese-American Associations and a pleth-
ora of state side investors or partners are
growing steadily!
Developing a presence in this movement
is key and understanding “who and how”
can have a dizzying effect! As with all things,
making the “contact” and starting the dis-
cussion of partnering are primary. Several
Chinese/Sino-American Associations, such
as SAPA, CABS and CABA, have grown in
membership Nationwide. These Associations
provide Networking and Educational events
that bridge some of the gap. Events ranging
from Investment platforms to Employment
fairs, bring the presence of Chinese based

n BY JAE SLY, MBA, PH.D

106 MicroCap Review Magazine www.stocknewsnow.com


Mitigating the uncertainties and difficulties of
expansion in China and national policies, it is now
seen as highly advantageous and most efficient for
foreign Biopharmaceutical companies to partner
with local Chinese companies when bringing a drug
into the Chinese market.
BioPharma, US BioPharma, start-ups and
Funding partners from Angels, VC an Equity
groups. Participation in presentations or
Roundtables, offer exposure and introduc-
tion to a varied audience.
Before seeking a partner and developing
a strategy for funding approach, taking an
inventory of the strength of your team, tech-
nology presentation and plan for next steps are
essential. Far too often, the plan or technology
presentation are not clearly portrayed. This
is the challenge for all, whether it is US com-
panies, Chinese owned US Companies and
Chinese based Companies. The comfort zone
tends to be within “like company” and step-
ping out of that comfort zone can seem like a
daunting feat. Truly, it is not. Simple steps to
improve your “message” and understand the
right path to take can be easily achieved.
Identifying Financial Advisors that spe-
cialize in acting as a bridge between the
North American and Asian markets. One
steadily growing Company based in New
York is Haitong Securties USA, LLC (HTUS).
HTUS is a SEC and FINRA registered US
broker dealer wholly owned by Haitong
International, the largest listed Chinese
investment bank and brokerage house in
Hong Kong (665:HK).
The parent of Haitong International is
Haitong Securities, headquartered in
Shanghai and the second largest investment
bank and brokerage house in China. HTUS
focus on biopharma sector results from the
experience and knowledge from its direct
parent who has supported many companies
raising capital and listing in Hong Kong and
www.stocknewsnow.com
has specialized teams to this industry.
Mitigating the uncertainties and difficulties
of expansion in China and national policies, it
is now seen as highly advantageous and most
efficient for foreign Biopharmaceutical com-
panies to partner with local Chinese compa-
nies when bringing a drug into the Chinese
market. Chinese companies that have the
knowhow, experience, manufacturing capac-
ity and are very familiar with Chinese law
and the regulatory environment. The latter
is of extreme importance not only in estab-
lishing drug development strategies but also
in tracking the latest updates on regulations
and obtaining preliminary recommendations
and progress of a drug’s registration. Efficient
communication with government bodies
(CFDA, local FDA and the CDE) may also
avoid misguided product R&D.
Moreover, cultural and language chal-
lenges are often mitigated when partnering
with a local company.
In China, policy measures initiated at the
national level to redress the institutional voids
impeding innovation and entrepreneurship
cascade down to more local levels  — the
province level, city level, district level, and so
on — through what are often entrepreneurial
and creative actions taken by local govern-
ment officials. For multinational partners,
this can represent an opportunity to tap into
ecosystem intermediaries that help enhance
the efficacy of their startup partnering efforts.
This may take the form of district govern-
ments within a large city like Shanghai incen-
tivizing corporations to participate in efforts
such as Incubation Platforms or to establish
accelerators of their own. Other policy efforts
may be less obvious (yet effective) as a means
to foster startup partnering.
In summary, while any emerging market
requires a distinct strategy, in the case of China
the distinctiveness of the strategy will likely
be greater because of the profound role of the
state in influencing ecosystem orchestrators,
participants, and intermediaries, Western cor-
porations’ efficacy in tapping the unprecedent-
ed opportunities to engage with startups in
emerging markets such as China will, in part,
be determined by how well they approach
these markets with Strategic Partners and a
defined plan for the Chinese Market. n
Jae Sly is the CEO of Strategic BioPharm Consulting,
Inc. Jae has over 20 years in the Biopharmaceutical
Industry, from R&D to Clinic. Jae is an Industry
Leader providing strategic partnering of Biopharma
technologies and services.  Jae has initiated cross
border partnering platforms, investment forums and
is a corporate mentor in the DE and MD Incubator
Startup Programs. Much of Jae›s career has been with
numerous start-up and small BioPharma Companies
seeking to expand infrastructure, technology exposure
on an International level.. Contract negotiations and
technology evaluation for Investment Opportunities,
has been primary expansion within Jae›s portfo-
lio of services in last few years. Jae maintains a
strong Industry presence by presenting and attend-
ing at major conferences. Jae received her Ph.D. in
Immunology from University of Washington and
MBA from San Diego State University. Jae is a member
of LES, Maryland ICOY, ESACT, BIO and is Adjunct
Faculty at University of Delaware, Bioinformatics
Core.. Jae possesses the skills of being Multi-lingual
and well versed in Cultural negotiations.
Jaesly@gmail.com
410-920-4483
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 107
 F E AT U R E D A RT I C L E

What Are Gold Royalty

Companies and Why Do
They Matter?
G old has been used a trusted hedge in many successful portfolios for
decades. Traditionally, if investors wanted exposure to gold they
would choose between physical gold as a low-risk option or invest in a gold
exploration or mining company if they were eager for higher returns.
However, over the past decade, a new way
to invest in gold has emerged in the market
in the form of gold royalty companies and
such companies have quickly become the
go-to way to invest in gold because they typi-
cally have far more upside than investing in
gold bullion, and far less risk than investing
directly in mining companies.
Traditional gold investments just don’t
cut it anymore. Physical gold, while histori-
cally a safe bet does not at all yield a return
and as an investment, bullion (or ETFs that
track bullion) is restricted to the current
price of gold with no leverage or upside. For
those comfortable with a little more risk,
gold mining companies can provide plenty of
upside. Some of the biggest investment wins
over the last 50 years have come out of the
gold mining industry. Unfortunately, some of
the biggest investment flops have also come

n BY NOLAN WATSON

108 MicroCap Review Magazine www.stocknewsnow.com

out of this industry. Investing in gold mining
can bring plenty of risk. A recent internal
study of over 60 mining companies showed
that almost 80% of the projects scheduled
for production did not start on time. Once
they did commence production, the majority
went over budget and on average, produced
less than half of the expected amount dur-
ing the first year. As a result many mining
companies have trouble paying back the debt
they borrowed to build the mine, resulting
in substantial losses for equity investors. So,
what’s the alternative?
The Gold Royalty Model
Gold royalty companies such as Sandstorm
Gold Royalties (the company that I co-
founded and am CEO of) purchase royal-
ties on gold mines around the world. This
typically includes a single upfront payment
in exchange for the right to a percentage of
the gold production for the life of the mine.
Once a project moves into production, we
sell our percentage of gold and add the
revenues to our free cash flow. Sales from
gold production are then returned back to
shareholders or invested in more royalty
purchases. Simple as that.
Since 2009, Sandstorm has been building a
royalty portfolio with assets on nearly every
continent. As of this writing, we have nearly
190 royalties on mines around the world
including 20 mines in production.
Less Risk, More Upside
Unlike mining companies, royalty compa-
nies don’t operate mines. This removes the
common risks associated with direct invest-
ments in mining operations. If a project runs
over schedule or budget, or is forced to pause
production temporarily, royalty companies
are not responsible for the overhead costs
incurred. Once the upfront royalty pay-
ment is made, the money received from any
operation is clear and free to use on future
investments.
One of the main attractions of investing in
www.stocknewsnow.com
a gold mine is the potential for exploration
upside – that is, the potential for more gold
to be discovered at an existing site or opera-
tion. The technical teams at royalty compa-
nies include geologist and mining engineers
that carefully sift through hundreds of proj-
ects each year, selecting only the opportuni-
ties with the most exploration upside poten-
tial and since the acquisition cost of buying
a royalty is paid upfront, with no ongoing
costs, royalty portfolios get all of this explo-
ration upside as a free benefit to their share-
holders. This can lead to increased mine life
and more gold production to the royalty
company and its shareholders.
An Industry Ready for
Growth
Mining is a tough business, and it seems to
be getting tougher. For mining companies,
raising capital has become increasingly dif-
ficulty over the past several years. With more
and more capital being moved from active to
passive investors, brokers and bankers disap-
pearing or switching industries, and capital
moving into other parts of the capital struc-
ture, mining companies are often left with
little options for financing when they need it.
The gold royalty industry is helping fill
that gap. Over the last 10 years, gold royalty
finance has become a mainstream funding
source for resource companies of all sizes,
and Sandstorm has been a significant part
of that evolution. During the last five years,
close to US$14 billion in royalty transactions
were completed in the mining industry. It
is an attractive financing option to com-
panies since it does not dilute shares and
is less restrictive than debt financing. An
investment from Sandstorm Gold Royalties
provides mining companies with a strategic
partner whose incentives are aligned.
Hundreds of Mines in a
Single Investment
Royalty companies are reshaping the land-
scape of gold investing. Through a diversi-
fied portfolio of carefully selected assets,
royalty companies provide leveraged expo-
sure to gold, while minimizing many of the
common risks. n
Company Profile
Sandstorm is a gold royalty company that provides
upfront financing to gold mining companies that are
looking for capital and in return, receives the right to
a percentage of the gold produced from a mine, for
the life of the mine. Sandstorm has acquired a port-
folio of 188 royalties, of which 20 of the underlying
mines are producing. Sandstorm plans to grow and
diversify its low cost production profile through the
acquisition of additional gold royalties.
For more information visit:
www.sandstormgold.com
Nolan Watson – CPA, FCA, CFA
Since co-founding Sandstorm Gold in 2008, Nolan
Watson has led the company’s transformation from
a small startup into a diversified royalty company
with a billion-dollar market capitalization. Prior to
co-founding Sandstorm, Nolan was Chief Financial
Officer of Silver Wheaton Corp. (now Wheaton
Precious Metals Corp.) where he gained the experi-
ence that he needed to make Sandstorm a reality and
a success. During his time there, Nolan developed
the silver streaming business model and helped raise
more than US$1 billion in debt and equity to fund
the company’s growth.
Nolan is a Fellow of the Chartered Professional
Accountants of British Columbia (Valedictorian). He
holds the designation of Chartered Financial Analyst
and received a Bachelor of Commerce degree, with
honours, from the University of British Columbia.
Nolan’s professional and charitable achievements
are not without their honours either. He was named
the EY Entrepreneur of the Year, recognized as one
of Canada’s Top 40 under 40, awarded CEO of the
Year by Business in Vancouver, and received the
Queen’s Diamond Jubilee Medal. In 2014, Nolan was
recognized as a Young Global Leader by the World
Economic Forum. He is also the President of Nations
Cry, a charity focused on education-based develop-
ment in Sierra Leone, West Africa.
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
Note:: This article  is informational in nature and
should not be construed as providing individualized
investment advice.  Investors are advised to conduct
their own research and due diligence or seek the
advice of a registered investment professional. Both
the Author and Ridgewood Investments disclaim any
liability from the use or misuse of this information.
MicroCap Review Magazine 109
 FIXED INCOME CORNER
Fixed Income
F
ixed income investing is tough going
right now. Through June 25, the
Bloomberg Barclays High Yield
Index posted a paltry year-to-date return of
+0.7% compared to a -3.6% loss for invest-
ment grade bonds and a -1.4% drop for
Treasuries. There is little reason to expect
these returns to improve as long as central
banks are tightening, and when they stop
tightening it will be because the economy
is slowing and stocks will then come under
pressure. But all is not lost – there are still
ways to earn a decent return on your capital
in yield investments without losing money
or placing your money at undue risk. The
key is understanding the economic environ-
ment and knowing where to look.
The Federal Reserve is going to keep
raising rates well into 2019 until it lifts the
Federal Funds Rate (the rate at which banks
lend to each other overnight) to roughly
3.5%. That level is higher than the yield on
n BY MICHAEL E. LEWITT
110 MicroCap Review Magazine
30-year Treasuries. This means that the Fed
will eventually raise the cost of overnight
money higher than the cost of 10 and 30 year
money. This will have profound effects on
the financial system, not just in the United
States but around the world – and it will put
downward pressure on the prices of all fixed
income instruments because their prices
drop as interest rates rise. It is also likely to
put pressure on stock prices for a variety of
reasons.
Ten of the last thirteen recessions were
caused by the Fed raising interest rates, and
many observers believe the Fed will again
raise interest rates too high and push the
U.S. economy into a recession. With the
U.S. economy carrying roughly $65 trillion
of public and private sector debt, a reces-
sion would cause a lot of stress for heavily
indebted borrowers including consumers,
businesses and governments.
There are also concerns that the Treasury
www.stocknewsnow.com

Why would you lend money to the U.S.
government, which spends money like a drunken
sailor, for ten years or thirty years for a lousy 3%
return?
yield curve is signaling that the economy will
slow down sometime in 2019 or 2020. The
shrinking gap between short term and long
term Treasury yields - what is known as
curve flattening - used to signal an oncom-
ing economic slowdown and likely recession
in the period before the Great Financial
Crisis of 2008-9. The yield curve has been
flattening sharply over the last year and is
now at its flattest level since 2007. Now
many people question whether that is still
what it means since central banks play a
much larger role in markets and own tril-
lions of dollars of government bonds. With
$9 trillion of global bonds still yielding
below zero, it is hard to know if the yield
curve is actually predicting a recession, but
we can say with certainty that (1) current
yields are very unattractive and (2) rates are
rising which is bad news for anyone holding
a fixed income piece of paper.
Why would you lend money to the U.S.
government, which spends money like a
drunken sailor, for ten years or thirty years
for a lousy 3% return? And that’s the nomi-
nal return – if you adjust it for inflation, the
return is actually negative. Other invest-
ments like junk bonds may add three or four
percent to that return (annualized) but you
have to take a lot of risk for that extra yield
and you may not get paid back all of your
principal if the company defaults. And if you
invest in the riskiest parts of the junk mar-
ket like Business Development Companies
(BDCs) and other direct lenders that provide
financing to smaller, riskier companies, you
can get higher yields but expose yourself to
even higher odds of borrowers defaulting
when the economy slows down. That is why
it is so tough to make money in bonds and
www.stocknewsnow.com
other fixed income instruments today. The
other problem with these corporate bond
investments – as well as floating rate corpo-
rate bank loans that pay around 5% - is that
they lack strong covenants that provide lend-
ers with rights to prevent borrowers from
taking advantage of them. As a result, when
borrowers do default in this credit cycle,
lenders will recover only a small portion of
their principal.
In order to earn a positive risk-adjusted
and inflation-adjusted return on your cash,
you need to look for investments that pro-
duce returns in the high single digits to low
double digits, and that requires doing some
serious homework.
You also need to be creative and think
out-of-the-box. Avoid large mutual funds
and ETFs that by their very nature are forced
to buy the broad market. Look for unique
investments that may be out of favor with the
mainstream but have merit.
Right now I have two such investments
that I recommend and own in my hedge
fund, The Third Friday Total Return Fund,
L.P.
The first is Chimera Investment Corp.
(CIM). Chimera is a mortgage REIT that
borrows money on a short term basis to buy
mortgages. It hedges its interest rate risk
and does this very effectively. As of July
22, Chimera paid a 10.6% dividend. I have
owned this stock for years and it consistently
produces strong total returns.
The second is Colony Capital Inc. (CLNY).
Colony is a real estate and investment man-
agement company and has been a terrible
investment since merging with NorthStar
Realty and NorthStar Asset Management
last year, leading the stock to drop more
than 50% to under $6.00. But that was then
and this is now. The company is led by real
estate investor Tom Barrack who has a lot
of his net worth wrapped up in the com-
pany and has a lot to prove to investors (and
himself). The stock is now trading at a 50%
discount to book value and paying a $0.44
per share annual dividend while owning a
strong and diverse real estate portfolio. This
may not look like a fixed income investment
but it has the attributes of a high yield-
ing dividend play with equity upside and
significant collateral coverage. I think the
downside on this investment at the current
price is extremely limited and the stock will
eventually move toward book value. Among
its large holders is hedge fund legend Seth
Klarman. n
Michael Lewitt is the Manager of The
Third  Friday  Total Return Fund, L.P., a top-
performing options hedge fund with a 10+ year
track record that has never experienced a losing year
(including during the financial crisis in 2008) (www.
thirdfriday.com).  He is also the editor of The Credit
Strategist  (www.thecreditstrategist.com), a widely
read financial newsletter and of two books,  The
Death of Capital  (2010) and  The Committee to
Destroy the World (2016).  Mr. Lewitt was one of the
few people to predict the 2001-2 credit crisis and the
2008-9 financial crisis.
www.sandstormgold.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. The author does not own
shares or any equity or debt interest in any companies
mentioned in this article before or at its publishing.
MicroCap Review Magazine 111
 OPINION
Why is the Cryptocurrency
Revolution Good for Gold?
I
n this Wall Street View, our host spoke
with Doug Casey, Founder of Casey
Research, at the Sprott Natural Resource
Symposium 2018 in Vancouver, BC.
Shelly Kraft: Let’s get started with a little
explanation as to what you do and then
we’ll go from there.
Doug Casey: Well, I have opinions on the
markets all the markets all around the world.
And I write books a couple of New York
Times bestsellers most recently a couple of
novels “Speculator” and “Drug Lord”.
Shelly Kraft: So, what are you speaking on
at this symposium?
Doug Casey: Well, I’m going to talk about
n BY DOUG CASEY
CASEY RESEARCH
112 MicroCap Review Magazine
why the Bitcoin and crypto revolution is
actually going to be very good for gold. So,
that’s going to be my main speech courses
mania on and crypto’s. The bubble is par-
tially deflated now I’m not exactly sure what’s
going to happen next. I first got involved in
Bitcoin when I was given one, when it was
worth $13 I still have that Bitcoin today and I
bought more and sold some over the years so
on. Bitcoin, the wave of the future they say.
Shelly Kraft: Now how does that relate to
gold and silver?
Doug Casey: Well, here’s the thing, the
actual value the Bitcoin in my opinion is
mostly as a transfer mechanism, that’s why,
however, not just millions but billions of
people in third world countries in Africa,
www.stocknewsnow.com
in South Asia that have currencies that are
blocked and that are worth little within
their countries and nothing outside their
countries; if people want to save it’s point-
less to save Kwacha’s and Pula’s and Naira’s.
So, these people who all have smartphones
now after they buy a used t-shirt the next
thing they buy is a smart phone. They are all
going to get into Bitcoin and I think it’s going
to become the International currency. It’s
going to replace the dollar because in order
to have dollars you essentially need banks
and banks in these third-world countries are
almost as bad as the currencies themselves.
So, I’m even though Bitcoin has gone from
$20,000 to down to what 6500 today I guess
something like that.
Shelly Kraft: It’s over 7,000 today.
Doug Casey: Oh it’s up, good, I haven’t
checked. Well, excellent. I’m cautiously opti-
mistic about the future for Bitcoin at least
until version 2.0 comes out but the big thing
one of the most important things about
Bitcoin and the other crypto currencies is
it’s drawing people’s attention to the fact that
the U.S. dollar and all other currencies are
just floating abstractions. And people are
saying, well, wait a minute, why do I have
to own dollars I can own Bitcoin. But since
Bitcoin has another set of problems I think
it’s going to draw a lot of attention to gold
because gold is the only financial asset that’
not simultaneously somebody else’s liabil-
ity and it’s real; it’s tangible unlike a Bitcoin
which has use but gold has more use.
Shelly Kraft: So, what do you see going
forward in terms of like sovereigns, some
are into Bitcoin, some are more into gold.
Where do you think the direction is?
Doug Casey: My guess is that Bitcoin
probably hit the bottom at around $6,000
and it’s probably going to go back up. Now
whether that’s a dead cat bounce or we’ve just
had another pullback in a long bull market,
I’m not exactly sure. But the fact that Bitcoin
www.stocknewsnow.com
is hurting confidence in the dollar drawing
attention away from the dollar eventually
this is going to draw attention towards gold.
So, I guess I’m bullish on both Bitcoin and
gold and I own both.
Shelly Kraft: What do you see in gold
particularly trading in around 1200 and
change down from its high, it’s sort of lev-
eled off at this point, where do you see it?
Doug Casey: That’s a good question, we
have to look at how much gold is there in
the world, maybe six billion ounces have
been mined since the dawn of history most
of it almost all of it’s still exist in someplace.
In other words, that’s less than an ounce of
gold for every man woman and child on the
planet, that’s one argument for gold being
higher. But look we need a reliable money in
the world and the dollar is no longer reliable
money because the U.S. government is creat-
ing them, has been creating them since 2007
by the trillions. And when the economy goes
back into a recession, well, it’s not going to
be a recession; it’s going to be much, much
worse than a recession. Later this year, next
year, it’s long overdue. The dollar’s going to
lose value rapidly where are people going to
go? Are they going to buy any other govern-
ment currencies? I think not, I think there’s
going to be a panic back into gold.
Shelly Kraft: So, you would be advising
if you had clients, you would be advising
them to buy Bitcoin, cryptocurrencies, not
only Bitcoin obviously there’s other crypto-
currencies, and gold at this point?
Doug Casey: Yes, I would. What are your
alternatives? The stock market is in a bubble
and I think it’s rolling over. Real estate is in
a bubble certainly in major cities around the
world and I think it’s starting to roll over.
And the bond market is in a hyper bubble
- that’s the big disaster out there because it’s
bigger much bigger than the stock market.
So, where are you going to put your money?
The only things that are cheap in the world
today are commodities and gold along with
being money in its most basic form is also
a commodity. So, yeah, I’m very bullish on
gold.
Shelly Kraft: So, what do you do when you
meet someone in the market, like, let’s say
walking around at this symposium and
they come over to you and they say, we’re
longing gold, we’re long crypto currencies
and Bitcoin, should we buy juniors? Is that
something, is that a question you can field?
Doug Casey: Well, foolishly, because I’ve
been playing in the junior part of the mining
market the Exploration Companies and the
Development Companies for 40 years now.
They’re the most volatile class of securities
on the planet. They are not investments
there are speculations, your timing is criti-
cal - that and choosing the right company
because 90% of them are, well, at least burn-
ing matches or worse than burning matches.
But it is now a good time to buy them? I
believe it is, because I’m bullish on gold and
bullish on all the other metals, Uranium,
Nickel, there’s 92 elements in the periodic
table. Now it’s an excellent time to buy these
things and I think it’s the U.S. government
and other governments create trillions and
trillions more dollars. This is - they’re going
to some of them it’s going to flow into this
this - isn’t even a microcap area of the mar-
ket. It’s a Nano-Cap; in fact it’s a Pico-Cap
area of the market. They’re volatile, I like
them, and timing is good. Let’s see, if I can
make ten to one on my money over the next
couple of years. n
For more information about Doug Casey and Casey
Research, please visit: www.internationalman.com
and www.caseyresearch.com
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
MicroCap Review Magazine 113
 F E AT U R E D A RT I C L E
Junior Mining
Why Royalty Companies and Project Generators
A
drian Day Asset Management
is the business name of Global
Strategic Management, a “bou-
tique” asset-management firm founded by
Adrian Day in 1991. The firm was created to
serve the needs of individuals, families and
small institutions who believe in the merits
of investing with a global, value perspective.
In this Wall Street View, our host spoke with
Adrian Day, President of Adrian Day Asset
Management at the Sprott Natural Resource
Symposium 2018 in Vancouver, BC.
Shelly Kraft: So, what are you speaking on
at this conference?
Adrian Day: One of the problems in
the mining business is it’s a very, very dif-
ficult business. For miners it’s very difficult
n BY ADRIAN DAY
ADRIAN DAY ASSET MANAGEMENT
114 MicroCap Review Magazine
because they have to keep replacing the
ounces that they produce and it’s difficult
and expensive to find ounces. For explora-
tion companies, it’s very difficult because
frankly the odds are stacked against you and
you have to keep raising money because you
don’t own anything; it’s an exploration com-
pany. So, I’m speaking on, well, is there a
better way? And I think the royalty business
model; the royalty companies at the high
end against the producers and the prospect
generators, the business prospect generator
model are better ways of making money in
this business.
Shelly Kraft: And why is that?
Adrian Day: That’s a huge subject as
you know - royalty companies essentially
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give money, invest money and it can be in
producers, it can be in development com-
panies or even in exploration companies.
But they invest money in these companies
in exchange for a piece of a pie in exchange
for royalty when they produce. The benefit
of the model is that they never have to deal
with the problems; now things can go wrong,
of course, if the mine never comes into pro-
duction they never get their royalty. But they
don’t have to deal with the governments;
with the NGOs; with the mine collapse;
with the wall collapses; with the flooding’s
of mines; they don’t have to deal with the
unions; they don’t have to deal with all of
that. And so of a business via royalty model
tends to be a much lower risk business model
and therefore a lower risk investment.
Shelly Kraft: But at the same time you
must agree that they have to do a very spe-
cial level of due diligence to find the right
people to invest in.
Adrian Day: Absolutely, due diligence
of course is the key to their investments.
They are making investments just as you
and I when we invest our money are mak-
ing investments and they do an incredible
amount of due diligence to make sure that
they think the property is going to be what
they think it is going to be. Also very impor-
tant is the way they write these contracts.
So, some contracts for example when it’s a
huge investment, Cobre Panama, which is a
cup of mine being built by First Quantum in
Panama, believe it or not, Franco Nevada has
a royalty on the silver off take on the silver
stream. And, sorry, they have a stream on
the silver production a huge investment 1.2
billion dollars and they wrote the contract.
So, they staged those investments depending
on the hurdles that First Quantum had to
meet. So, that was a clever way of minimiz-
ing their risk but still getting the exposure.
Shelly Kraft: So, obviously for full disclo-
sure, do you own any in that company?
www.stocknewsnow.com
Adrian Day: Oh yeah, Franco Nevada I
own personally my family owns but it is also
our largest position in the money manage-
ment firm of a clients. I’ve always said to
people if you want to own one gold stock it’s
Franco Nevada. And we can talk more about
Franco if you want but, yeah, I own it. In
fact any company that I mentioned favorably
here we’re going to own.
Shelly Kraft: So, let me ask you a ques-
tion on if a prospect generator or a royalty
arrangement with a company exists and
that underlying company is then taken
over, does the royalty move with the new
company?
Adrian Day: Yeah, good point, the royal-
ties are always on the property. Streams,
which are something a little different, the
streaming model was developed by Silver
Wheaton originally now Wheaton precious
metals, which we also own, and a stream is
a little bit different from a royalty. Streams
sometimes are with the company so you
have to be very careful about that. With a
royalty you’re basically looking at the ground
so you’re looking at the geology and of
course the politics but you don’t worry too
much I’m exaggerating a little bit about the
company.
Shelly Kraft: So, I always looked at pros-
pect generators or sometimes called proj-
ect generators as literally having a diversi-
fied portfolio in an exploration portfolio.
Do you agree with that statement?
Adrian Day: Yeah, no that’s absolutely
correct and that’s really the main reason that
I like and when you’re looking at a tradi-
tional exploration company, typically, unless
you’re looking at a very large one; typically
they have one or maybe two projects but
they’re developing. So, your risk is very, very
focused with a prospect generator you might
have anywhere from 10, 20, 30, different
properties that they own. So, I like to save it
instead of having all of one lottery ticket you
have a piece of lots of lottery tickets. So, your
odds of having a success are much greater.
Shelly Kraft: Does the price of gold cur-
rently down from its hights, I’ll say that
kindly, does that price of the underlying
commodity have the same effect on a pros-
pect generator then it would on a single
exploration company?
Adrian Day: Yeah, it definitely has an
impact; it has an impact because first of all
it makes it more difficult to more expensive
to raise money both more difficult and more
expensive to raise money. And prospect
generators still need to raise money they
just don’t need to raise as much as often as
exploration company. Certainly, when the
price of gold is down if you look last year the
year before, the senior companies very few
of them were interested in doing deals with
the prospect generators. So, yeah it does
affect them, there’s no question. But the key
to me is that because of a prospect generator
model, which we could talk about for four
hours because of a prosperous generator
model these companies are more able to
withstand a downturn because of the capi-
tal structure. A prospect generator doesn’t
blow his brains out on a single property. So,
they tend to be better financed they tend to
have better balance sheets. Other people
are spending the money the famous OPM.
Other people spend the money on develop-
ing the projects - exploring and developing
the projects, and so in a downturn there
may be less money spent on that projects
but they still had their own balance sheet to
keep going. n
For more information about Adrian Day and
Adrian Day Asset Management, please visit: www.
adriandayassetmanagement.com
Note: This article is not an attempt to provide invest-
ment advice. The content is purely the author’s per-
sonal 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 invest-
ment professional.
MicroCap Review Magazine 115
 The Premier Event in MicroCap Finance
April 30–May 2, 2019
Bally's Las Vegas Hotel & Casino

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MicroCap Review Magazine 117
accoUnTinG cornEr coLUMn on paGE 21