DD Support Board and Research Team

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OTC Markets February Newsletter:

OTCQB CEOs and CFOs Strongly Support Creating a Better OTCQB Venture Stage Marketplace
OTC Markets Group recently conducted a survey of OTCQB® and OTCQX® U.S. companies regarding planned improvements to the OTCQX and OTCQB marketplaces and ways we can improve the marketplaces and enhance shareholder value for the companies that trade there. Below are the results of the survey, which were shared in an e-mail notification to issuers this month.

Profile of Respondents
• Over 70% of respondents are CEO or CFO of their company.
• A majority identified their company’s primary marketplace as OTCQB; only 15% identified their marketplace as FINRA’s OTC Bulletin Board (“OTCBB”).
• Over 80% have market capitalizations = $50 million; 40% have market capitalizations = $10 million.
Aggregate Responses
• Over 60% of respondents believe their company will be listed on NYSE or NASDAQ within five years. Based on historical figures, the likelihood is that approximately 10% will achieve this goal, indicating that most OTCQX U.S. and OTCQB officers are aspirational and optimistic about their future growth prospects.
• 85% of respondents indicated they would like a marketplace with moderately high standards, but with a lower-cost compliance process. Only 2% said they would like to see low or no standards or qualifications.

Overwhelmingly, respondents stated the two biggest problems investors have with the OTCQB and OTCBB marketplaces are: (1) too many stock promoters and (2) too many shells and distressed companies.[color=red][/color]
The top most suggested improvements to make OTCQB a better marketplace were: (1) timely disclosure of material information, (2) verification of reporting status, (3) verification of shares outstanding, (3) disclosure of promoters, and (4) disclosure of shareholders.
75% of respondents believe company performance is the most significant driver of share liquidity.
Detailed short sale data was the most requested feature or product by companies followed by free real-time Level 2 quotes for investors and the ability to communicate directly with their market makers.
61% of respondents said they would be willing to pay a fee for a better OTCQB venture stage marketplace, while only 9% said they wouldn’t mind continuing to trade for free on OTC Pink®.

Sample of Individual Responses

What does OTC Markets Group provide that you find most valuable?

“A public marketplace for trading of our securities and access to capital sources”
“Ability to see quotes and purchase shares in the US”
“Access to the US investor at a cost that is much more manageable then the NYSE MKT”
“Blue Sky service, availability of OTC Markets Group representatives, website”
“Exposure to investment community and VC Funds and industry leaders in the business sector we are in”
“Greater access to capital compared to being private”
“In our bid to up-list the trading volume has been a very useful tool”

Compared to an exchange, what does OTC Markets not offer that you wish it did?

“The reputation of more mature exchanges”
“More disclosure on a company's reporting status to separate the distance between OTC”
“A level of confidence and trust in our company that comes with being listed on NASDAQ or NYSE”
“Because it is not an exchange, it is difficult to comply with state blue sky laws”
“Access to retail brokerage networks who are forbidden from buying OTC stocks or who have a high compliance burden to recommend to clients”
“Reputation of listed company”
“More disclosure on a company's reporting status to separate the distance between OTC”

Thank you to the 200 OTCQB and OTCQX companies who participated in the survey. We value your detailed feedback and look forward to working with you as we improve the OTCQX and OTCQB marketplaces for your company and investors.