MicroCap Review Summer 2020 by Planet MicroCap Review Magazine

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The Official Magazine of the MicroCap Stock Market Since 2006

summer 2020

10 Dyadic International, Inc. NASDAQ CM: DYAI Mark Emalfarb, CEO

FEATURED ARTICLES 24

Global IT Spending Expected to Decline in 2020; But the Cloud Will Continue to Grow By Ralph Garcea, P.Eng, MBA

The World of Biotechnology and COVID By Jason H. Kolbert, MBA

Playing the Pandemic as a Fundamental Investor By Sam Namiri, MBA

Q&A with Marcum BP By Drew Bernstein, CPA

Aussies: Coming to America 48 Awesome www.SNN.Network By Richard Revelins

Delicious The American Medical Association’s Commitment to Health Justice in the United States By Aletha Maybank, MD, MPH

Hong Kong Market Remains Vibrant Amid Global Chaos By Leslie Richardson Facebook

The Summer of COVID-19: Considerations for Public Companies By James M. Jenkins, Esq. and Alex R. McClean, Esq.

Biotech’s Future Shines Bright Slash Dot By Seth Yakatan, MBA and Karl Schmieder, MS/MFA

Discovering a Wealth Creator Portfolio By Maneesh Nath

Flickr Junior Sector Renaissance Twitter A Burgeoning By Gavin Wendt

Post COVID-19: How Much Will it Cost to 102 Should Unicorns Take A Page from the Protect My Remote Workforce? Small Cap Direct-to-Market Playbook? By Eric Freeman By Jason Paltrowitz MySpace StumbleUpon Digg

Defy Industry Norms: A Case for Board Diversity By Grace Reyes, MBA

Invest Through Crises, Not In Reaction To Them Mixx By Maj Soueidan Skype

Technorati

How Series Limited Liability Companies Allow Investors to Fractionalize Alternative Assets By Grant Harvey and Lou Bevilacqua, Esq. FriendFeed YouTube

Retweet R&D Tax Incentive Amendments Back in the Spotlights By Claire Aitchison

104 The Energy of Money By Julie Foucht

see story paGe 22

o  6 MILLION GOLD RESOURCES UNDER CONTROL o  62,000 hectares Mining Rights package already produced 6.7Moz Au over last 140 years o  Mul@ple open-pits and shallow underground mines to feed through one central processing facility o  Our gold resources have high grades and all within 400m from surface o  Over 130 years of physical produc@on data digi@zed to generate sniperaccuracy drilling targets o  Produc@on to start in late 2021 from mul@ple open-pits, feasibility study completed, only a 9 months construc@on phase o  Dual-listed on OTCQB with DTC Eligibility completed

THETA GOLD MINES LIMITED (ASX: TGM, OTCQB: TGMGF)

Fully Permi+ed Produc/on Facility and Footprint

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or the forty years I’ve been involved in the financial markets, I’ve seen something new happen every day. I try and learn something new every day. In a way, nothing surprises me anymore. 2020 began so special with our first grandchild coming into this world on January 16, what a blessed experience! And then… the pandemic, the novel corona virus, Covid-19 hits and, just like that, America, the richest, most powerful nation in the world, shuts down. The gains from years of a bull market disappeared in a few days, blowing through circuit breakers and, shortly thereafter, the economy goes into recession! Unemployment reaches depression-era numbers and “Business as we know it became business as we knew it!” The majority of state governor’s issued orders for non-essential workers to shelter in place. Most of America remains home, watching TV and viewing police brutality against George Floyd in Minneapolis, followed by the chant by protesters around the world of “Black Lives Matter.” The thread of systemic racism has been exposed to mainstream America, once again. And this is all happening in an election year! In the financial community, we need to recognize the need for diversity and to be more inclusive. The hope is that America will listen and change occurs. I regret it has taken us this long to change, but we all must start somewhere. We can do better with increased education and greater awareness. I have said many times, “One day we will all be patients!” I was originally referring to the biotech, life sciences and healthcare industries, as they were developing into the ultrafollowed, investor darling and dynamic sector for treatments, cures, diagnostics and medical devices that will improve and save our lives. My words now echo our hopes and prayers for us all: when will we have a vaccine and a fool proof instant test, adequate supplies, and the knowledge for future prevention? You will find many of these companies inside this

E D I T O R I A L issue for your review. The other sector of note in this issue is the resource sector: gold, silver and other base metals are reaching daily new highs and taking the stock prices of explorers, developers and producers right up with them. MicroCap Review Magazine is also going through changes. This is our first digital-only issue: we have eliminated printed copies as we have become a green company, and we thank our subscribers for switching to digital from print. MicroCap Review Magazine is still where our readers access new ideas, great discoveries, investment opportunities, profiled companies, expert opinions from thought leaders and featured articles on poignant topics, and this will continue. Covid-19 has shut down in-person conferences, road shows and investment travel, and the virtual world has bloomed, or should I say Zoomed. SNN pivoted to virtual conferences, which resulted in unexpected new growth and increased online services for issuers, IR firms and investor access. I am writing this editorial from my executive kitchen table, like many of us who are working remote. No doubt we all missed not being able to attend the Planet MicroCap Showcase in Vegas, originally scheduled for April, but hopefully we will reconvene in April 2021. Many of us have paid the highest price possible: loss of family members, friends or associates. Please accept the deepest, most heartfelt sympathies and condolences from all of us at SNN Inc., and thank you all for your continuing support, readership and following. I speak for SNN Inc., and the rest of us, when I thank the courageous first responders, frontline doctors, nurses, support people…the entire ecosystem of essential individuals throughout our service industries, manufacturing and processing plants across America – thank you, thank you, thank you. Please remain safe, wear masks, safe distance where you can, and wash your hands! Sincerely yours, Shelly Kraft, Publisher n

This publication and its contents are not to be construed, under any circumstances, as an offer to sell or a solicitation to buy or effect transactions in any securities. No investment advice is provided or should be construed to be provided herein. MicroCap Review Magazine and its owners, employees and affiliates are not, nor do any of them claim to be, registered broker-dealers or registered investment advisors. This publication may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking statements of or concerning the companies mentioned herein are subject to numerous uncertainties and risk factors, including uncertainties and risk factors that may not be set forth herein, which could cause actual results to differ materially from those stated herein. Accordingly, readers are cautioned not to place undue reliance on such forward-looking statements. This publication undertakes no obligation to update any forward-looking statements that may be contained herein. MicroCap Review Magazine, its owners, employees, affiliates and their families may have investments in companies featured in this publication, may purchase securities of companies featured in this publication and may sell securities of companies featured in this publication, at any time and from time to time. However, it is the general policy of this publication that such persons will refrain from engaging in any pre-publication transactions in securities of companies featured in this publication until two trading days following the publication date. This publication may contain company advertisements/advertorials indicated as such. Information about a company contained in an advertisement/advertorial has been furnished by the company, the publisher has not made any independent investigation of the accuracy of any such information and no warranty of the accuracy of any such information is provided by this publication, its owners, employees and affiliates. Pursuant to Section 17(b) of the Securities Act of 1933, as amended, in situations where the publisher has received consideration for the advertisement/advertorial of a company or security, the amount and nature of such consideration will be disclosed in print. Readers should always conduct their own due diligence before making any investment decision regarding the companies and securities mentioned in this publication. Investment in securities generally, and many of the companies and securities mentioned in this publication from time to time, are speculative and carry a high degree of risk. The disclaimers set forth at http://www.microcapreview.com/disclaimer/ - disclaimer are incorporated herein by this reference.

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April 20–22, 2021 Bally’s Las Vegas Hotel & Casino PlanetMicrocapShowcase.com www.PlanetMicroCapShowcase.com

CONTENTS F E AT U R E D A RT I C L E S

WWW.SNN.NETWORK summer 2020

The World of Biotechnology and COVID By Jason H. Kolbert , MBA

74 A Perspective on Moats By Kevin Shea

Playing the Pandemic as a Fundamental Investor By Sam Namiri, MBA

86 Investing Internationally, How Easy Is It? By Violet Pagan

Q&A with Marcum BP By Drew Bernstein, CPA

88 Defy Industry Norms: A Case for Board Diversity By Grace Reyes, MBA

Awesome Aussies: Coming to America By Richard Revelins

The American Medical Association’s Commitment to Health Justice in the United States By Aletha Maybank, MD, MPH

COVID-19 Has Accelerated Digital Transformation By Sean Peasgood

Biotech’s Future Shines Bright By Seth Yakatan, MBA and Karl Schmieder, MS/MFA

Discovering a Wealth Creator Portfolio By Maneesh Nath

Proﬁled Companies 9 First Au Limited ASX: FAU 10 Dyadic International, Inc. NASDAQ CM: DYAI 14 B. Riley Financial, Inc. NASDAQ GM: RILY 18 Vaxil Bio Ltd. TSX-V: VXL / PINK: VXLLF 19 Manufactured Housing Properties Inc. PINK: MHPC 20 Esports Entertainment Group, Inc. NASDAQ GS: GMBL

Global IT Spending Expected to Decline in 2020; But the Cloud Will Continue to Grow By Ralph Garcea, P.Eng, MBA

Accounting Corner 33

COVID-Triggered Going Concern Expected to Rise By Corey Fischer, CPA

96 R&D Tax Incentive Amendments Back in the Spotlights By Claire Aitchison 102 Should Unicorns Take A Page from the Small Cap Direct-to-Market Playbook? By Jason Paltrowitz 104 The Energy of Money By Julie Foucht

50 Converge Technology Solutions 22 Theta Gold Mines Limited Corp. ASX: TGM / OTCQB: TGMGF DTC ELIGIBLE TSX-V: CTS / OTCQX: CTSDF 26 Iconic Brands, Inc. 51 Aviation Mining Solutions OTCQB: ICNB PRIVATE COMPANY 32 Eskay Mining Corp. 54 KNeoMedia Limited TSX-V: ESK / OTCQB: ESKYF ASX: KNM / OTCQB: KNEOF 34 CannAssist International Corp. DTC ELIGIBLE OTCQB: CNSC 89 CURE Pharmaceutical Holding 36 My Size, Inc. Corp. NASDAQ GS: MYSZ OTCQB: CURR 37 Lake Resources, N.L. 90 Quisitive Technology Solutions, Inc. ASX: LKE / OTCQB: LLKKF TSX-V: QUIS / PINK: QUISF

Asia Corner 56 Hong Kong Market Remains Vibrant Amid Global Chaos By Leslie Richardson

Legal Corner 62

Family Ofﬁce Corner The Global Pandemic may Change Family Office Investment Strategies By Karl Douglas www.SNN.Network

94 How Series Limited Liability Companies Allow Investors to Fractionalize Alternative Assets By Grant Harvey and Lou Bevilacqua, Esq.

21 A2Z Technologies Canada Corp. 38 Emerald Health Therapeutics, Inc. TSX-V: EMH / OTCQX: EMHTF TSX-V: AZ / PINK: AAZZF / FRA: A23

Global IT Corner 24

92 Invest Through Crises, Not In Reaction To Them By Maj Soueidan

Resources Corner 78

A Burgeoning Junior Sector Renaissance By Gavin Wendt

Cyber Security Corner

The Summer of COVID-19: Considerations for Public Companies By James M. Jenkins, Esq. and Alex R. McClean, Esq.

Market Maker Corner

108 H2 Energy Now By Sonya Davidson

Glendale Securities, Inc. By Eric Flesche

Post COVID-19: How Much Will it Cost to Protect My Remote Workforce? By Eric Freeman

Startup Company Corner

MicroCap Review Magazine

The Next Generation Financial News and Investing Portal is Coming Soon

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asx: Fau

P R O F I L E D C O M PA N Y

First au limited

ow do you find a gold mine? It might sound a little obvious, but how about going somewhere gold has already been discovered and mined and a lot of it. Junior Australian listed gold explorer First Au Limited (ASX: FAU) recently announced it had entered into an agreement to acquire an 80% interest Victorian Gold Pty Limited (“VicGold”) which holds applications making up the Victorian Goldfields Project, located in Eastern Goldfields of Victoria covering some 1,400 square miles. Victoria’s first gold rush started in the Clunes Goldfield in July 1851, about 3 years after the California gold rush, and quickly spread to the Ballarat, Castlemaine and Bendigo areas. From 1851 to 1896 approximately 61 million ounces of gold was mined in Victoria. As the surface alluvial gold ran out the miners were forced to venture underground. Historical alluvial and reef mining continued from 1860s to the 1890s until a combination of factors, including technical limitations at the time, air quality and water issues halted further production. VicGold geologists were the first movers in the Eastern Goldfields to take advantage

of new Victorian Government Geological Survey data and together with their own studies identified geology, structure and gold events in the entire region as being prospective for structurally controlled “orogenic” gold systems, akin to the Fosterville and Bendigo style. The Fosterville Gold Mine, operated by Toronto Listed Kirkland Lake (TSX: KL), is one of the highest grade and most profitable gold mines in the world. The mine produced 619,000 ozs of gold during 2019 at a cash cost of $119 per oz and an All In Sustaining Cost (AISC) of $219 per oz. Fosterville has current gold resources reported of 2.1m ozs at a grade of 21.8 g/t. Whilst the Victorian Gold Project is at a very early stage of exploration, the VicGold geological team is encouraged by historical reports which show multiple high-grade lodes which remain untested at depth. VicGold geologists have develop their “Orocline Gold Model” which asserts that that the Eastern Goldfields region is believed to be an extension of the Fosterville/Bendigo zone, meaning that the geology and structure has been folded and bent in a particular direction so that the same body of rocks and geological sequence are observed throughout the Victorian Gold Project. This has now been confirmed by the Geological Survey of Victoria. Again, it should be emphasized that exploration has hardly scratched the surface and there has been very limited drilling and certainly none to any depth where this

Anatomy of a New Gold Discovery

style of ore body would expect to be encountered. VicGold’s “boots on ground” approach has identified many mafic intrusions which are visible in the old underground workings and consistently high-grade rock chips and intersections have been reported.This is the beginning of the adventure and only detailed exploration and drilling can confirm the if economic gold mineralization can be confirmed. Last year First Au announced its maiden, JORC defined gold resource at its flagship Gimlet Gold Project, near Kalgoorlie, western Australia of 642,00o t @ 3.3 g/t Au for 69,000 ounces of gold. VicGold offers First Au a new foothold and extensive land position in yet another historically significant gold mining region. n Disclosure: Richard Revelins is an Executive Director and shareholder of First Au Limited Please visit the company’s website for more information: www.firstau.com.au. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur. The company paid consideration to SNN or its affiliates for this article.

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nasdaq cm: dyai

C O V E R S T O RY

dyadic international, inc. The Global Quest for A Vaccine Drives Dyadic’s C1 Adoption

ovid-19 continues to wreak havoc across the nation, and the rest of the world. Unemployment is sky high, economies are teetering on depression and citizens are too fearful of the disease to even contemplate a return to life as normal. The commonly accepted solution to this coronavirus would be a vaccine, allowing citizens to return to life as normal, and pharmaceutical companies across the planet are in a desperate chase to develop a working vaccine for Covid-19. Thankfully progress is being made on many fronts.

Mark Emalfarb, CEO

MicroCap Review Magazine

But, it’s not just enough to create a vaccine. There are over 8 billion humans on earth and, in order to get the pandemic under control, it’s going to require massive production of vaccines on a scale never before seen and at a low enough cost to affordably distribute the cure on a global basis. It is this desperate need for faster, cheaper production of biologics that is pushing the governments of western countries to pursue their own vaccine strategies in parallel with the private sector. And, in the case of the US, the EU and Israel, major government organizations are collaborating with Dyadic (Nasdaq: DYAI) as a possible solution to the dual issue of developing mass production of a SARS-CoV-2 vaccine at a reasonable price. Dyadic has been reengineering its industrially proven hyper-productive gene expression platform for the manufacturing of biologic vaccines and drugs for several years now. The existing process of producing biologics in CHO (Chinese Hamster Ovaries) has been around since the early days of the biotech industry. It’s a known commodity, but it and other existing cell lines currently being used to produce biologics such as E. coli, baculovirus and yeast have certain flaws. These are particularly evident in the limited production quantities that can be created and, in particular, CHO cells translate into longer and more expensive biomanufacturing processes. In the pharmaceutical world, until now, cost of production hasn’t been a gating factor. However, the need to address Covid-19 is changing that and, in

the process, potentially driving the adoption of Dyadic’s C1 platform.

can dyadic accelerate the production and reduce the costs oF BioloGics? Dyadic International is a progressive and interesting company in more ways than one. Founded by Mark Emalfarb in 1979, this commercially proven gene expression company has its roots in industrial biotechnology where Mark Emalfarb pioneered the use of pumice stones & cellulase enzymes in the stone washing of blue jeans. It was in the early 1990’s when Russian scientists employed by Emalfarb, discovered the Thermothelomyces heterothallica fungus (formerly Myceliopthora thermophila), which the Company named C1. Over the past two decades, the C1 technology has been developed into a next generation protein expression and production system for gene discovery, development, expression and production of enzymes and other proteins. The journey of how Mark Emalfarb evolved from blue jeans to genetics, turning genes (DNA) into more accessible & affordable medicines, is quite intriguing. I would suggest that, if you’d like to understand this background better, along with gaining an understanding of who Mark Emalfarb is, you should listen to an interview with Mark on SoundCloud.com (The Innovation Show, Episode 48).

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However, for the purposes of this paper, we are going to skip over the early days of the discovery and formulation of C1. Instead, we will look at what is special about C1, how it was successfully adopted in the industrial biotechnology industry, and how it is being developed as a potential game-changing protein expression and production system for use in the animal and human biopharmaceutical industries.

What is a protein expression and production system (“Gene Expression System”)? Protein make up about 15% of the mass of the average human. Protein molecules are essential to us in an enormous variety of different ways. Much of the fabric of our body is constructed from protein molecules. Muscle, cartilage, ligaments, skin and hair - these are all mainly protein materials. In addition to these large-scale structures that hold us together, smaller protein molecules play a vital role in keeping our bodies working properly. Hemoglobin, hormones (such as insulin), antibodies, and enzymes are all examples of these less obvious proteins. Most genes contain the information needed to make functional proteins. The journey from gene to protein is complex and tightly controlled within each cell. It consists of two major steps: transcription and translation. Together, transcription and translation are known as gene expression.

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Protein production is the biotechnological process in which an organism makes proteins. It is typically achieved by the manipulation of gene expression in a cell such that the cell expresses (produces) a recombinant protein. There is a large market for proteins, but how do you manufacture them? Proteins, a biologic, are grown and harvested from cells. This is not done in a petri dish, but in large vats wherein an rDNA for a protein is introduced to an “expression host”. The expression host is an organism that expresses or produces large amounts of the target protein in a fermentation vessel. There are many possible expression hosts including mammalian, bacterial, insect and fungal. Each one has different strengths and weaknesses. The key to a successful expression host is an ability to produce commercial quantities of the desired protein structure and activity with a high yield and low cost. Mark Emalfarb discovered a unique and highly expressive fungal host through his

work in developing a gene expression system for producing enzymes used for a variety of industrial uses such as stone washing jeans, and biofuels. This discovery and subsequent improvements led Mark Emalfarb to what is now called the C1 Technology Platform. Dyadic originally pursued the potentially less lucrative but much easier to enter industrial market for C1. This was a shrewd move and it paid off. Over the years from 1996 through 2015, C1 gained a very strong foothold in industrial biotechnology, winning business with customers and licensees such as Abengoa, DuPont, BASF and Shell Oil. This success validated C1’s ability to produce high-quality enzymes at high yields and purity. Through their efforts, C1 has become a well-regarded expression host in many industrial applications. All of which culminated with the sale of Dyadic’s Industrial Biotechnology business to DuPont on December 31, 2015 for $75 million in cash.

Money in the Bank, Biopharmaceutical Industry Awaits At the time of the sale of the industrial business to DuPont, Dyadic had various options. They could have scaled back research and development and returned a lot of money to investors. Instead, they purchased $ 22 million dollars of the company’s outstanding shares and took a portion of the proceeds from the sale to DuPont to pursue the more expensive, but potentially much more lucrative, field of biopharmaceuticals. Taking a fresh look at the biopharmaceutical industry, the landscape had changed. On a secular basis, there is an ever-increasing focus on the high cost of biologic drugs. Biopharmaceutical companies were selling billions of dollars of lifesaving treatments for patients suffering from debilitating diseases. However, the expense of developing and producing these biotherapeutics has priced many people in developed nations out of the market for these therapies; and they are all but impossible to afford in the less developed countries, where many of these sufferers reside. This desire to make drugs less expensively comes at a time when the whole healthcare industry is under growing pressure from insurers, regulators and the public at large to reduce prescription drug costs. In the eyes of many, the cost of healthcare has gotten out of control across the World and big pharma is seen as the primary culprit. Biologic drugs already make up ~ 40% of prescription drugs and are not only the fastest growing segment of prescription drugs, but also the most expensive drugs.

The Biotechnology Bottleneck The Covid-19 pandemic highlights the inefficiencies of the pharmaceutical industry and the bureaucracy, politics and red tape within the federal government to effectuate real disruption in the manufacturing of biologic vaccines and drugs.

MicroCap Review Magazine

Despite President Trump’s Executive Order # 13887 “Executive Order on Modernizing Influenza Vaccines in the United States to Promote National Security and Public Health” nothing seems to change. The Executive Order clearly indicates that the current technologies used to manufacture vaccines are insufficient to meet the response needs in the event of a pandemic, which can emerge rapidly and with little warning. The Order clearly points out a need to “diversify domestic vaccine-manufacturing capacity to use innovative, faster, and more scalable technologies, including cell-based and recombinant vaccine manufacturing, through cost-sharing agreements with the private sector, which shall include an agreed-upon pricing strategy during a pandemic.” Further, it calls for “Support, in collaboration with the DOD, BARDA, and CDC, of applied scientific research regarding developing cell lines and expression systems that markedly increase the yield of cell-based and recombinant influenza vaccine manufacturing processes.” With governments laser-focused on this issue of improving production yields and lowering costs, one can assume that they have access to all the latest developments in biologic manufacturing. Thus, when Dyadic was selected by the Frederick National Laboratory to engineer its patented and proprietary C1 cell lines to produce a number of Covid-19 vaccine candidates which will be utilized by the Vaccine Research Center (VRC) part of the National Institute of Allergy and Infectious Diseases (NIAID) and at the National Institute of Health (NIH), it was a resounding endorsement for the potential game-changing technology of C1. It’s not only the NIH, which is simply the latest government backed organization indicating that C1 has the potential to be one of their potential production platforms; NIH’s endorsement follows on the heels of C1 programs such as ZAPI, and the C1 Covid-19 vaccine collaborations in conjunction with ZAPI scientists from University Utrecht, TIHo University and Erasmus

Medical Center, and the Israel Institute For Biological Research (IIBR). ZAPI, (Zoonotic Anticipation and Preparedness Initiative), is a division of the Innovative Medicines Initiative (IMI) which is run by the European Union in partnership with the European pharmaceutical industry. ZAPI brought together experts in human and animal health to create new platforms and technologies that facilitate a fast, coordinated and practical response to new infectious diseases as soon as they emerge, Dyadic has been involved with ZAPI since 2015. IIBR, the Israel Institute for Biological Research, was established in 1952 as a governmental research institute, founded by a group of scientists from the IDF Science Corps and from academic organizations. Dyadic and the IIBR began their collaboration in January 2018 and have previously developed a proprietary enzyme, the recombinant IIBR Fc-fusion enzyme that provided longer lasting protection against nerve agents such as sarin and VX gas than Acetyl Choline Esterase, which is commonly used. In February of this year, Dyadic announced that they were joining the global fight against the coronavirus outbreak by expanding their collaboration with the IIBR. These organizations and scientists are some of the best and brightest in the infectious disease industry and they are all government funded with deep pockets. By working with all three, Dyadic has completed a trifecta of impressive relationships; the governments of Europe, Israel and now the US are all working with C1 to accelerate their vaccine development programs.

Beyond Vaccines, Other Avenues Are Progressing as Well While vaccine development is driving adoption at this time, there is also a race going on for the cure. Prevention is best, but what happens when someone has the disease? In addition to vaccines, C1 has the potential to produce monoclonal antibodies (mAbs) in

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high amounts more rapidly than using CHO cells or other production methods. In fact, the data derived from Dyadic’s research collaborations with top-tier big pharma companies shows that the mAbs produced from C1 bind and neutralize equally to those produced from CHO cells. Thus, the same productivity advantages for C1 exists in mAbs as in vaccines; more rapid manufacturing processing of greater amounts of lower cost mAbs to treat diseases including Covid-19. C1’s productivity also has the potential to provide even greater benefits for biologic vaccines and drugs for use in animal health, both for farm animals and companion animals. As opposed to drugs for use in humans, in animal health, the cost of manufacturing is much more important. Dyadic is already in collaboration with and receiving research funded from all four of the largest global animal health pharmaceutical companies. This work is ongoing, and Dyadic expects to see a number of animal health products entering the market as the collaborations continue to progress.

The Corona Virus is Pushing Dyadic Towards the Goal Line From an investor standpoint, this is certainly an exciting time. Until recently, Dyadic, which has several years of cash on its balance sheet with no debt, had been an interesting stock but investors were rightly concerned about when things would begin to gel for the Company. Now Covid-19 has permanently altered and potentially sped-up the timeline for the development of a vaccine produced from Dyadic’s C1 technology. Because Covid-19 is bringing greater attention and focus on the need to make a vaccine cheaper, faster and in greater volume, Dyadic suddenly finds itself incredibly well positioned in the eye of the storm. Investors have been waiting to see Dyadic get a biologic vaccine and/or drug produced from C1 into human trials. While it appears that C1 is going to be a safe platform for

protein manufacturing, until it actually is approved to go into man, there would be nagging questions and valuation would suffer. Before Covid-19, it was anyone’s guess as to when a C1 produced vaccine and/or drug would be used in a human trial. Now the answer is simple. If animal tests of a SARSCoV-2 vaccine based on C1 are proven safe in the upcoming months, human trials should follow. C1 could be entering human trials sometime in early Q4 of 2020. Just entering human trials will be a major hurdle cleared for Dyadic and should spark a complete revaluation by the market. It is widely known that C1 is cost-effective and incredibly productive…but safety comes first with the FDA. Getting a clean bill of health, like C1 achieved in 2009 with the FDA Generally Recognized As Safe “GRAS” notification for use in manufacturing food & feed enzymes for Dyadic’s industrial biotech business, is a potential game-changing event that should speed the adoption and use of C1 for producing biopharmaceuticals. Beyond simply entering humans, there’s a more than reasonable chance that a vaccine based on C1 could prove to be the most efficacious one in the market. Most of the vaccines in development that you hear about in the press are based on RNA or DNA. These vaccines are similar to gene therapy in that they are put into cells in an effort to induce production of anti-bodies. Interesting, but can they succeed? We certainly hope so, but keep in mind that there are currently no FDA approved DNA or RNA vaccines for any pathogen. Meanwhile, the C1 expressed vaccine candidates being tested are all based on the recombinant protein (antigen) method. This is a tried and true methodology of vaccine production and certain experts believe this method stands a higher likelihood of success in preventing Covid-19. If a Covid-19 vaccine is commercialized using C1 in the manufacturing process it could be wildly profitable for the Company. The world is desperate for a vaccine for Covid-19 and a return to normalcy. Economies are suffering and people are

dying. A vaccine cures all this and that’s why there’s a huge rush to develop a safe and effective vaccine as soon as possible. But, simply coming up with the solution is not enough, it needs to be produced in sufficient quantities and at a low price such that it can help the 8 billion inhabitants of planet earth. Existing manufacturing processes appear to fall short in their ability to produce the required doses of vaccines the world might need, forcing governments to make difficult decisions regarding allocations within and beyond their borders. This, at least initially, begs the question of whether any country will have enough doses for their own population. Backed by the deepest pockets in the world, i.e. the US government, Dr. Anthony Fauci is driving vaccine development towards the goal line. He has made it clear that time is of the essence and no holds are barred in this quest. Having recently collaborated with the Frederick National Laboratories, Dyadic has brought their C1 platform onto the playing field. Humanity can only hope that Dr. Fauci pushes a vaccine over the goal line. Investors would be wise to consider that Dyadic could very well be in the end zone. n Please visit the company’s website for more information: www.dyadic.com. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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MicroCap Review Magazine

nasdaq Gm: rily

P R O F I L E D C O M PA N Y

B. riley Financial, inc. Good News: Small and Micro-Cap Stock Picking is Back â&#x20AC;&#x201C; and There Will Be Big Winners

avigating Small Cap Value Opportunities as COVID-19 Recovery Clashes with Economic Reality The COVID-19 crisis has created a historical level of small-cap stock underperformance relative to the broader market. Underperformance of the Russell 2000 has become more pronounced as big tech drives broad market returns, thus creating an increasingly attractive market for small and micro stock pickers. History shows us that small-cap names tend to outperform in the early stages of

market recoveries, and with the Russell 2000 outperformance in April and May 2020, there is a silver lining for certain small-cap winners as we look ahead. The shoe hasnâ&#x20AC;&#x2122;t quite dropped for smallcap company earnings yet. This means the current environment will inevitably create some losers too. Market sentiment has been heavily weighted toward a V-shaped recovery. The day-to-day reality is that investors

iShares Russell 2000 ETF FY20 and FY21 Earnings Revisions vs. Index Price (since January 2019)

140 130 120 110 100 90 80 70 60

Russell 2000 Randy Binner, MBA

MicroCap Review Magazine

S&P 500

Source: FactSet and B. Riley FBR Research

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Russell 2000 vs. S&P 500

SELECT POST-COVID WINNERS

(indexed since January 2019)

$10.0

$180

$9.0

$160

$8.0

$140

$7.0

$120

$6.0

$100

$5.0 $80

$4.0

$60

$3.0

$40

$2.0

$20

$1.0 $0.0 Jan-19 Mar-19 May-19 FY20 EPS est.

Jul-19

Sep-19 Nov-19

FY21 EPS est.

Jan-20 Mar-20 May-20

iShares Russell 2000 ETF Price (rhs)

Source: FactSet and B. Riley FBR Research

seem increasingly de-sensitized to bad economic and healthcare news and are focusing heavily on state-level re-opening procedures and overall sentiment surrounding an economic recovery â&#x20AC;&#x201C; but this is a risky hand-off. Stock selection must consider defensive and relative risk-reward profiles carefully. COVID-19 related sentiment may be driving the market, but investors should be careful in using this data to price stocks. Earnings remain a reliable indicator of equity valuations â&#x20AC;&#x201C; and EPS is moving lower for both the S&P 500 and Russell 2000. We estimate a 2021E price-to-earnings ratio (P/E) of 19.9x and 26.1x for the S&P 500 and IWM (iShares Russell 2000 ETF), respectively, which is historically expensive. Year-to-date, S&P 500 and small-cap (IWM) stocks have seen FY2020 EPS estimates revised downwards by 29% and 75%, respectively. Since mid-March, small-cap equities have partially rebounded with the broader market, despite additional downward earnings revisions.

No sector is immune. Recoveries will vary dramatically. Retail survivors will pick up share. At B. Riley Financial, our perspective on the impact to the retail and consumer sector is firsthand. Our Great American Group affiliate, which specializes in retail liquidations and asset valuation, participated in over 3,900 store closings and several retail rehabilitation projects in 2019. We expect significant closings and bankruptcies on the other side of COVID-19. We believe certain publicly traded companies with access to capital and liquidity will emerge in a landscape where many private small business competitors do not survive. This should enable large market share gains, better access and cost around real estate. Chicos FAS, Inc. (CHS) is a well-established missy retailer that screens well in our liquidity analysis with >20x annual interest coverage and estimated liquidity of ~$300

Current Credit Spreads Discounting 2011 and 2016, Rather than 2008, Scenario (ICE BofA Corporate Index Option-Adjusted Spreads Across Credit Ratings)

4500 bps 4000 bps 3500 bps 3000 bps 2500 bps 2000 bps 1500 bps 1000 bps 500 bps bps

AAA

12/16/2008

A 10/4/2011

BBB

BB 2/12/2016

CCC & Lower

5/29/2020

Source: St. Louis Federal Reserve and B. Riley FBR research

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MicroCap Review Magazine

finance from George Washington University and his B.A. in history from Colorado College.

COVID-19 related sentiment may be driving the market, but investors should be careful in using this data to price stocks. million, which equates to the ability to keep stores closed for another 15+ weeks. MarineMax, Inc. (HZO) is a recreational boat dealer that appears to be picking up market share. Boat sales are inflecting positive for summer 2020 as boating is a social distancing friendly, and family activity. Financials sector companies’ credit risk for this cycle may not be over. Investors should be selective on balance sheet risk and favor yield. Credit spreads are now well inside of 2011 European debt crisis and the 2016 energy market swings – and a world away from 2008 levels. The Fed has been the support for the credit market rally, but this type of intervention leaves open the risk of another move out in spreads, which would be accompanied by another leg down in smaller cap credit sensitive names. BayCom Corp (BCML) is a Bay-area bank with an attractive core deposit franchise (34% non-interest bearing) and valuation at 7.2x our 2020E EPS, a 35% discount to peers. While the near-term credit outlook remains challenging for all banks, we see good risk adjusted upside here and with a strong capital base, management is buying back the stock. Global Medical REIT, Inc. (GMRE) While many REITs have suspended dividends, we see the 8.4% dividend yield as sustainable, given the relatively defensive profile of healthcare properties. Jernigan Capital, Inc. (JCAP) is a defensive self-storage REIT with a strong liquidity position. Occupancy is up over 6% year-todate, and we believe counter-cyclical drivers of demand will continue to drive lease up. There is currently a 7.5% dividend yield based on the current stock price. Select Healthcare names are set to grow revenue in the post-COVID era. Post

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COVID-19, we believe that U.S consumers will likely be more aware than ever of the need for health coverage and advanced medical technologies. OptimizeRx Corporation (OPRX) is a digital health messaging company providing virtual solutions for the life science industry. While COVID-19 is impacting/disrupting the industry, OPRX is benefiting from the industry’s immediate need to migrate to virtual solutions with management noting during its 1Q20 call that it experienced an RFP close rate of 52%. CytoSorbents Corporation (CTSO) is a medical technology company that recently announced that it obtained a label expansion for CytoSorb (CS). CS has been gaining traction as a treatment in critically ill COVID-19 patients; and, thus, the company has materially increased its manufacturing output in recent weeks. As always, time and the horizon ahead will be key. For institutional investors, there is considerable risk of allocating capital at the wrong time in 2020 for 2020 returns, and possibly for 2021. For investors with a 2022 and beyond the horizon, life is easier. We have laid out names here that we see as thematic winners in a post COVID-19 environment that have favorable risk reward around the potential risks of the transition from healthcare recovery to economic reality in the market.

About the Company: B. Riley Financial, Inc. (NASDAQ: RILY) provides collaborative financial services tailored to fit the capital raising and business advisory needs of public and private companies and high-net-worth individuals. The Company operates through several wholly owned subsidiaries that offer complementary end-to-end capabilities, including B. Riley FBR, a leading small and mid-cap focused investment bank that provides corporate finance, research and sales and trading services to corporate, institutional and high net worth individual clients. Investment banking services include initial, secondary and follow-on offerings, institutional private placements and merger and acquisitions advisory services, and corporate restructuring. The firm is nationally recognized for its highly ranked proprietary equity research. Its affiliates include Great American Group, a leading provider of asset disposition, appraisal, corporate advisory and valuation services; GlassRatner, a specialty bankruptcy and litigation consulting firm; and B. Riley Wealth Management, which offers private wealth and investment management services to institutional and high net worth investors. Certain registered affiliates of B. Riley originate and underwrite senior secured loans for asset-rich companies. The Company also makes proprietary investments in companies and assets with attractive return profiles. For more information about B. Riley and its affiliated companies, visit www.brileyfin.com. This piece was prepared on July 20, 2020 and our commentary is based on stock prices and estimates as of that date. For up-to-date disclosures relating to any of the stocks mentioned, please visit: www.brileyfbr. com/disclosures. Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional

www.brileyfin.com n About the Author: Randy Binner is Group Head of Financials and Real Estate equity research at B. Riley FBR. Binner joined the firm’s research team in 2004 and has covered life, health, property/casualty, and mortgage insurers, as well as asset management, REIT, and fintech companies. Prior to joining the firm, he worked at Travelers Insurance Company managing litigated claims. He earned an M.B.A. in

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o Interact with our retail broker/dealer/banking network to facilitate the Company to potential Media Networks and set up small group Dinner.

o Develop plans for aggressive outbound media outreach, when requested, including existing shareholders, potential institutional and retail shareholders to ingest companies media.

o Continue periodic meetings, with locations to be determined, with Media Anchors and Producers.

o Work with management to develop a clear comparison of the firm's results to those of similar companies or competitors;

o Leverage relationships with media and financial journalists to effectively communicate the Company’s message; Including but not limited to, Cheddar, Fox Business News, TD Ameritrade Network, Yahoo Finance, Nasdaq Marketsite, Jane King Media, Modern Wall Street

o Position the management to effectively demonstrate the Company’s strategies and objectives so that companies interviews are clear & effective.

o Work with Company to develop a full release calendar, timing releases and important press announcements for utmost effectiveness; o Coordinate additional relationships with the goal of creating media awareness for the company; hour situational crisis management with a concise strategy. o 24 h Assist in addressing issues such as product recalls, contract losses, regulatory actions, litigation, loss of key employees, and all Major Media actions.

o Pinpointing of the proper media outlets to meet – and even the right individuals within those firms for maximizing interviews. o Monthly analysis of who is watching interviews, along with commentary on the ‘why’ behind these moves. o Context around effective interviews, i.e. how does it pertain to what we are seeing amongst peers, the sector and the broader market. The qualitative analysis that comes from this assessment provides company with insight into why Media Networks are doing what they are doing within their respective sector, allowing them to have more pointed conversations with these Media Professionals and be more efficient with their time spent.

MONEY BALL NETWORKS Money Ball Networks collaborates with premier investment banks, prominent broker-dealers, boutique research firms, and corporate professionals to provide an upscale experience for industry events. Our venues include A-list entertainment, top-shelf food & drink amidst alluring ambiance. MONEYBALLNETWORKS.COM

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tsx-V: Vxl / pink: VxllF

Vaxil Bio ltd. V

Mr. David Goren, CEO

axil Bio Ltd is a Canadian publicly listed biotech company (TSX.V: VXL.V; OTC: VXLLF), based in Israel that develops innovative patented technologies in the fields of cancer and infectious diseases. Our focus is on a novel drug discovery and development platform based on Signal Peptides which the company deploys to fight infectious diseases and cancer. Our most advanced product, ImMucin™, completed a Phase 1/2a clinical trial in multiple myeloma for which it received orphan drug status from the FDA and EMA. Since our founding, we have been granted more than 30 patents with eight additional patent applications pending, including two related to COVID-19. In February 2020, the company identified unique sequences in certain proteins of the virus that causes the COVID-19 disease, which are suitable to Vaxil’s unique signal peptide platform. These sequences are the basis for the development of Vaxil’s vaccine, CorVax™, which was also announced in February 2020. Traditional vaccines aim to elicit antibody production, most commonly a neutralizing antibody that interferes with the viral protein (in this case, spike protein) and the cognate receptor on the target cells. Other vaccines aim to induce the production of antibodies that opsonize the virus to facilitate clearance of the pathogen. Vaxil’s vaccine candidate targets the infected cells and includes both the cell-mediated immunity for rapid response and a humoral (antibody) response as a secondary response. Quick recognition and disposal of infected cells interferes with viral replication and halts further infection of additional cells. Consequently, the

viral load remains low, disease progression is terminated and dissemination of the virus within a population is prevented. In early May 2020, the Company signed a collaboration agreement with The Tel Aviv Medical Center to advance the CorVax™ research program. This agreement provides Vaxil with vital access to Tel Aviv Medical Center’s research resources including their unique bank of biological samples and its advanced research infrastructure. Vaxil is advancing its preclinical program to validate effective immune response. Our preclinical program includes assessing convalescent patient plasma, in vitro cytotoxicity, in vivo immunogenicity and ex vivo T cell proliferation and cytokine release. We anticipate completing this work in the coming months and if successful, we will prepare for and commence our Phase 1 program once receiving approval to do so. If we are successful in proving the safety of our COVID-19 Vaccine in Phase 1, we will continue the development to Phase 2 and 3. Vaxil’s signal peptide platform is more easily and more efficiently scaled up for mass production than other vaccine solutions. For more information: www.vaxil-bio.com n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur. The company paid consideration to SNN or its affiliates for this article.

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pink: mhpc

manufactured housing properties inc. The Antifragile Asset Class

amed statistician and derivatives trader Nassim Taleb, known for writing The Black Swan, first coined the term antifragile in 2012—a term to describe “things that gain from disorder.” Take for example the human body: as you expose its biome to bacteria, its immune system becomes more resilient—as you tear the fibers of its muscles, they grow back denser in short, stressors make us stronger. From an investment standpoint, antifragility is more important than ever. Assets that are profitable in good times, but resilient or strengthened during recessions, provide a rare combination of stability and potential for future growth. With high occupancy and collections amidst the coronavirus pandemic, manufactured housing is one such sector. Manufactured Housing Properties (OTCPK:MHPC) is a growing microcap— the newest of the four publicly traded companies in the sector—positioned to grow a portfolio of recession resilient manufactured housing parks. As the coronavirus pandemic gripped the economy and resulted

Michael Z. Anise, CEO

sector

april rent received

Industrial

98%

Manufactured homes

97.10%

Apartments

93.30%

Office

92.70%

Healthcare

88.30%

Free standing retail

70%

Shopping centers

47.10%

in eviction freezes throughout the country, MHPC’s rent collections were approximately 98%. Manufactured Housing is the most affordable non-subsidized housing option available. MHPC is well positioned to own and operate mobile home communities in great markets where demand for affordable housing is high despite low supply. MHPC’s rent collections reached approximately 98%. The industry itself features a limited supply of new parks. Manufactured housing once composed nearly 35% of single-family housing, but over the last 50 years, municipalities have limited their exposure to new parks with restrictive zoning. Today only 10% of single-family homes are manufactured. This unique industry dynamic highlights another antifragile characteristic of the industry: as the supply squeeze on new parks tightens, existing parks become more valuable. With limited new parks being created due to government-imposed supply ceilings, the manufactured housing space now boasts record occupancy and allows for rental rate growth well above inflation. Demographic and economic trends such as the rise of baby boomers and migration to the southeast benefit MHPC, which concentrates its growing portfolio in the southeast. This region enjoys strong population growth from a result of net immigration and projects to house a significant portion of the aging baby boomer generation. Moreover, the home price-income ratio in the southeast reaches up to 30% lower than

the national average of 4.13, meaning MHPC is well situated to drive rental rate growth. MHPC was founded in 2016 on the thesis of antifragility. It entered 2017 with a single manufactured housing park, and today, its portfolio boasts twenty. Situated on the border of North and South Carolina, its regional focus allows MHPC to aggressively acquire individual parks in neighboring states that benefit from the economies of scales of its streamlined park management structure. With a growing portfolio of a uniquely resilient asset, MHPC is poised to grow into a premier player in its sector. MHPC is currently growing by acquiring properties in the southeast. MHPC has senior debt in place on current and for future acquisition and has been raising funds to compliment the senior debt with its series B preferred stock offering. The company’s website is MHProperties.com where you will find additional details about MHPC’s portfolio, team, press releases, and investment offering along with all SEC filings. www.mhproperties.com n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur. The company paid consideration to SNN or its affiliates for this article.

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nasdaq Gs: GmBl

P R O F I L E D C O M PA N Y

esports entertainment Group, inc.

sports Entertainment Group (GMBL:NASDAQ) is a licensed online gambling company with a specific focus on esports wagering and 18+ gaming, offering P2P (player-to-player) fantasy, pools, fixed odds and exchange style wagering on esports event. On April 14, 2020, we became the first US-based iGaming company to list on the NASDAQ, raising $8.4 million and followed by an additional $6.2M from the exercise of IPO warrants as of June 9, 2020. Together with our NASDAQ status, the Company intends to use its valuable equity and strong cash resources to execute an aggressive rollup M&A strategy in the highly fragmented esports and online gambling markets.

merGers & acquisitions strateGy More than just words, on July 7, 2020, Esports Entertainment Group announced the signing of a Definitive Agreement to acquire Argyll Entertainment, an online Sportsbook and Casino operator in Europe whose SportNation. bet site generated approximately $12M in revenues in 2019 with 100,000 registered users and a growth rate amongst the highest in the industry. With licenses in both the UK and Ireland, this acquisition greatly expands the Company’s growth opportunities, which will

be led by Akur Capital who were engaged on July 8, 2020 for iGaming mergers and acquisitions advisory. Akur Capital is a leading cross-border M&A advisory firm, specializing in the iGaming and sports betting sector. “We just signed with Akur and are already evaluating multiple potential M&A opportunities they’ve introduced to us,” commented Grant Johnson, CEO of Esports Entertainment Group. “The Akur team has years of iGaming and gambling experience and an extensive network of industry contacts. As the first US-based iGaming company to list on NASDAQ, we’re in a great position to capitalize on these highly fragmented markets and believe Akur will prove to be a valuable partner in our ongoing success.”

orGanic GroWth strateGy As part of the Company’s multi-pronged growth strategy, we officially began onboarding hundreds of affiliate marketing partners to our newly relaunched VIE.gg esports wagering platform. The affiliate partners include esports teams, influencers, streamers, leagues, and super affiliates from Asia, Europe, North America and South America. The Company believes its Affiliate Marketing program will play a significant role in its organic growth. “Affiliate marketing is a proven growth model for online gambling,” commented Christian Heinrichs, Esports Affiliate Manager. “Our affiliate streamers broadcast to massive, global esports audiences.

Combined with the credibility and support of the many teams and leagues we continue to sign as affiliates, we believe our VIE.gg platform can quickly become the industry standard for safe, secure esports betting.”

strateGic partnerships GroWth strateGy Due to our successful NASDAQ listing, financial strength and solidified M&A strategy, our reputation within the esports industry has only continued to grow and has led to the first of many Tier-1 partnerships we intend to create over the next 12 months and beyond. Specifically, we have entered into partnerships with Allied Esports Entertainment (Nasdaq: AESE), as well as, Dignitas, a member of the Harris Blitzer sports organization Our esports growth story has only just begun. n Please visit the company’s website for more information: esportsentertainmentgroup.com. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

Grant Johnson, CEO The company paid consideration to SNN or its affiliates for this article.

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tsx-V: az / pink: aazzF / Fra: a23

a2z technologies canada corp. innoVation A2Z is at the forefront of military innovative technology for over 30 Years.

clients We have more than 75 world-renowned clients, organizations, and institutions.

experience 30+ years of experience working hand-inhand collaboration with respected government agencies. Ticker Symbols: TSX: AZ.V | FRA: A23.F | OTC: AAZZF

aBout a2z A2Z Technologies Canada is at the forefront in the fields of military robotics and advanced automotive solutions. Our prestigious client base consists of 75 commercial and government entities, and we work hand-in-hand with several organizations of the Israeli Defense Forces as a tier one supplier to create and service military and robotics hardware. Our newly created consumer arm aims to bring our know-how and patents to the civilian arena into exciting, cutting-edge products to further save lives to make the world a better, safer place.

our various lines of military robots, our smart power pack (standard issue for IDF military vehicles) and our exciting new FTICS capsule.

Our groundbreaking, industry disrupting technology accomplishes the final frontier in vehicle safety: preventing vehicle fires, saving countless lives and billions of dollars in property damage. In the event of a collision, the FTICS system which installs in the fuel tank, prevents the ignition of fuel, thereby eliminating fire explosions, thus minimizing risk to human life and preventing property damage. According to the NFPA, between 20142016 alone, an estimated 171,500 highway vehicle fires occurred in the USA alone, and one out of every 8 calls to the US Fire Department is for a vehicle highway fire. We aim for our first installations in military vehicles in Q4 of this year.

our Vision

Please visit the company’s website for more information: a2zas.com.

Our strategy and game plan going forward is to expand our existing business in international markets, to continue to adapt our products from military to civilian markets, and to further develop promising new and innovative technologies, solutions, and service offerings for military and consumer markets.

company history Mr. Bentsur Joseph, CEO

manaGement: Previously he served as the chairman of Elad Hotels – a subsidiary of the Isaac Tshuva Group, which owns several billions of dollars in assets including the Plaza Hotel in New York City as well as a director of MARLAZ, the owner of various public companies in the industrial, real estate, communication, and hi-tech industries. He also served as CEO of DIG, a well-known Israeli public company. Mr. Joseph’s extensive track record and corporate achievements give him a wealth of experience and knowledge, as well as an extensive Rolodex of connections and high-level relationships. The holder of several patents and with a proven track record and a no-nonsense attitude that gets things done, Mr. Joseph’s vision—and execution-- is the driving force that propels A2Z and leads it into the future. Surrounded by a respected management team, A2Z is looking to truly transform the world in more ways than one. n

Ftics- Fuel technoloGy intelliGent containment system

current products A2Z products currently being marketing are

ble, revenue generating company, operating for over 30 years with a respected client base of 75+ recurring clients. These clients are a veritable who’s-who of respected organizations: they include the Israeli Defense Forces (IDF), Ministry of Defense, Israel Electric, Israel Police, among many others.

A2Z Technologies Canada Corp. is a reputa-

This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur. The company paid consideration to SNN or its affiliates for this article.

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asx: tGm / otcqB: tGmGF

P R O F I L E D C O M PA N Y

dtc eliGiBle

theta Gold mines limited A Rare Find 6 Moz+ Gold Resources Near-term Producer in the Market

heta Gold Mines Limited (ASX: TGM, OTCQB: TGMGF) is a sustainable gold miner in the making with over 6 million ounces of JORC compliant gold resources which compare to the Canadian NI43-101 code. SNN in our Fall 2019 coverage of Theta Gold mentioned its humble vision to start and ramp up gold production towards 150,000 ounces per annum. Early this year the company laid out its plan of how their strategy will be rolled out, to ramp up to 160,000 plus ounces per year of production profile within the initial five years. The entire development plan to be underpinned by Theta’s Stage-One starter-pits strong cashflow. In April 2020 the Company released the optimized feasibility study economics for these starter-pits which was welcomed by shareholders.

the stock’s noW dtc eliGiBle

Bill Guy, Chairman

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Since Theta’s official admission onto the OTCQB in November 2019, the stock recently became DTC eligible to our US traders/investors. With an approximately US$100m market capitalization as of early July 2020 trading above/below US$0.20 per share, the TGMGF stock is not too distanced from graduating to the OTCQX

market, with one key requirement been the stock must be trading above US$0.25 per share.

sustainaBle GroWth From hiGh marGin mines Adopting the 5 Years 4 Mines initial growth strategy, Theta plans to first bring two open cut mines into production targeting over 80,000 ounces per annum. During the first quarter of 2020 the newly purchases ball mill from an ex-Glencore operation nearby were delivered to site. The mill is designed to initially run at 50% of its 1.2mt per year capacity to deliver the Stage-One production before the Stage-Two ramp-up. A new mill would usually take over 6 months to deliver and cost almost eight times of what Theta paid for. The ball mill stands as the centerpiece of the upcoming new Carbonin-Leach (CIL) gold plant build, expected to cost US$23m as per the Stage-One Feasibility Study. The Stage-One open-pits looks to recover over 230Koz gold at an All-in-SustainingCost (AISC) of less than 50% of today’s gold price, to deliver close to US$200m EBITDA throughout a 6.5-year period. Stage-Two production may kick in shortly after to double the scale and mine-life as the Company extends the starter-pits into another con-

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Highways, water access and most importantly, many miles-long existing underground stopes workings and supporting infrastructure, together with the fact that all Theta’s 9 mining rights are already permitted for underground mining activities.

AN EXCITING NEXT 12 MONTHS

Stock Price Graph through July 20, 2020

necting mining lease, subject to a similar government environmental approval process where the Stage-One final approval is expected by end of Q3 2020. Two nearby shallow underground mines with 780Koz average 8.5g/t (Rietfontein) and 1.1Moz average 6g/t (Beta) respectively will secure the Stage-Three and Stage-Four ramp-up with the need to upgrade the same CIL plant. Both resources have open-ended ore bodies yet to be drilled out. The above 4 mines host more than 2.75Moz of Theta’s current 6Moz gold resources with much more exploration upside.

A SUSTAINABLE FUTURE Gold is hot right now and gold may just

once again be traded as a currency, or not. Gold’s role as a standard measure of currencies are unprecedented. But for Theta, its 6 million ounces resources are unparalleled when compared to most other pre-production peers in the market. Most importantly, Theta’s production strategy is a Continuous Growth Strategy where Stage-One’s capital expenditure requirement is only US$31.4m, a critical game changing factor that differs this company from rest of the crowd. The replacement cost of Theta’s existing infrastructure would be in the hundreds of millions of dollars. These include the already permitted plant footprint, permitted tailingsstorage-facilities, already connected power grids and transmitters, existing surrounding roads connecting to the main Provincial

The Company expects to have the project fully financed before year end subject to final Stage-One approval, predominantly with debt to minimize shareholders’ dilution. Mining and plant build tender to complete with the build-team ready to rumble. Trial mining followed by grade-control exercise from the mining team. Important to note, that Theta will continue to upgrade its resources and increase ore reserves to add to its ongoing news flows. While 2020 is definitely not a waste for Theta thanks to its solid in-country team not effected by international travel restrictions, the Company’s also blessed that South Africa itself ranks either #1 or #2 in industrial and mining sectors among other African peers, it is an exporter of mining supplies, therefore, selfsufficient when it comes to mining services/ supplies. Although Theta’s project subsidiary company was the first gold company to register in the country 130 years ago, Theta is now projected to join the producers club in 2021. n Please visit the company’s website for more information: thetagoldmines.com. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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GL O B A L I T COR N ER

Global IT Spending Expected to Decline in 2020; But the Cloud Will Continue to Grow

ccording to Gartner, global IT spending for 2020 is expected to decline 8% y/y to $3.46 trillion, on concerns over the COVID-19 pandemic and a global economic recession. However, the shift to work-from-home (WFH) and digital transformation will continue to drive growth in public cloud services which are expected to grow 19% in 2020. BPaaS = Business Process as a Service; PaaS = Platform as a Service; SaaS = Software as a Service; MSaaS = Management and Security as a Service; IaaS = Infrastructure as a Service Source: Gartner (Nov 2019) Microsoft reported FQ3/20 revenue of $35.0B (+15% y/y) (Cons: $33.8B), and EPS of $1.40 (+23% y/y) (Cons: $1.27). Azure revenue grew 59% y/y (+61% in constant

currency). On the results conference call, CEO Satya Nadella commented on seeing COVID-19 drive “two years’ worth of digi-

tal transformation in two months” and helping customers adapt to “a world of remote everything”.

Exhibit 1 - Worldwide IT Spending Forecast (US$M) Source: Gartner (May 2020)

n BY RALPH GARCEA, P.ENG, MBA Exhibit 2 - Worldwide Public Cloud Service Revenue Forecast (US$B)

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Exhibit 3 - Microsoft Azure vs AWS Growth Rates

In its annual State of the Cloud report, Flexera highlighted that 93% of the respondents are implementing either a multi-cloud or hybrid cloud strategy. While public adoption remains a two-horse race between AWS and Azure (with Google a distant third), the Microsoft Azure Stack is showing great promise in private cloud adoption with a jump to 35% in 2020 from 21% y/y.

How to Play the Microsoft Azure Trade We believe the best microcap way to play the Microsoft Azure trade is through Quisitive Technology Solutions (QUIS-TSXV; QUISFUS). Given Microsoft’s continued growth in the enterprise space, the company is well-positioned for significant growth in 2020 and beyond, as are its preferred partners, including QUIS. Many of the large IT Services providers have growing Microsoft businesses (Accenture/Avanade, CGI Group, DXC, Perficient, etc); but in many cases Microsoft may represent only 10-15% of their respective revenue. QUIS is “all-in” on Microsoft Azure! Quisitive won the 2019 U.S. Microsoft Country Partner of the Year Award. QUIS was honored among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. The recognition is a testament to the focus QUIS has had on leveraging its unique cloud assessment program to guide custom-

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ers from hesitation to cloud adoption across Microsoft Azure and Microsoft O365. We believe QUIS will continue to build the Microsoft Partner of the Future – both organically and through acquisitions. The combined company heading into 2020, will have 300+ employees, with a rev/EBITDA run rate of US$44M/US$4.4M (without any revenue synergies or LedgerPay). The QUIS management team is uniquely comprised of former and current Microsoft leaders and technologists who share a deep understanding of market needs and the appropriate application of Microsoft cloud technology. Please refer to the accompanying profile on QUIS for an overview of the financials and valuation.

How to Play the Hybrid Cloud Trade In addition, we believe the best microcap way to play the Hybrid Cloud trade in the small-to-medium enterprise (SME) market is through Converge Technology Solutions (CTS-TSXV; CTSDF-US). Having completed 12 acquisitions since October 2017, CTS is building a leading national platform of regionally focused Hybrid IT Solution Providers (ITSP) in the U.S. and Canada focused on delivering industry leading solutions and services to public and private clients. The company’s regional sales and services organizations deliver advanced analytics, cloud, cybersecurity, and managed services offerings to clients across various

industries. CTS supports these solutions with talent expertise and digital infrastructure offerings across all major IT vendors in the marketplace. CTS has key strategic partnerships across the major cloud providers (Microsoft Azure, Amazon AWS, Google Cloud), hardware providers (IBM, Cisco, Dell/EMC) and software (IBM/Red Hat, VMware). Converge has become IBM’s second largest reseller partner in North America, ranks in the top 3% of Cisco partners with respect to technical capabilities and is a top 3 VMware partner. These strong vendor relationships have driven robust annualized gross recurring revenue growth to C$190M (+35.7% q/q). Please refer to the accompanying profiles on CTS for an overview of the financials and valuation. n About the Author Mr. Garcea co-founded Focus Merchant Group in September 2018 and has more than 23 years experience in senior analyst positions at major domestic and international firms. He was a top-ranked research analyst, well regarded for the depth and breadth of knowledge he brings to bear on his coverage of technology, gaming, and industrial companies across a broad range of market capitalizations. Over the years, he has received top three rankings from Brendan Woods, Greenwich, Starmine and Thomson Reuters surveys. One of Mr. Garcea’s consulting clients currently is Quisitive Technology Solutions Inc. (QUIS-TSXV), and he currently is a board member for Converge Technology Solutions Corp. (CTS-TSXV). 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. Ralph Garcea owns shares of QUIS and does not own shares of CTS.

MicroCap Review Magazine

otcqB: icnB

P R O F I L E D C O M PA N Y

iconic Brands, inc.

conic Brands, Inc., (ICNB) is a lifestyle branding company with the highest expertise of developing, from inception to completion, alcoholic beverages for itself and third parties. Iconic markets and places products into national distribution through long-standing industry relationships. Iconic is a leader in “celebrity branding” of beverages, procuring superior and unique products from around the world and branding its products with internationally recognized celebrities. It currently offers Bellissima Prosecco and BiVi Vodka. In addition, Iconic developed the Hooters Spirits line of premium spirits in partnership with United Spirits, Inc., a leading private-label beverage company and affiliate of Iconic, for Hooters restaurants and offpremise retail locations both domestically and internationally. Bellissima’s offerings include Bellissima Prosecco DOC Brut, Bellissima Sparkling Rosé Wine, and Bellissima Zero Sugar Sparkling Wine, all made with Organic Grapes and Certified Vegan and Gluten Free. Iconic’s Bellissima Zero Sugar Sparkling Wine – the company’s best-selling product – is gaining solid traction in the marketplace and is quickly becoming a top choice for health-conscious consumers looking for a healthier wine. The Hooters Spirits line of premium alcohol offerings includes Vodka, Gin, Rum (Dark & Light), Tequila (Silver & Gold), American Whiskey and Hooters Heat Cinnamon Whiskey. Hooters Spirits are available in Hooters corporate restaurants in 22 states across the United States, as well as a growing number of Hooters franchise restaurants and retail locations. In March 2020,

Iconic signed reigning, two-time NASCAR Cup Series Most Popular Driver, and driver of the No. 9 Hooters Chevrolet Camaro ZL1 1LE Chase Elliott, as a brand ambassador for Hooters Spirits in a multi-year deal that includes personal appearances at select Hooters Spirits events. In 2019, Iconic Brands reported an increase of revenue of 114% year-over-year from the previous year 2018, and the company’s strong financial performance continues to grow in tandem with the growth in demand. For more information: iconicbrandsusa.com n

The company paid consideration to SNN or its affiliates for this article.

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15233 Ventura Blvd Suite 712, Sherman Oaks, CA 91403 Many OTCBB, OTC, Pink Sheet, OTCQB, OTCQX deposits accepted subject to certain restrictions. Deposits can be made by DWAC, DRS, or with a physical certificate. All accounts are subject to compliance review prior to opening and not all accounts are accepted. All deposits are subject to compliance review prior to acceptance andwww.SNN.Network not all deposits are accepted. Glendale Securities, Inc. Member: FINRA/ SIPCMicroCap Review Magazine 27

F E AT U R E D A R T I C L E

The World of Biotechnology and COVID

merica’s Biotechnology industry is one of the core assets that remains the dominant leader in the world. The combination of great science and capital continues to combine to create innovation at a time when that innovation can change the dynamics of our economy, our country, and the globe. The core mission of the industry remains to save lives by curing and preventing disease. This can be accomplished with advances in diagnostics, intervening therapeutics, and new prophylactic approaches. We will touch on all of these as they relate to COVID-19 and review some of the strategies and the factors that are not being discussed in the media. Make no bones about it. The virus has been politized. The mainstream media, which has gone to the extreme left, has an agenda. From the NY Times and the Washington Post to CNN and NBC and others, the media

n BY JASON H. KOLBERT, MBA

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Exhibit Percentage of patients with PCR-positive nasopharyngeal samples from inclusion to day 6 post-inclusion in COVID-19 patients treated with hydroxychloroquine and in COVID-19 control patients. Source: The International Journal of Antimicrobial Agents, March 20, 2020, 105949

appears to have one goal: destroy Trump. If that means providing misinformation or just not telling the complete story as it relates to the virus, the media is not only onboard but seems to be propelling the rhetoric. We raise the point to raise awareness as the end result is media drives inefficiency in the stock market for some of the companies working on COVID. This disconnect, regardless of your political persuasion, creates an opportunity. We take hydroxychloroquine as a casein-point. This drug, in combination with a common antibiotic, Azithromycin, was highlighted in March (March 20, 2020), as published in the International Journal of Antimicrobial Agents. See exhibits 1 and 2. The study evaluated whether the combination to treat COVID-19 is effective. The paper’s authors concluded, “Despite its

small sample size, our survey shows that hydroxychloroquine treatment is significantly associated with viral load reduction/ disappearance in COVID-19 patients, and its effect is reinforced by azithromycin.” This data was further re-enforced by results from a Henry Ford Health System study that showed treatment with hydroxychloroquine cut the death rate significantly in COVID-19 patients (announced July 2, 2020). The study was a retrospective analysis of 2,541 patients hospitalized between March 10 and May 2, 2020, across the system’s six hospitals. It found 13% of those treated with hydroxychloroquine alone died compared to 26.4% not treated with hydroxychloroquine. None of the patients had documented serious heart abnormalities; however, patients were monitored for a heart condition routinely pointed

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Exhibit Percentage of patients with PCR-positive nasopharyngeal samples from inclusion to day 6 post-inclusion in COVID-19 patients treated with hydroxychloroquine only, in COVID-19 patients treated with hydroxychloroquine and azithromycin combination, and in COVID-19 control patients. Source: The International Journal of Antimicrobial Agents, March 20, 2020, 105949

to as a reason to avoid the drug as a treatment for COVID-19. The study is published in the International Journal of Infectious Diseases, the peer-reviewed, open-access online publication of the International Society of Infectious Diseases (ISID.org). Hydroxyquinoline is a generic drug. It is cheap, at about $0.50 per day, is easy to make, multiple companies are suppliers, and as such, it is readily available. This is good news for the treatment of COVID-19 patients and those at risk, such as front-line workers. Hydroxychloroquine is just one of several approaches to treat the virus that is under evaluation.

The Promise of a Vaccine We hear about multiple vaccines and therapeutic approaches in development. Which players have the highest probability of success? Is it a question of money? If we find a vaccine, how many doses might be available? From major pharma companies such as Gilead (GILD, not rated), Pfizer (PFE, not rated), and AstraZeneca (AZN, not rated) to Moderna (MRNA, not rated) and Inovio (INO, not rated), multiple players are vying with vaccine candidates. There appears to be no shortage of capital and early government

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decisions thus far, have been to scale up the most promising of these vaccines even prior to pivotal (large scale) trials that confirm they work. DNA-based vaccines and immunotherapies. Inovio (INO) is an example of a company that can rapidly develop a DNA-based (plasmid) vaccine. Based on the released genetic sequence of COVID, companies such as Inovio design a DNA sequence (rapidly, in just hours) that they hope will then elicit an immune response. The critical unknown with this approach is just how effective the immune response will be, will it work, and are there any side-effects. Extensive testing is required in thousands of patients to determine not only effectiveness but safety. For example, an over-immune response, as a result of a vaccine, could exacerbate the body’s response and put patients in decline. There are now multiple approaches in development from small biotechnology companies like Inovio and Moderna (MRNA) to pharmaceutical giants such as Pfizer (PFE) and Astra Zeneca (AZN), Regeneron (REGN) and others too. Intervening Therapeutics. We previously mentioned hydroxychloroquine as an intervening therapeutic that appears to interfere with viral replication, as does Gilead’s

(GILD) Remdesivir. Remdesivir is a nucleotide analog that has shown effectiveness in decreasing mortality in COVID patients. The drug has demonstrated both safety and effectiveness. It is an IV drug, it is expensive when we consider the number of patients (much as $4,000 per course), and production is limited. Gilead has seen a significant rise in the Company’s value as news of Remdesivir’s efficacy has been announced. We see value in both hydroxychloroquine and Remdesivir but recognize neither therapy is a cure. The problem with these approaches is that while they may reduce the viral burden, they do little if anything to stop the inflammatory cascade that is driving patients’ mortality, such as ARDS (Acute Respiratory Distress Syndrome). They can be a vital part of the physician’s armamentarium but by no means are by themselves a solution to COVID. Monoclonal Antibodies. We have been closely focused on Sorrento (SRNE, Buyrated). The company is developing monoclonal antibodies to create a COVID “antidote.” Sorrento recently announced T-VIVA-19 (targeted virus vaccine against COVID-19). This is a recombinant fusion protein of the SARS-CoV-2 spike protein S1 domain and human IgG Fc. Sorrento’s existing manufacturing facility for the bulk drug substance is estimated by the company to be able to provide up to 100 million doses per month, with on-site scale-up potential to meet additional demand as needed. This could be a differentiating factor versus other companies such as Eli Lilly (LLY, not rated) driving a similar product. We do know that Sorrento examined billions of antibodies and identified a small group that demonstrated the ability to block the S1 protein’s interaction with human angiotensin-converting enzyme 2 (ACE2), the receptor used for viral entrance into human cells. Through the U.S.’s Project Warp Speed, it’s possible we could see this cocktail move rapidly to commercialization. Again, this may be part of the treatment for COVID patients. The Promise of Cell Therapy. What seems to be driving COVID mortality is an

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active treatment arm to evaluate the safety of the MultiStem product candidate at two dose levels. The second cohort will be a double-blind, randomized, placebo-controlled run-in phase to evaluate the efficacy of MultiStem. The design of the third planned cohort will be based on an analysis of the results of the second cohort. The intent-totreat population will include all randomized subjects (i.e., subjects from the second and third cohorts). The basis for the trial can be found in a prior Phase 2 ARDS study, which demonstrated safety and efficacy. Exhibit Athersys Phase 2 ARDS Trial was a randomized, double-blind, placebocontrolled trial evaluating patients through 28-day clinical assessment with one year follow-up. Source: Athersys

over-immune response, sometimes called a cytokine storm, and in particular, a response in the lungs, known as Acute Respiratory Distress Syndrome or ARDS. The key to patient survival is shutting down this overresponse without interfering with the body’s ability to clear the virus. We see cell therapy as one of the possible solutions. Companies such as Mesoblast (MESO, Buy-rated), Athersys (ATHX, Buy-rated), and Pluristem (PSTI, Buy-rated) offer potential solutions. We will focus on Athersys as we see the company as the most advanced in terms of actual data treating ARDS patients. Still, we recognize that all three companies are now actively enrolling COVID ARDS patients in U.S. trials. Specifically, Athersys’s product MultiStem offers great hope for patients suffering from Acute Respiratory Distress Syndrome (ARDS). ARDS occurs when fluid builds up in the tiny, elastic air sacs (alveoli) in the lungs. Severe pneumonia and the new Coronavirus, too, can result in an infection in the lobes of the lungs, triggering an inflammatory cascade that causes death. Data on Athersys’s MultiStem suggest efficacy in treating ARDS independent of the pathogen (or insult) that is the cause.

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The Athersys COVID ARDS Trial Design. The trial is planned as a multicenter study featuring an open-label leadin followed by a double-blinded, randomized, placebo-controlled Phase 2/3 portion. The primary objectives of the MultiStem Administration for COVID-19 Induced ARDS (MACOVIA) study are to evaluate the safety and efficacy of MultiStem therapy as a treatment for subjects with moderate to severe ARDS due to COVID-19. The primary efficacy endpoint will be the number of ventilator-free days through day 28 as compared to placebo, a wellestablished endpoint for ARDS trials that evaluates an intervention’s combined impact on survival and liberation from invasive mechanical ventilation. The secondary objectives of this study are to evaluate pulmonary function, allcause mortality, tolerability, and quality of life (QoL) among survivors associated with MultiStem therapy as a treatment for subjects with moderate to severe ARDS due to COVID-19. The study is designed to enroll approximately 400 subjects. It is to be conducted at leading pulmonary critical care centers throughout the U.S. The first cohort of the study will be open-label, with a single

Key Data Points from the study: • Previously observed lower mortality for MultiStem-treated subjects compared to placebo (particularly among the prospectively defined subset of more severe ARDS patients) persisted out to one year of follow-up. • Day-365 Quality of Life (QoL) outcomes, assessed by the EQ-5D, were meaningfully better among all survivors who received MultiStem treatment compared to those who received placebo. • Within the prospectively defined group of patients with more severe ARDS, MultiStem treatment was associated with a markedly greater rate of survival and progression to functional independence at one year (i.e., self-care). • As measured at day-28, MultiStem treatment was associated with a higher mean ventilator-free day (VFD) score of 12.9 vs. 9.2 in the placebo group, and a higher mean intensive care unit (ICU)-free day score of 10.3 vs. 8.1 in the placebo group; • As measured at day-28, among more severe ARDS patients, the mean VFD in the MultiStem subgroup was 14.6 vs. 8.0 in placebo subgroup. Mean ICU-free days were 11.4 vs. 5.9 for MultiStem and placebo recipients, respectively. • Lower inflammatory cytokine levels at day-7 in the MultiStem group relative

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Exhibit The Post-hoc analysis of the Athersys Pneumonia-Induced ARDS, Severe cases –PaO2/FiO2Ratios at Day 0, Pre-infusion < 150. Data for severe cases of pneumonia-induced ARDS shows an even greater difference in mortality rate, Vent-free, and ICU-free days between the subjects treated with MultiStem and the patients in the placebo-controlled group. Source: Athersys

to the placebo group, including IFNg, IL-6, and IL-1b among others, suggest the potential for MultiStem treatment to decrease the severe inflammatory response associated with ARDS; and • MultiStem treatment was well tolerated in this sick ARDS patient population, with no serious adverse events related to administration through one year of follow-up.

We conclude: 1. The data seen thus far demonstrates, in our opinion, impressive results, albeit from a small study, efficacy in ARDS. 2. MultiStem works independent of the cause, pneumonia, or the Coronavirus or other (trauma, burns). As such, it has the potential to be an ideal, first-line defense for patients in respiratory distress. 3. ARDS has a high mortality rate. The treatment protocols are complex, and one look at the number of cases indicates to us that ARDS’s potential to overwhelm the system, any system. 4. ARDS is likely the factor that tips most pneumonia (and likely Coronavirus) patients to high-risk, high-mortality outcomes. 5. A universal treatment that can limit ARDS could be a lifesaver. Early data not only suggest better outcomes at 28 days, but a one-year follow-up also suggests

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that treated patients are more likely to reestablish the same quality of life versus control patients before ARDS. 6. Quality-of-Life (QOL) Out to a Year. Athersys has shown follow-up results from the initial ARDS study of IV (intravenous) MultiStem. Participants were evaluated through 28 days for the primary clinical assessment and again at a one-year follow-up. Of note, the most severely affected patients seemed to have the best outcomes (20% mortality versus 50% on control). We could have just as easily focused on Pluristem or Mesoblast as they, too, have data and a rational basis to believe their cell therapy approaches may help COVID patients suffering from ARDS and the cytokine storm recover from the disease. We recognize that the U.S. Biotechnology industry is now surging with activity in the race to develop a treatment, a vaccine for COVID. The industry is unique in the world and unparalleled as it represents the leading edge of American innovation, capitalism, and hopefully, will result in saving thousands, if not millions, of lives globally. www.dawsonjames.com n

Safe Harbor Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release may contain forward-looking information within the meaning of Section 27A Of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words “believes”, “expects”, “anticipates” or similar expressions. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from those expressed or implied by such forward-looking statements. Member FINRA/SIPC. For more information, please contact: Rebecca Belicek rbelicek@dawsonjames.com; (855) 928-0929 – Toll Free. Jason H. Kolbert Jason’s career began as a chemist in the pharmaceutical industry and evolved into a product and marketing manager with Schering-Plough in Japan. Upon returning from Japan, Jason joined Salomon Smith Barney as a research associate which evolved into a 25-year career on wall-street as a respected biotechnology analyst. Mr. Kolbert today is the Director of Research for Dawson James -DJ, a boutique bank that is focused on micro and small capitalized companies. Jason is tasked with building out DJ’s platform in a way that couples high integrity research fundamentals with a unique open architecture format, where the research is accessible to all, regardless of the individual’s client status. Mr. Kolbert is an active healthcare and special situations analyst covering 30 companies and expanding as his team builds. Jason’s personal interest is in regenerative medicine and oncology as well as specialty pharmaceutical companies. Prior to joining DJ, Jason was an Executive Managing Director and the head of Maxim Group’s Healthcare Research. Mr. Kolbert spent seven years at Citi Group as an analyst, followed by seven years as a portfolio manager with Susquehanna International Group. Mr. Kolbert holds an undergraduate degree from the State University of New York (New Paltz) in Chemistry and a Masters in Business Administration from the University of New Haven. 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.

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tsx-V: esk / otcqB: eskyF

eskay mining corp.

ith control over approximately 526 sq km in the heart of British Columbia’s Golden Triangle, Eskay Mining Corp. (“Eskay Mining”) is one of the best strategically positioned junior explorers in this highly prospective metalliferous region. Skeena Resources’ very high grade Eskay Creek volcanogenic massive sulfide (“VMS”) deposit (historic production of 3.54 Moz Au at 48.9 gpt Au and 168.8 Moz Ag at 2,334 gpt Ag) is situated immediately to the north, and Seabridge Gold’s KSM complex consisting of several large porphyry coppergold deposits as well as Pertivm Resources’ Brucejack large lode gold deposit are situated immediately east of Eskay Mining’s property. Although prospective for a variety of ore deposit types, Eskay mining’s land position is considered most prospective for discovery of precious metal rich VMS deposits of the Eskay Creek type. VMS deposits, often termed black smokers, form as hot, metal-laden waters issue out of submarine hot springs and onto the sea floor creating mounds of sulfide minerals, in this case, ones rich in gold and silver. Through burial and later tectonic processes, these deposits are preserved and brought to surface where they occur today. Importantly, VMS deposits almost always form in clusters resulting in districts of multiple mines. The Eskay Creek deposit sits at the north end of what is interpreted to have been a long

Mac Balkam, CEO

submarine valley, or fault-bounded trough, ideally suited for the formation of multiple VMS deposits. Eskay Mining controls virtually this entire prospective belt extending nearly 25 km southward from the Eskay Creek mine. In line with the geologic model for VMS systems, Eskay Mining has already recognized multiple VMS prospects within this trend including SIB, Lulu, Cumberland, Virginia Lakes, TV, Jeff, Tet, C10, GFJ and Red Lightning. None of these prospects has seen systematic modern exploration. With a treasury of C$2.2M following completion of a recent financing, Eskay Mining is currently pursuing an aggressive property wide exploration program coupling a variety of geophysical techniques with modern stream sediment sampling in an effort to quickly identify its highest priority targets for Phase 1 diamond drill testing during the latter half of the 2020 field season. An intensive geologic remodeling program geared toward documenting the key attributes of

the district scale VMS setting is also underway. By the end of 2020, Eskay Mining is targeting completion of a fully synthesized property wide geologic model to help drive future exploration, and dependent on Phase 1 drilling results, perhaps the discovery of multiple new VMS systems. n Please visit the company’s website for more information: eskaymining.com. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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ACCOUNTING CORNER

COVID-Triggered Going Concern Expected to Rise

he impact of the COVID-19 pandemic has put severe strains on public companies, particularly microcaps. As company management tries to figure out what next week may bring, they must also ask “Will we still be in business a year from now?” FASB’s standards require company management to look out a reasonable period of time (generally 12 months) past the date when it last issued financial statements and assess whether there is substantial doubt about its ability to continue as a going concern. The disclosure doesn’t necessarily only relate to staying in business, but if the company will be able to pay its debts and obligations as they become due. “Substantial doubt” is defined by a “probable” threshold, which means “likely to occur.” However, it is exceptionally difficult to determine what is “likely to occur” during a global pandemic and the worst financial disruption since the Great Depression. As part of a going concern assessment, management is required to make difficult decisions and predictions not only about their company, but also about their customers, vendors, bankers, and capital sources. In a sense, they are forced to predict the unpredictable, knowing full well that there are severe consequences if they over-estimate or under-estimate what the

n BY COREY FISCHER, CPA

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future may hold. Crippled by months of complete and partial shutdowns, the uncertainty over viability will likely result in COVID-19-triggered going concern language to appear in a greater number of financial statements. Although most of the country has been reopening in phases, effects of the COVID-19 shutdown, as well as the pace of economic recovery, are still very much unknown. Some of the assessments that management will continue to make include: • Does the company have sufficient existing liquidity and working capital to survive, or can it access existing unused lines of capital and credit? Companies with a strong balance sheet and a strong cash position will be less affected. • Can the company reasonably forecast that its existing liquidity and expected cash flow from operations will be sufficient to sustain operations over the next 12 months, and potentially longer? The company will have to prepare well thought out projections that will have to consider the effects of the current situation on its supply lines and customer base. This applies particularly to companies in industries that have been significantly affected by COVID-19, such as travel, entertainment and retail. • Is there significant debt that is coming due within the next twelve months? There is no guarantee that lenders are going to renew existing credit and debt facilities, or that new financings will be available to the company. • Can the company meet its contractual obligations (such as rent and equipment lease payments) due or anticipated over the next 12 months? • Will prior banking relationships hold up? Going concern can trigger debt covenants and lenders may demand an increase in collateral, an increase in interest rates, or

full immediate repayment. • What about future operational disruption? Will another COVID-19 wave mandate yet another government shutdown, or further disrupt supply lines? It is generally understood that management’s assessments are based on conditions or situations that are known -- or could have been known -- at the time of evaluation. The key is to make reasonable and supported projections based on reliable underlying information. Management should be thorough, transparent, and very importantly, be diligent about documenting its assessments. History tells us that the good faith assessments made in a fog of uncertainty will be mercilessly scrutinized by regulators and litigators when the fog lifts. As we all know, hindsight vision is 20/20. On a positive note, although every company’s management must address going concern, it would be incorrect to conclude that every struggling company will determine that it has “substantial doubt” and will therefore pull the going concern trigger. Even if they must, it’s not necessarily a death sentence – especially for those in the microcap space where it is understood that many companies are under-capitalized, and typically in need of additional financing. Once having set foot on the going concern road, management is required to construct a mitigation plan to address substantial doubt. A well-crafted plan can help ease the ongoing concern of lenders, vendors, capital sources, and customers. 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 experience, 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 compliance, raising debt and equity, mergers and acquisitions and structuring accounting operations. E-mail: coreyf@weinbergla.com or 310-601-2200. Visit www.weinbergla.com

MicroCap Review Magazine

otcqB: cnsc

P R O F I L E D C O M PA N Y

cannassist international corp.

annAssist International Corp. is a wellness company built upon its proprietary technology CiBiDinolä. CiBiDinolä is CannAssist’s unique CBDbased delivery system effectively designed to enhance the stability, performance and bioavailability of CBD in health and wellness products. CannAssist uses its proprietary CiBiDinol™ as the basis for its new line of Xceptolä Brand Products to be launched July 2020. CannAssist International was born out of Xceptor Labs. Founded by Mark Palumbo whose personal struggles with chronic pain and disease associated anxiety inspired its birth. From his early experiences studying hemp-based materials, Mark learned the inherent instability and lack of penetration of the oil and the oil soluble cannabinoids. Subsequent research led to the delivery mechanism designed to carry CBD to the places where it can ‘do its thing’. The resulting technology was named CiBiDinolä. “I have been a chronic pain sufferer for more than 30 years. Three back surgeries, opiates and NSAIDS were used to mitigate

Mark Palumbo, Founder

MicroCap Review Magazine

my discomfort”, stated Mr. Palumbo. He added, “my wife had a bout with breast cancer and the attendant anxiety that came with it. Though this came a bit too late to help Marla, products made from this technology removed these medications from my life. I couldn’t help but understand the very many people this could help and proceeded to commercialize process and product towards that end.” The Company determined that faster, better penetration and greater shelf life for CBD would define this technology. By utilizing independent third-party lab testing it was revealed consumer products made from CiBiDinolä penetrated the skin 400X greater than CBD in oil carriers alone and 300X greater in the gut. The test results implied that significantly less CBD was needed to achieve targeted endpoints resulting in lower costs and subsequently lower consumer prices for effectively better products. Additionally, CiBiDinol’sä design, due to its encapsulation characteristics, showed a significant improvement in CBD stability. The testing done to date supports a shelf life of up

The overall retail market projected to be $22B by 2023. - Source: Brightfield Group This from a $263MM market performance in 2017. - Source: New Frontier Data

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private and white-label projects. Xceptol™, CannAssist’s CBD Brand is on target to market launch in July 2020. Xceptol™ will introduce an OTC registered topical pain lotion closely followed by drops and capsules. Sales plans for the consumer products include our direct sales distribution, online sales, marketing, advertising and a high-profile PR roll out including Hollywood Celebrities and professional athletes, social media, influencers, print and online advertising. CannAssist’s first year sales are projected to reach US$5MM. “This is based upon current revenue from raw material and test market sales, licensing agreements, international distribution and retail sales of the Xceptolä Brand”, stated Mr. Palumbo. He added, “a product pipeline is populated and expanding. Additional products are expected to inspire strong steady sales growth in the years ahead.” CannAssist’s launch of its Xceptolä brand into the retail segment is supported by a consistent high-quality, high-performing product line, experienced large volume OTC certified manufacturing facilities, 3rd party testing and organically achieved early revenue. www.xceptol.com n

to 2 years; this for a material that degrades under normal conditions within 3-4 months. Founder Mark Palumbo earned a degree in biology and has over 35 years combined experience in Pharmaceuticals and Personal Care. Mr. Palumbo has a broad vision for CannAssist which includes product lines and treatments of his own designs. “Oversight of manufacturing and 3rd party testing of this trademark ingredient pro-

duced consumer products designed to provide clinicians and consumers safe, effective and affordable treatment options to address their personal health and wellness concerns”, stated Mr. Palumbo. CannAssist has developed direct distribution into the personal care industry for its raw material CiBiDinolä for brands wishing to use this technology under licensing arrangements for contract manufacturing,

This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forwardlooking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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MicroCap Review Magazine

nasdaq Gs: mysz

P R O F I L E D C O M PA N Y

my size, inc.

he retail industry has been severely impacted by the coronavirus, which has pushed brands to adapt their e-commerce operations to meet demand. While it may seem easy to move operations online, customer trust can become negatively impacted due to the inability to try-on apparel. The market is plagued with a sizing issue – an estimated $8.4 billion in e-commerce apparel returns are size-related, and return deliveries are estimated to cost U.S. businesses $550 billion. Consumer technology and big data company My Size, Inc. (NASDAQ: MYSZ), is determined to combat this sizing issue via their flagship product, MySizeID. MySizeID is a size-recommendation solution based on shoppers personal body measurements, taken with their smartphone sensors and then compared to the retailer’s garment specifications. My Size’s innovative technology enables consumers to measure their true size, which can then be matched to a brand-specific apparel item – all without the use of their camera. MySizeID improves retailer revenues and lowers their operating costs, while also improving the overall shopping experience. Founded in Israel in 2014, My Size is the

Ronen Luzon, CEO

byproduct of e-commerce struggles. Ronen Luzon, the founder and CEO of My Size, was frustrated by the amount of money spent on returns after his NBA-fanatic son ordered several ill-fitting basketball jerseys from the U.S. “Shoppers should be able to shop online for apparel with the confidence that they will get their size right, in order to avoid the hassle of returns,” said Ronen Luzon. “The decision to buy doesn’t even become a second-thought at that point because the shopper feels empowered by the brand. The retailer knows their true fit and gains new sense of confidence, which typically results in a repeat customer. We believe that all retailers will soon integrate size-and-fit technology, especially with in-store operations at a standstill.” Current partners include U.S. Polo Assn., Boyish Jeans, DeMoulin and Penti. Notably, Boyish Jeans found that over a two-month period, user engagement increased over 75% based on size recommendations and returns decreased approximately 31% after implementing the MySizeID widget. Another great example of success is Penti, Turkey’s leading underwear brand, which reported that MySizeID decreased their online returns by approximately 50%. My Size has also partnered with third party e-commerce platform providers, integrating MySizeID onto sites including WooCommerce, Shopify and SquareSpace. This technology has secured seven pat-

ents, ten commercial agreements and over $22 million investments. The My Size proprietary and patented measurement algorithms are also scalable to different markets and can be deployed as customized solutions to improve the customer experience. My Size also developed BoxSize, a parcel measurement app that provides real-time logistics on package volumes and transportation, improving efficiency and reducing operating expenses. BoxSize is integrated with Israeli’s leading courier Katz, whose revenues have increased by 2.5%. BoxSize is also a partner for Honeywell’s Global Vendor Program, making BoxSize available to thousands of Honeywell customers around the world. According to their projections, MySizeID will generate at least 20 million size recommendations over the course of this year, with customer usage increasing exponentially over time. n Please visit the company’s website for more information: www.mysizeid.com. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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P R O F I L E D C O M PA N Y

asx: lke / otcqB: llkkF

lake resources, n.l. Bill Gates & co Back lake’s clean tech lithium

the inVestment opportunity

Lake Resources (ASX:LKE; OTCQB:LLKKF) is focused on producing sustainable and high purity lithium, from its scalable 100% owned projects in the heart of the Lithium Triangle. Bill Gates, Jack Ma and Jeff Bezos: three names that need no introduction to investors. So what is their connection to Lake Resources? In February, the business giants were among investors in Breakthrough Energy Ventures that backed Lake’s technology partner, California-based Lilac Solutions, in its U$20 million funding round. As Breakthrough’s Carmichael Roberts commented: “Lilac Solutions’ novel technology can change the supply and demand equation by helping lithium producers extract much larger quantities at a significantly lower cost, and from new sources. This is the type of industrial innovation required to support a transition to EVs [electric vehicles] at scale.”

Gates and his fellow high-powered investors did not become successful without taking advantage of opportunities. What are they seeing? First, there is the demand for high-purity lithium for battery and cathode makers. Battery-grade lithium remains in short supply, with only 50 to 60 percent of current lithium production being of battery quality. This is reflected in the significant pricing gap between high and low-grade lithium product. Europe has recently invested even more than China in its EV industry, securing a record 60 billion euro (US$67 billion) last year, largely thanks to Volkswagen (VW). Billions more euros are planned as the European Union charts a greener future. EV sales rose 65 percent in 2018 to 5.1 million vehicles and could top 23 million by 2030, according to the International Energy Agency, helped by increased investment and subsidies not only in Europe, but also in China and North America. Bloomberg New Energy Finance estimates an eight-fold rise in lithium production is needed by 2030, but with supply constraints due to COVID-19 and a lack of investment in new projects, automakers’ EV plans face a road block. Another issue is the growing environmental pressures on the lithium industry, with automakers such as Daimler, Tesla and VW seeking sustainable supply sources.

‘incrediBly underValued’ Steve Promnitz, CEO

cess based on Lilac’s ion exchange technology that reinjects the salty water (brine) into the aquifer once the lithium has been removed. Traditional evaporation ponds or open-cut mines are not required. Lilac has shown it can produce a high purity battery-grade product using its disruptive process. Now with a pilot plant commissioned, Lake plans to send samples to potential off-take partners to demonstrate it has the perfect product for their needs. A recent report by analysts Orior Capital valued Lake at A$0.29, describing Lake as “incredibly undervalued” compared to its peers. Pointing to the “huge disconnect” between Lake’s valuation and its prospects, Orior Capital’s Simon Francis said: “Direct extraction is the future for lithium. It produces a better product, more quickly. Lake Resources offers one of the very few ways to gain exposure to the technology globally.” (https://lakeresources.com.au/wp-content/ uploads/2020/05/lake_resources_2020_05_26_ orior-capital_v1.pdf) For more information on the company, visit www.lakeresources.com.au n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

Lake’s solution: develop a sustainable proThe company paid consideration to SNN or its affiliates for this article.

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P R O F I L E D C O M PA N Y

tsx-V: emh / otcqx: emhtF

emerald health therapeutics, inc. E

merald Health Therapeutics (EHT) is a Canadian licensed producer committed to creating new consumer experiences with distinct recreational, medical and wellness-oriented cannabis with an emphasis on life sciencebased innovation and production excellence. EHT’s well-positioned operations are focused on the large “value” market segment, with a joint venture that is one of the largest and lowestcost operations in the country, as well as the premium market segment, with two high-quality craft operations, one organic-certified, and valued-added “Cannabis 2.0” products. EHT has substantially optimized its operations, and with its own craft facilities just recently in full production – with strong market receptivity –is tracking toward positive cash flow. From the start of legalization (4Q18) to 1Q20, estimated Canadian cannabis expenditures (including illegal) were C$8.9 billion1. Legal purchases grew strongly to 46% of total cannabis expenditures in 1Q20 from 21% in 4Q181. The legal industry’s declining production costs and pricing, product quality improvements, retail storefront expansion, and product innovation are progressively cannibalizing black market sales. Emerald’s operations in British Columbia and Quebec only received full licensing in Q4 2019. Focused on producing craft cannabis products, both operations achieved one of the most important benchmarks to command consumer appeal and premium pricing - growing dried flower exceeding 20% THC potency. With full production in Q1 and sales of Emerald-grown product start-

Riaz Bandali, Chief Executive Officer

ing only in Q2, these facilities’ products are already seeing positive consumer reviews and multiple reorders from provincial distributors. Emerald has provincial agreements to sell dried-flower, pre-rolls, cannabis oils, and other cannabis products to nearly 97% percent of the Canadian market and is establishing its own distinct brand presence. Its 41.3%-owned joint venture, Pure Sunfarms (PSF), is focused on the value market segment. Recognized by investment institutions such as Scotia MacLeod as one of the top-performing large-scale cannabis assets in Canada, it generated ~C$83 million in net sales and C$54 million of EBITDA in 2019, and industry-leading low-cost cultivation (~C$0.78/g in 2019). Its affordable high-quality products earned 14.3% market share year-to-date ending April 30, 2020, in Ontario, Canada’s top province by sales. PSF’s significant value as one of the most efficient large-scale cannabis operations in Canada is reflected in the valuation of EHT’s partner, Village Farms, but not in EHT’s valuation. CEO Riaz Bandali’s bottom-line focus and strategic expertise in global operations and driving innovation over 25 years has been instrumental in driving EHT’s path to profitability. He has managed businesses with a global footprint and led teams of 900+ people, most recently as President, Early Phase Clinical Services and Translational Science, Syneos Health, a global clinical trials manager. “EHT’s first opportunity to realize sales and growing margins from its own high-

quality cannabis products just started in 2Q of 2020, and we now expect our sharp focus on efficiencies and new product offerings to drive us toward profitability over the next quarters. Combining our large stake in one of the country’s best growing operations gives us a very attractive portfolio of distinct and valuable operating assets.” – Riaz Bandali, Chief Executive Officer n 1 Emerald Health Therapeutics calculation adapted from Statistics Canada consumption expenditure data

Please visit the company’s website for more information: emeraldhealth.ca. Certain statements made in this article that are not historical facts are forward-looking statements subject to important risks, uncertainties and assumptions, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. We cannot guarantee that any forward-looking statement will materialize, and readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements involve risks and uncertainties related to, among other things, changes of law and regulations; changes of government; failure to obtain regulatory approvals or permits; failure to obtain necessary financing; results of production and sale activities; results of scientific research; regulatory changes; changes in prices and costs of inputs; demand for products; failure of counter-parties to perform contractual obligations; as well as the risk factors described in Emerald’s annual information form and other regulatory filings. The forward-looking statements contained in this press release represent our expectations as of the date hereof. Forwardlooking statements are presented for the purpose of providing information about management’s current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Emerald undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law. The company paid consideration to SNN or its affiliates for this article.

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F E AT U R E D A RT I C L E

Playing the Pandemic as a Fundamental Investor

he market has roared back since the lows of late March and many investors I talk to feel that they may have missed out on a great opportunity

to buy. However, it is not too late because the market has been split into Covid winners and losers, especially in microcaps. Companies perceived to benefit from the shelter at home mandates caused by Covid have in many cases seen their stock prices multiply (think bio-tech, tele-anything, online businesses, grocery stores and their suppliers). On the other hand, business shut down and disrupted by Covid have seen their values significantly impared (in many cases down 50% or more). This latter group includes sectors like Travel, Fitness, Non-Essential Retail, Restaurants and Casinos. Especially in Microcaps, some of the com-

n BY SAM NAMIRI, MBA

MicroCap Review Magazine

panies being punished today still offer great upside as we move past the immediate disruptions caused by Covid. This is where a major opportunity lies if you can identify those companies that will survive and emerge on the other side of this pandemic to eventually thrive. For a relevant guide on what we can expect, remember that many of the stocks that had the best returns soon after the financial crisis were the ones that fell the most during that crisis but came out as survivors and then big winners, typically related to financials or real estate. Letâ&#x20AC;&#x2122;s discuss the casino sector as an example of an area in which many companies are still out of favor right now. Many casinos were closed for a time and even after reopening are functioning at a limited capacity. Conventions which are an important source of revenue for many Casinos seem to be at least a year away from resuming in earnest and air travel will likely be lower for some time as well. Some regional casinos will be able to weather the virus and come back sooner than others such as those in Las Vegas since the latter depend more on visitors travelling further or for business conventions. Figuring out which regional casinos will do well is not easy, but by looking at the detailed filings and investor presentations one can uncover much of the information needed to differentiate among winners and losers.

One common theme among casinos is the legalization of sports betting by state governments (states need the revenue) and in most states, the law will require ties to physical casinos in order to obtain online sports book licenses. As this trend progresses it will create additional revenue streams for casinos. While Covid initially halted sports events around the world, more recently professional sports have restarted so the growth potential of sports wagering may help casino companies to survive and thrive. Another contrarian and beaten down value play today would be the restaurant sector. Obviously, the initial impact of Covid on the restaurant business was severe. All dine-in restaurants were closed. Since restaurants are an extremely fragmented sector with many small mom-and-pop operators, few restaurants were capitalized well enough to survive through such an extended shut down. Now, many restaurants are slowly getting permission to open up - perhaps with some limitations on distancing and seating capacity. Nevertheless, it is estimated that 20 to 30 percent of locations will never reopen as their business failed during the prolonged shutdown. One side effect is that those restaurants that do survive and reopen will have less competition at least for some time. As a result, unit economics of the remaining restaurants will likely rebound to previous levels sooner than expected.

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There is no substitute for doing the hard work. Just because a stock has dropped by 50% it does not mean that it is cheap or that things will go back to normal eventually. So how can you differentiate between the winners and losers? This is where reading the notes of each company’s detailed 10-K and 10-Q disclosures can be useful in understanding the specifics. There are many opportunities in microcap companies where reading notes, conference call transcripts and also talking to management can really help investors understand how those companies will be positioned to get through these tough times. For example, in the case of restaurants, look at factors like whether or not the Company owns its real estate. This is important because real estate is often carried at cost and so the value can be understated on a company’s balance sheet. This can create an opportunity to unlock liquidity in situations where locations are shut down or limited due to Covid-19. For those companies that own valuable real estate, if cash is needed, the company can borrow money with the property as collateral or maybe do a saleleaseback. Management can use this flexibility to survive the crisis when others may fail. The above is just one of many factors to consider. Another important factor is the company’s relationships with their lenders. Even if a company has leases, it is important to find out details of the landlord relationship and lease terms. There is no substitute for doing the hard work. Just because a stock has dropped by 50% it does not mean that it is cheap or that things will go back to normal eventually. It is important to look at the capital structure of the company as well. In order to survive, companies have borrowed money, raised equity, stretched payable to suppliers, deferred rent or found other sources of fund-

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ing which can hurt valuations down the road if they have deferred payments that they will eventually need to make whole. On the other hand, this crisis has been different because of the amount of government programs and funding that have been established to help small businesses survive. This includes programs like the Paycheck Protection Program, Economic Injury Disaster Loans, and Main Street Funding Program just to name a few. If a company was able to borrow through the Payroll Protection Program, the loan can be forgiven if it is used for payroll and rent expenses. Reviewing disclosures for each company to see what sources of borrowing and liquidity they tapped into and still have remaining is an important consideration when attempting to differentiate among the eventual winners and losers. The price you pay as a shareholder is important as you don’t want to take the risk of investing in one of these battered industries without sufficient upside and confidence in their ability to survive. As a fundamental investor you must make some sort of projection as to how the business will look 1 to 2 years out from now (assuming that Covid is behind us). You should base your projected per share value on your forecasts after accounting for any additional debt or equity a company is expected to raise to fund its operations between now and then. Creating a detailed financial model that includes the balance sheet, income statement and cash flow statement (requires some accounting knowledge) projected out a few years helps make sure that you are paying a fair price today for what you expect the value to be out in the

future. This can take some time to build but is very important for a reliable bottoms-up fundamental analysis. Remember there is no substitute for doing the detailed analysis and work. The bottom line is that a few years from now, some of today’s prices will seem to be a steal. Some companies that appear to be fallen today will rise again and doing the work today can help you figure out who will be the winners and the losers. As companies release results and future guidance and the world slowly opens up again, some stocks will move towards higher intrinsic values once again giving farsighted and patient investors an opportunity to capture the spoils by looking past today’s immediate challenges. Feel free to reach out at sam@ridgewoodinvestments.com if you would like to discuss anything in further detail. www.ridgewoodinvestments.com n Sam Namiri is a Portfolio Manager and Analyst at Ridgewood Investments, where he concentrates on managing the Ridgewood Select Value Fund focused on investing in small and micro-cap companies. Ridgewood focuses on implementing intelligent value-oriented investing strategies for high net worth individuals and businesses (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. 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. 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.

MicroCap Review Magazine

FA M I LY O F F I C E C O R N E R

The Global Pandemic may Change Family Office Investment Strategies In this article we focus on: • What family offices have learned from the COVID-19 crisis in terms of investment strategy. • What factors may influence changes in allocation models? • What this means for companies seeking investment capital from family offices. • We wind it up with a look at where some of the new opportunities are, and how the Microcap segment of the market may factor into family office strategies?

Figure 1 Source:The pH Report. https://www.realvision.com/the-new-normal-for-global-industry?utm_source=contributor&utm_medium=referral&utm_campaign=2020526_ PH_GH_CONT_W1_LINK

Like a rifle shot that was heard by everyone on the planet, COVID-19 is the catalyst that has highlighted fundamental weaknesses in our major economies, weaknesses that have been decades in the making. From Wall Street moguls to migrant workers in the fields, no one has been left untouched. We’re

n BY KARL DOUGLAS

MicroCap Review Magazine

living history, we’re in the midst of a spiral that dwarfs The Great Depression, it’s the biggest economic upheaval in human history. You can look back thirty years to see the birth of the macroeconomic hurricane that we call 2020. As with all trends of historical proportions, they develop so slowly that

A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone https://en.wikipedia.org/wiki/Economy

“No savings because your real wage declined over the last 20 years? No problem, just borrow the ‘equity’ we inflated for you in your home.”

Figure 2. https://www.youtube.com/watc h?v=4PQrz8F0dBI&list=PL4F1C94B5063 C669E

they become camouflaged by shorter-term social, economic and geo-political noise. And although COVID-19 played a significant role as a trigger, as the Global Chemical Capacity Utilization chart (Figure 1) indicates, from 2017 to March 2020 the global economy was already on a steady decline. As Paul Hodges, Founder of the pH Report says, “chemical industry capacity utilization is an excellent predictor of forward economic activity” because chemical contracts are signed six months to a year in advance. As Hodges discussed in a recent interview (link provided in Figure 1), the rapid downturn realized in March 2020 started at the beginning of 2017. And although that point is quite true, the chart shows an even bigger story that started in 1994 with the debate and subsequent adoption of the General Agreement on Tariffs and Trade of “GATT”. This policy with a fairly bureaucratically anonymized name was a policy blunder that has finally come home to roost in 2020! It was when Congress passed GATT, that corporate earnings performance and economic performance became decoupled. We transitioned from the basic definition

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of an economy designed to serve society, to something else in which society serves the economy, a flawed foundation. There’s a remarkable debate between billionaire Sir James Goldsmith and Laura Tyson, Chair of the Council of Economic Advisers, which took place in 1994. It should be watched and studied to understand the monumental impact that policy blunders can have. This interview should be studied by every economist, securities analyst, wealth manager, and anyone in an advisory capacity because it explains quite clearly how we got here. Among the many brilliant points made by Sir James are corporations moving production to the lowest cost of labor do so at the peril of the home economy, and under that condition, corporate profits are not correlated to the home economy. So as the business media love to tout market performance, it is quite often a distraction from the reality of underlying economic decline.

What Have Family Offices Learned? Family offices are now realizing that asset allocation is much more than a buzz term. It’s an essential component of asset preservation, and it has to be developed based on a sound understanding of macro-economic fundamentals. Up until February 2020, for most, everything looked fine until the rent payments began to slow. Where were the major sell-side analysts and buy-side advisors in terms of highlighting these fundamental risks? Frankly, many families are shell-shocked and realize that they have to consider long term economic impact, not just short term cycles. Policies that negatively impact cash flow most be monitored closely and holdings modified if the policies remain in place. If family office advisors were focused on economics, for example, investment results would have been quite different. Consider the impact of the Glass-Steagal repeal in 1998, which allowed financial institutions to use excessive leverage, producing a real estate asset bubble that resulted in the Great Recession of 2008. One might argue that the bubble was necessary because, with 20 years of real wage purchasing power decline as a result of GATT and related poli-

Figure 4. 10 YR Constant Price GDP

MicroCap Review Magazine

Figure 5. 10 YR S&P500

cies, wealth had to be created to compensate for real wage decline and declining consumption capacity. But in terms of individual and corporate fundamentals, purchasing power, and therefore the ability to consistently pay rents and service debts was weakened. How much wealth was destroyed in the aftermath of the Great Recession, as investments in CDO’s were wiped out? Yet coming out of 2008, the lesson was still not learned. In the wake of unprecedented quantitative easing and cheap money financed share buy-backs, the S&P 500 roared from around 1,000 to over 3,200, another bubble that didn’t reflect the true state of the economy. A comparison of GDP in constant dollars prices compared to the S&P 500 shows a major contrast. Real estate has long been the mainstay of family office investing. Right along with the old adage “never spend the principal” goes “never sell the real estate”. Those statements have never been truer. But perhaps new aphorisms should be added to fit the modern investment world, such as: • Never over-lever your real estate, and • Bankrupt companies don’t pay rent, and • Residential tenants with constant wage erosion and increased debt burden will eventually default.

MicroCap Review Magazine

A major revelation has been that real estate is not immune to economic cycles and under certain circumstances carries more risk than other asset classes. Many family offices that are owners of commercial office space and hospitality properties have realized that the bedrock of their portfolios just cracked and that the fundamental assumptions about what is safe and what is not are due for major reevaluation. What many real estate owners also came to realize is if the cash isn’t being generated by a stable economy, the first thing to take a hit is real estate values. And although many sub-sectors within real-estate will remain strong, such as multi-family real-estate in growing markets, it’s no longer the bullet-proof preserver of value that it once was.

What Factors will Influence Asset Allocation? Macro-economic analysis will impact asset allocation strategies more than it ever has in the past. And money managers will not be able to ignore the long term impact of regulatory changes, such as GATT and GlassSteagall. At present, the most pressing issue is monetary policy and the potential adoption of MMT or Modern Monetary Theory.

As a response to COVID-19, the Federal Reserve pumped $7 Trillion of liquidity into the US economy to bridge the gap to eventual economic recovery. As necessary as the fiscal stimulus is, the long-term impact on the US economy could be inflationary in terms of some asset classes. And many economists think there could be other impacts related to a weakened dollar. In response, many asset allocation strategies are incorporating much more focus on asset preservation strategies. For example, many managers are increasing exposure to gold and gold-related assets. Gold has historically underperformed the S&P 500. However on a risk-adjusted basis, for example taking historical volatility into account, an argument can be made that it’s potentially a superior asset to own, particularly in light of recent monetary trends. There are many cases in support of gold allocation and some cases against. Many argue that at 197,000 tons of gold mined from world reserves, we have reached “peak gold” and that stock to flow ratios, a measure of the scarcity of gold will eventually increase after many years of decline. One of the most supportive reasons for gold ownership is its inflation hedge characteristics. With the rapid increase in money supply gold has made an impressive run as seen in Figure 6.

What Opportunities are the for Companies Seeking Family Office Capital? There’s actually a silver lining in all of these changes. Family offices have realized that some of the traditional assets such as real estate, can carry more risk in certain conditions than other assets types. That being said, due diligence standards and underwriting criteria are likely to be dialed up substantially. In terms of Gold, family offices are likely to look for leveraged returns by looking at many of the producers with strong fundamentals in terms of low ASIC (All In

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have been fundamentally changed because of their impact. It’s a brave new world! We’re in an environment where there are two economies, the legacy economy that was laid by the Rockefellers, Fords, and Carneghies, and the new economy that is being laid by the Andreesens, Seibels, Musks, Zuckerbergs, and Bolzons of the world. Much of the legacy economy will survive, but much will go the way of the buggy whip and the carriage house. This represents a time when Microcap companies that are well structured in terms of governance, social benefit, and economic sustainability will have a receptive ear with family offices. There is significant competition for venture capital allocations and Microcaps may be seen as a viable alternative.

Figure 6. Gold Chart - Tradingeconomics.com

Sustainable Cost) and low Price to free cash flow. Junior’s with excellent management and proven sustained production are likely to attract capital. There will be spillover into silver and copper producers as well. Additionally, Family Offices have experienced first hand the impact that technology has had on business. And many that did not quite understand the change that AI, blockchain, and biotech are having in terms of laying the architecture for the next 100 years, are now living it. The entire family office segment of the investment market has spent 2020 on Zoom, Teams, Hangouts, and many other technologies, and have become quite comfortable with the tech. More importantly, they have seen the economic disrup-

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tion that tech can have. Companies have been trying to downsize for decades. And as Barbara Corcoran, founder of Corcoran Properties recently said in a Fox Business interview, “what’s significant is companies have seen that they can trust their workers to work from home. They work harder and are more productive”. So to wrap up the major points, we have seen incredible unprecedented disruption in 2020. What in 2019 would have been an implausible movie script about a virus that would bring the world’s economies to a virtual halt, became reality. The flaws of social and economic government policies that were started decades ago were exposed and assumptions around investment value

About the author: Karl Douglas is the Founder and Chief Investment Officer of Insight Family Office, a multi-family office advisory firm. Mr. Douglas has a career that spans over 30 years of investing in private and public companies. Insight Family Office is an investment advisor to single-family offices, institutional investors, and endowments. For further information: https://linktr.ee/karldouglas 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 registered investment professionals. The author does not own shares or any equity or debt interest in any companies mentioned in this article before or at its publishing. 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.

MicroCap Review Magazine

F EAT UR E D A RT ICL E

Q&A with Marcum BP

rew Bernstein, co-founder/ managing partner of Marcum Bernstein & Pinchuk, a leader in SEC audit, accounting and consulting services to Chinese companies seeking access to capital markets. For 21 years, Drew has worked at the intersection of the Chinese and U.S. market. Drew is a known thought leader regarding the importance of corporate governance, the drivers of the U.S. and China IPO market, SEC and regulations and CSRC (China Securities Regulatory Commission). Marcum BP has become one of the topranked auditors for Chinese companies listed in the U.S. markets and a trusted resource for both U.S. investors considering making investments in China and for Chinese companies and individuals undertaking business expansion or acquisitions in America. Marcum BP is dedicated to bridging the gap between China and America by provid-

Drew Bernstein, CPA

MicroCap Review Magazine

ing high quality, professional independent audit services, financial due diligence, and advisory services to our clients. We have built a very deep expertise in Chinese business practices, combined with highly trained accounting professionals so as to be able to facilitate successful transactions and beneficial business relationships.

q&a Q: What are the accounting issues concerning US regulators about Chinese public companies? DB: For the past two decades many of China’s most innovative private companies chose to go public on the U.S. stock markets, NASDAQ and New York Stock Exchange, rather than China’s domestic stock markets. Collectively, these companies accounted for about $1.9 trillion in market value at the end of last year. Many of them have performed very well for investors and are in fact viewed by China as some of the crown jewels of their technology industry. But others have had lapses in the accuracy of their financial reporting and demonstrated poor corporate governance. One of the drivers of this issue is that China is one of a handful of countries that does not permit local audit firms to be inspected by the Public Company Accounting Oversight Board, or PCAOB. The PCAOB was set up as part of the Sarbanes-Oxley Act of 2002, a federal law that established sweeping auditing and financial regulations for public companies. Lawmakers created the legislation to help protect shareholders, employees

and the public from accounting errors and fraudulent financial practices. The PCAOB regular inspections of all auditors who audit public companies. But under Chinese law, local audit firms are not permitted to share their working papers with foreign regulators unless it is done through the Chinese government agencies. This includes the local affiliates of Big Four audit firms based in China and Hong Kong, who audit the majority of the larger Chinese companies listed here in the U.S. and also audit the China operations of many multinationals and large Chinese state-owned enterprises. The SEC and PCAOB have become increasingly vocal about their frustration with what they view as a lack of compliance with U.S. securities laws in recent months, and both have issued public statements on the issue. The Chinese government views this as an issue of national sovereignty and is willing to provide access only under tightly controlled circumstances. NASDAQ has also put forward some proposed new listing standards for Chinese issuers that include a minimum size for the publicly traded shares, the requirement for an officer or director with public company experience, and setting standards to ensure that auditors have the qualifications in place to reliably audit companies in China in line with PCAOB audit quality standards. These seem to be common-sense reforms that should provide clarity and consistency to market participants. Q: Is there a risk of U.S. regulators delisting Chinese companies and if so why? DB: In May 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act, which would require foreign companies to disclose if their auditor had been subject to PCAOB inspection and would then

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require the SEC to delist these stocks if they remain out of compliance for three years. The bill still needs to pass. While the sanctions are directed at the public companies, they have very little control over this issue, since it would require the U.S. and China to agree upon a workable inspection approach that both sides can accept. Q: What accounting guidelines do Chinese public companies adhere to? What is the issue? DB: Chinese companies that are listed in the U.S. need to adhere to the same accounting standards as from other parts of the world, either US GAAP or IFRS. They need to comply with the same guidance from the SEC when it comes to critical accounting issues. So, in theory the financial reporting should be comparable with American companies. However, in many parts of China it is challenging to find people with a detailed knowledge of U.S. GAAP and SEC accounting issues. Also, senior management may resist making the investment in developing strong internal controls that you need as a public company. Sometimes you see management invest a lot of effort in preparing for an IPO, but then over time the disclosures become less accurate and corporate governance reverts to be more informal as time goes on. My sense is that investors are now going to start placing more emphasis on the quality of accounting and governance before they invest, and that this will raise the bar for Chinese companies that want to list in the U.S. Q: In general, are the Chinese accounting problems widespread or is it a question of a few bad apples? DB: Fraud is not a new issue and can be found in any market and for hundreds of years. In China, fraud issues are being resolved with new corporate governance requirements which will support both domestic markets and boost collaboration across international markets. Overall, China and the U.S. have differing accounting standards and methods.

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Our focus at MarcumBP is to bridge the gap between China and U.S. accounting standards and ensure our clients comply with the U.S. SEC standards should they want a public offering in the U.S. capital markets. Q: Our investors are generally value investors, meaning they depend on financial transparency. How do they know the financial reporting is accurate and dependable? DB: Earning and retaining investor trust is important for all companies. On the investor side, due diligence is important just as it is with every deal. A reputable auditor can give an investor a level of assurance that financial statements are accurate. Additionally, investors can look at the company’s margins and key financial ratios and evaluate the business model from that standpoint. Furthermore, the investor can scrutinize the quality and reputation of the management team and corporate governance structure. The due diligence process needs to be a combination of looking at the balance sheet and determining if the company has the key success factors to instill confidence, trust and ultimately succeed as a public company. Q: In your opinion what should investors beware of regarding Chinese public company accounting? DB: To be clear, I am not an investment adviser. Investors need to do their due diligence by having access to all financial statements, have a clear understanding of the company’s business model ((how they make money,) and carefully evaluate corporate governance. Q: What other issues are important for U.S. investors to know? DB: Increasingly, U.S. investors will seek to understand the goals of the company. If the company is a viable investment option, it will have global expansion plans, have a demonstrated path to profitability and a clear purpose to raise capital in the United States. If the company has no other options to raise capital, it may be less intriguing. China’s domestic

stock market has been very vibrant this year, so companies have a lot of options. Q: What advice would you give to Chinese issuers to prevent delisting? DB: A key piece of advice that I would give Chinese issuers is to be audited by a PCAOB compliant firm like MarcumBP. But putting aside the issue of PCAOB inspections, the most common reason that Chinese companies face delisting is due to weaknesses in their public company infrastructure. In many cases, our firm is asked to come in when a company is in crisis mode to help untangle the mess and find out if there is a legitimate company behind the numbers. Thus far we have been successful in helping at-risk companies to preserve their listing. Q: How can a Chinese company regain compliance and avoid delisting? DB: In most cases, the exchanges will provide a reasonable amount of time to regain compliance as long as the company presents a clear strategy, acts decisively, and follows through on their promises. Depending on the circumstances, those actions can include completing an accounting restatement, upgrading the internal staff and systems, and even making changes to senior management. It is important that the company acknowledge any shortcomings that brought them to this place and demonstrate a real commitment to improve for investors in the future. As long as the underlying business issues can be fixed, a company has the opportunity to win back investor trust over time. When a company is in that position, I like to tell them, “This process is going to involve some pain, but you also have the opportunity to learn a lot. Let’s make sure those lessons are not wasted so you never have to repeat them!” www.MarcumBP.com 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.

MicroCap Review Magazine

F E AT U R E D A R T I C L E

Awesome Aussies Coming to America

ot the first time I have been asked to write for Micro Cap Review Magazine to talk about Aussie stocks and the prospect of ASX listed companies dual listing their shares in north America. The Australian Securities Exchange averages 1.3 million trades per day at an average value of AUD $ 5.6 billion (or USD $ 4 billion). In comparison, the NYSE averages $169 billion daily, whilst NASDAQ trades around $291 billion. The ASX compares more closely to the TSX ($ 5.4 billion daily trade) whilst the TSX-V (the Toronto Venture Exchange) trades close to $100 million. We are seeing a greater number of Aussie companies looking towards the US and Canada seeking greater liquidity and capital markets opportunities as they position themselves for future international expansion. This is particularly relevant for companies with north American based management teams and operations or companies with global products. Industries generally best suited to this include healthcare, biotech, tech and mining. Choosing a secondary listing depends on

n BY RICHARD REVELINS

MicroCap Review Magazine

the sector the company operates in and its market capitalization. A small cap company, with a market capitalization of below, say AUD $ 50 million (USD $ $35 million), would probably regard NASDAQ as too expensive and overly prescriptive. A full NASDAQ listing makes the issuer subject to US Securities Laws, including Sarbanes Oxley compliance and disclosures and the costly and timeconsuming process of regular 20F filings and other time and cost imposts. NASDAQ also imposes minimum share prices which would require companies not meeting that criteria to either consolidate their issued capital or alternatively list through the utilization of ADR’s (American Depository Receipts), which essentially deliver the same result by creating an ADR which represents a multiple of the underlying ASX listed shares. OTCQB and OTCQX listings are a far quicker, less costly and simpler alternative. By pursuing an OTCQB/QX listing a foreign issuer does not become a reporting entity in terms of US Securities Law and maintaining these listings requires no additional reporting, other than keeping OTC Markets current on domestic filings and ASX announcements. That said, the OTC Markets have limitations in terms of trading and liquidity with many broker/ dealers and investors restricted from trading, or only able to trade through market makers. As a consequence, we advise issuers seeking an OTCQB or QX listing to also apply for DTC (Depositary Trust and Clearing Corporation) compliance to allow for electronic trading of their securities. Apart from seeking improved trading liquidity a dual listing can increase a company’s visibility and acceptance to financiers. A number of ASX companies have requirements for funding which dwarf their existing market caps, this is particularly true

of mining companies and biotech companies. Visibility in north America potentially enhances a company’s reach and ability to secure international funding opportunities. It takes time to develop relationships and trust and a dual listing can help facilitate these relationships by ensuring a continuing presence in north America with real time reporting and trading activity. As an example, we recently listed an ASX junior mining company on OTCQB and are about to complete DTC. This company is currently capped at below USD $ 20 million. It however has a partnership with a leading US technology company and an “eventual” capital requirement of around $400 million. The decision to dual list was as much about positioning the company for future capital raising opportunities as gaining exposure to US share investors. As Aussie companies look to the US and Canada for better trading and fundraising prospects, north American investors and funds benefit from exposure to a myriad of new investment opportunities offered on the ASX. The opportunity is provided by the diverse and often “earlier stage” companies which are trading on the ASX and therefore investors are able to participate in growth opportunities that they otherwise would not see, until a more advanced stage. n Richard Revelins has worked as an international investment banker for over 30 years and specializes in listed public companies. He is a co-founder of Peregrine Corporate Limited based in Australia and is also a Managing Director at Cappello Group Limited based in Los Angeles, USA. He currently resides in Venice, California and divides his time between the US and Australia. 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.

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EMPOWERING LIVES THROUGH SPORT The Challenged Athletes Foundation (CAF) empowers individuals with physical challenges through sports. CAF provides grants for adaptive sports equipment, training and competition expenses to athletes age 4 to 77 across 103 different sports and activities in all 50 states and 70 countries. Over the past 9 years our partnership with ROTH capital and the ROTH conference has raised well over $1.2 million to support our athletes. Help empower the challenged athletes of tomorrow. Donate today at www.donateCAF.com

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MicroCap Review Magazine

tsx-V: cts / otcqx: ctsdF

P R O F I L E D C O M PA N Y

converge technology solutions corp.

onverge Technology Solutions Corp. combines innovation accelerators and foundational infrastructure solutions to deliver best-of-breed solutions and services to customers. Having completed 12 acquisitions since October 2017, the Company is building a platform of regional focused Hybrid IT solution providers to enhance their ability to provide multi-cloud solutions, blockchain, resiliency, and managed services, enabling Converge to address the business and IT issues that public and private-sector organizations face today. CTS serves clients with 750+ employees and 40+ offices across North America. Converge acquires regional IT Service Providers and transforms them into multicloud providers with sizable software and service capabilities. With a broad array of solution practices, CTS has been able to grow annualized gross recurring revenue to C$190M (+35% q/q).

Exhibit – Hybrid Cloud Strategy Across Numerous Vendor Platforms Source: Company document

Quarterly revenue increased from $52 million to $241 million in 10 quarters • Quarterly gross profit increased 5x over 10 quarters to $55 million in Q1 • Gross margin is now between 23-25% • Room to grow as CTS focuses more on higher margin recurring managed-cloud services

Financials CTS reported Q1/20 revenue of C$241M (+42% y/y), gross margin of $55M (+47% y/y, 22.7% margins) and adjusted EBITDA of $11M (+29% y/y, 4.6% margins). CTS is trading at 6x forward EV/EBITDA vs US/ European comps at 9x/15x, respectively.

Year over year Q1 adjusted EBITDA increased 31% to over $11M • Room to grow due to expansion of gross margin plus integration savings • Q1FY20 back office integration will lead to annualized savings of over $3M • Q2FY20 cost cutting will save annually over $11M (already completed in April) • Back office integration thru Q2-Q4 will lead to additional $6M in annual savings. n Source: Company document Please visit the company’s website for more information: ctscorp.com.

Shaun Maine, CEO

MicroCap Review Magazine

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priVate company

P R O F I L E D C O M PA N Y

aviation mining solutions • BS Business Management Iowa State University Martha Jefferson-Secretary Treasurer • 2016 Founder Partner AMS • 2013-2016 controller/treasurer InTran LLC • Engine Program Administrator • Mesa Community College/Embry Riddle

What We do Aviation Mining Solutions (“AMS”) is an accredited, profitable supplier of commercial aircraft parts based in Chandler, Arizona. AMS supports the commercial secondary market by providing FAA-approved refurbished aviation parts to meet the demand of Airlines and Maintenance, Repair and Overhaul facilities (“MROs”) AMS leverages its data mining capabilities to identify value in surplus stockpiles. This material is harvested by documenting the life history of the parts and recycling through FAA-approved repair facilities. As the material is identified it is marketed in an offering through a proprietary network of brokerages, MRO’s and Airlines.

Commercial aviation is an essential worldwide market with a vast infrastructure designed to support the flight time of aircraft. Cost accumulates rapidly during downtime creating stress that ripples across the support network. The rapidity of cost accumulation forces the stabilization of pricing within the secondary market driving the parts to be traded with their own currency. AMS ensures that replacement parts are sourced and relocated quickly to the point of need, thus minimizing costs. The accumulated effect of this process is that transactions are predictable, with a steady margin, and enjoy a rapid turn.

Who We are

John Hudnall, CEO

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John Hudnall -CEO • 22 years of aviation parts supply business • 2016 -Present founder/managing partner AMS • 2008-2016 Founder InTran, LLC • 2000-2008 Founder CEO of Inventory Navigation, LLC • BSES Engineering Science, Industrial Mgt Grad School -ASU Adam Fraser-COO • 9 years aviation parts supply • 2016-Sales and Operations/Founder Partner at AMS • 2013-2016 Sales and Operations InTran, LLC • 2010-2013 Director of Materials Control Perform Air International

the Future The Commercial aviation space vast infrastructure has created a multi-faceted platform that allows for economic choices and scalability that makes for an exciting investment opportunity. Aviation Mining Solutions trading transactions are designed with a 25% margin and an annualized inventory turn of 3. This drives a doubling cash multiplier. The company is being managed to drive the growth of the company by leveraging the trading opportunities and through the development of other ventures within the commercial aviation space such as the development of leasing opportunities, acquisitions of MRO’s, or trading of commercial aircraft. www.aviationminingsolutions.com

This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

MicroCap Review Magazine

F E AT UR E D A RT ICL E

The American Medical Association’s Commitment to Health Justice in the United States

n the short span of three months, COVID-19 and police brutality are illuminating, for many previously unaware, profound and historical inequities

in the U.S.

n BY ALETHA MAYBANK, MD, MPH

MicroCap Review Magazine

According to recent figures from the Centers for Disease Control and Prevention, Blacks and Latinx have COVID-19 hospitalization and death rates approximately 5 and 4 times that of Whites. Statistics also show the rate of fatal police shootings among Black Americans is much higher than that of any other race. As a recent study points out, 1 in 1000 Black men are killed by law enforcement per year in the U.S. — more than twice the rate of Whites. So while the country is reeling, it is also revealing something more foundational to the inequity crisis: America’s problem with racism and a lack of understanding of the impacts that racism has on health. In June, the American Medical Association Board of Trustees issued one of its most powerful pledges: “…racism in its systemic, structural, institutional, and interpersonal forms is an urgent threat to public health, the advancement of health equity, and a barrier to excellence in the delivery of medical care … The AMA will actively work to dismantle racist and discriminatory policies and practices across all of health care,” said the AMA’s statement. It is within this void that the AMA’s Center for Health Equity prioritizes its efforts.

As AMA’s inaugural chief health equity officer, I lead this charge with great seriousness, honor and enthusiasm. I am committed to ensuring our nation is one where all people live in thriving communities; where resources are distributed fairly; where structures and systems are equitable; and where everyone has the power to achieve optimal health. The Center, now a year old, demonstrates AMA’s commitment to embed equity in all of its work, especially in light of its own past that caused harm —such as excluding Black physicians from AMA membership, resulting in denials of hospital privileges — and contributed to inequities that persist today, such as the lack of Blacks in the physician workforce. This work of equity and dismantling racism demands intentional focus and resources at the institutional and societal levels. It demands that we who work in and for systems — health, financial, education, housing, etc. — understand how our work has historically produced inequities and potentially created harm. This demands collective and individual root-cause analysis of many assumptions that work to undermine equity. In the U.S., health inequities (injustices)

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are well studied and documented, and what we know now is that they are produced — not random, and most certainly avoidable. What we also have learned during this current pandemic is that while financial investment has been in health care systems — hospitals and doctors’ offices that provide individualized care — another critical system, the public health system — continues to be chronically underfunded, even with COVID-19 federal funds. With deeper analysis, evidence tells us that racism is a fundamental cause of why health inequities exist. Racism is a system of power that oppresses, structures opportunity and assigns value upon people, that historically advantages Whites and disadvantages minoritized communities. Further explanation can be found in Cedric Robinson’s framework of racial capitalism: “The idea that racialized exploitation and capital accumulation are mutually constitutive,” as explained by Whitney Pirtle’s recent piece Racial Capitalism: A Fundamental Cause of Novel Coronavirus Pandemic Inequities in the United States. Jonathan Metzl, in his award-winning book, Dying of Whiteness, brilliantly tells how this structured exclusion also impacts poor Whites. More specifically, in major cities like Chicago, Los Angeles and Washington, D.C., there is a Black-White difference in life expectancy of up to 30 years. Racist policies preventing access for Black and Brown people to wealth-building opportunities drive these numbers: White families possess tenfold the wealth of Black families and eight times the wealth of Latinx families, thereby excluding millions from opportunities in home ownership, entrepreneurship, innovation and investments. The two-day-and-night intentional bombing and pillaging of what had arguably been the epicenter of Black American wealth in the early 20th century (“Black Wall Street”) — in Tulsa, Okla., at the hands of vindictive White neighbors, rapacious for violence, crushed the wealth and well-being of Blacks in what today would amount to millions of

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dollars in losses. This is just one of many examples. Over time, these injustices have been literally embodied by Black and Brown communities, creating individual and collective chronic stress and trauma that elevate stress hormones and lead to inflammation that wreaks havoc upon internal organs. In effect, chronic exposure to racism — whether structural, institutional or interpersonal – over the course of one’s lifetime causes “weathering” of peoples’ bodies that increases vulnerability to illness and early death. Bottom line — racism kills. Knowing that undoing centuries of injustice requires great intention, the AMA’s Center for Health Equity’s strategic efforts will embed health equity in practice, innovation and organizational performance and outcomes across the entire AMA enterprise, ensure equitable opportunities and conditions in innovation for marginalized and minoritized people and communities, and create pathways for truth, reconciliation and healing for AMA’s past. The success of our work necessitates a societal shift in values from focusing on individuals to systems and structures that are often made “invisible,” and ridding ourselves of the myths of meritocracy, American exceptionalism, and hierarchical human value based on skin color — the basis of White supremacy. Furthermore, we must adopt that health is a human right. It is important to understand that health is mostly produced outside of the walls of doctors’ offices and hospitals – and instead within the larger society such as neighborhoods and housing where live, the schools we attend, the generational wealth our families pass down and the technology we have access to. Advancing health equity requires physicians and the health care system to grapple with structural realities currently not taught in traditional medical education, valuing that we are not single-issued people and communities and realizing that success will require multiple sectors — business, education, housing, health — working

together with a common vision of undoing racism, centering equity and implementing anti-racist policies. Our actions and accountability determine our commitment, and our commitment determines the change needed to ensure that everyone has the opportunities, conditions, resources and power to achieve optimal health. n Aletha.Maybank@ama-assn.org Aletha Maybank, MD, MPH, recently joined the American Medical Association (AMA) in April 2019 as their inaugural chief health equity officer and vice president. Her role is to embed health equity in all the work of the AMA and to launch a Health Equity Center. Prior to this in 2014, Dr. Maybank became an associate commissioner, and later a deputy commissioner, and launched the Center for the Health Equity, a new division in the NYC Department of Health and Mental Hygiene geared towards strengthening and amplifying the department’s work in ending health inequities. Under her leadership and in a short amount of time, the department made great strides in transforming the culture and public health practice by embedding health equity in the department’s work. This work has been recognized and adapted by other city agencies and has even captured the attention of the CDC and WHO. Prior to this role, she was an assistant commissioner in the NYC Health Department over the Brooklyn District Public Health Office, a placebased approach, from April 2009-2014. Her bureau set a precedence DOHMH and created a template for community-driven neighborhood planning. Dr. Maybank also successfully launched the Office of Minority Health as its Founding Director in the Suffolk County Department of Health Services in NY from 2006-2009. She also teaches medical and public health students on topics related to health inequities, public health leadership and management, physician advocacy and community organizing in health. Currently, Dr. Maybank serves as president of the Empire State Medical Association, the NYS affiliate of the National Medical Association. In 2012, she co-founded “We Are Doc McStuffins,” a movement created by African American female physicians who were inspired by the Disney Junior character Doc McStuffins. Dr. Maybank holds a BA from Johns Hopkins University, an MD from Temple University School of Medicine and an MPH from Columbia University Mailman School of Public Health. She is pediatrician board certified in preventive medicine/public health. 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.

MicroCap Review Magazine

P R O F I L E D C O M PA N Y

asx: knm / otcqB: kneoF

dtc eliGiBle

kneomedia limited

ustralian global publishing company KneoMedia Limited (ASX:KNM / OTCQB:KNEOF) is now DTC eligible. The ever-expanding education company has operations in USA, UK, Philippines, Australia and now in India. The focus of operations is the publishing and distribution of its SaaS education product platform KneoWorld.com, particularly in the US education sector including a major collaboration with the NAACP and Dell Technologies. KneoWorld is a powerful platform of curriculum-based blended learning programs that uses tech solutions to engage and motivate students of varying abilities to want to learn. Ideal for today’s unpredictable education environment, KneoWorld’s adaptable online format is effective in all education settings: 1. IN-CLASS blended learning resource a. Whole groups, small groups and individually b. Student-centered, teacher-directed. 2. DISTANCE eLEARNING Program a. Student-centered, teacher-directed 3. HOMESCHOOLS Core Curriculum Program a. Student-centered, parent–directed KneoMedia originally pioneered and developed the education platform in response to the needs of children with learning difficulties by creating engaging

James Kellett, Executive Chairman

MicroCap Review Magazine

game-based learning programs combined with an analytics dashboard. The games proved to captivate challenged learners and help behavioural issues. The data generated by the platform gave teachers insights into how a child was progressing and showed where they needed help. Under guidance from educators and administrators the platform has progressed and expanded to now offer a vast range of curriculum-based and mapped teacher support tools for students PreK-Grade 9 for general and special education schools, remote learning and homeschools. The key element of the platform is the focus on story-based learning. Children have been learning through the power of storytelling for centuries and evidence supports its efficacy as a powerful learning tool to help students succeed. KneoWorld’s ELL and mathematics story-based lessons are created around a team of intrepid KneoExplorers who lead the students on a journey of learning and discovery with both on and off-screen activities. These graphic novels are beautifully illustrated and thoroughly engaging. Student progress is monitored via pre and post-game challenges that measure the skill and mastery of each subject. The data is aggregated and evaluated in line with the relevant State standard to generate formative data reports for educators, parents and carers to use to differentiate instructional next steps, thereby meeting the student’s whole specific learning needs. Today’s learners will encounter problems that have not yet been imagined and all

children should be given every opportunity to succeed, regardless of their academic ability. Changes to how children are educated and the growth in educational markets, combined with advances in mobile devices and connectivity, will continue to accelerate innovation, adoption, and affordability of Kneoworld products around the world. All KneoWorld programs are COPPA, FERPA and GDPR security compliant. The Company recognises education markets have a lengthy sales lead time, much of which has been deployed. The Company believes investment to date in both its SaaS platform and the opening of those markets together with the extensive work of regional curriculum alignment will provide long term sustainable annually recurring revenue and further growth in new markets due to the readily translatable design of its totally owned intellectual property, the KneoWorld platform. www.kneoWorld.com n Appointed Executive Chairman October 2015. Mr Kellett has over 30 years’ experience in global corporate finance and business management and has held senior executive positions in the finance and communications industries, including ASX listed companies. Mr Kellett has been the driving force in establishing KNeoWorld Inc. in the game-based education sector in America and other global markets. Please visit the company’s website for more information: kneomedia.com. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

www.SNN.Network

See Company Profile Page 8

ASX : KNM OTCQB : KNEOF DTC ELIGIBLE Publishers of

GLOBAL SAAS STORY-BASED eLEARNING PLATFORM

IN-CLASS, DISTANCE LEARNING & HOMESCHOOL

200+ STORY LESSONS 1000’s OF CHALLENGES

EPIC ADVENTURES & GAMES

Powerful blended learning programs that engage, empower and encourage student participation Unique curriculum-based story lessons to reinforce instruction to enhance new ways to learn On and oﬀ-screen activities delivered in any setting with lesson plans and workbooks Teacher collaboration ensures meaningful content that’s aligned with the curriculum Data-driven programs that can be tuned to individual needs to identify gaps and measure growth Rapid content creation capacity that can be mapped globally to any region

KneoMedia.com KneoWorld.com www.SNN.Network

MicroCap Review Magazine

ASIA CORNER

Hong Kong Market Remains Vibrant Amid Global Chaos

he year continues to bring new challenges to the global economy, yet investors’ enthusiasm for equities cannot be restrained.

Starting the year with pressure of civil unrest and the emergence of a global pandemic, the Hang Seng Index fell over 20% before rallying in the second quarter.

n BY LESLIE RICHARDSON

MicroCap Review Magazine

The Hong Kong IPO market rebounded as well raising $11.3 billion for a yoy increase of 22 % from 64 new listings, taking third place in terms of global funds raised in the first half of 2020 behind Shanghai and NASDAQ. Benefiting the HKEX are the numerous Chinese companies looking for a secondary listing closer to home among increasing US China tensions. In June, Chinese tech giants JD.com Inc (9618:HK) and NetEase Inc (9999:HK) raised US$6.6 billion almost doubling the amount of funds raised all year. Other companies considering a secondary listing include data center operator, 21Vianet Group Inc, Chinese video site, Bilibili, and Yum China Holdings while Baidu is said to be considering delisting from NASDAQ all together. HKEX is also seeing healthcare companies dominating the IPO market this year as China moves to reform the industry by 2030. Beijing-based cancer drug developer InnoCare Pharma (9969:HK) raised $298 million, listing at the high end of its pricing range. Akeso Inc., (9926:HK) of Guangdong province, launched its high-profile IPO on April 24 raising $314 million. Ocumension Therapy (1477:HK), an ophthalmic pharmaceutical

company, rose 193 % on its July 9th debut raising $200 million. On the same day, China Bohai Bank priced its IPO shares in a deal that will raise $1.85 billion making it the biggest listing by a Chinese bank for the year. The revived IPO fervor has no signs of slowing down as 30 companies filed for listing in the first weeks of July while 24 IPOs are expected for the month. Fueling investor’s appetite is Alibaba’s fintech, Ant Group. Considered the world’s most valuable tech unicorn, the company is seeking to raise its valuation to more than $200 billion by selling 5 to 10% of its shares in Hong Kong and Shanghai according to Reuters. Leading the market with scores of outperformers is the rapidly developing Chinese medical device sector. The medical device market in China accounts for around 14% of the overall pharmaceutical market compared to 42% globally. Previously, the majority of the medical devices produced by Chinese manufacturers were low-cost, high-volume items, while international manufacturers supplied facilities with high-end equipment. This dynamic is rapidly changing as the industry moves up the value chain in line with the “Made in China 2025” goal.

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Surgical instruments maker Kangji Medical Holdings Ltd (9997:HK) had the best opening performance for a healthcare IPO this year as it jumped 94% on its June 29th debut. Venus Medtech (2500:HK) a leading transcather heart valve medical device player that debuted in November 2019 is up over 110 % YTD as of July 10th. MicroPort Scientific Corporation (0853.HK) is up 352% from the first of the year to July 10th. The company which has positions in ten business segments broke out of its trading range after it announced plans to spin off its unit, MicroPort CardioFlow Medtech Corporation. The company provides therapies for structural heart diseases and intends to raise between $200 to $300 million, for a valuation of over $1 billion. More recently, the company announced its subsidiary, MircoPort Cardiac Rhythm, completed its Series B financing with total proceeds of $105 million. AK Medical Holdings Limited (1789.HK) was included in the Hang Seng Index on March 9th making it eligible for the China- Hong Kong Connect is up over 200% YTD as of July 10th. The company’s subsidiary, JRI Orthopaedics based in Chapeltown England, also experienced a surge in orders for protective equipment in China to help contain the spread of the Covid 19 virus. Leading orthopedic medical device company, Beijing Chunlizhengda Medical Instruments Co., Ltd. (1858.HK) is up over 220% YTD as of July 10th. The company offers a diversified portfolio of spinal products and joint products including knee, hip and shoulder. Shanghai Kindly Medical Instruments (1501:HK), one of the biggest manufactures for medical polymer products in China, went public in the fourth quarter of 2019 and is up 126 % YTD as of July 10th. Peijia Medical Limited (9996.HK) raised $302 million in its May 15th IPO and is up 34% as of July 10th. Peijia produces heart valve and vascular repair devices designed specifically for Chinese patients. Even as China’s economy took a beating by the global pandemic, new economy companies proved their ability to consistently deliv-

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er strong returns during the shutdown and economic slowdown. Stocks such as gaming, online delivery companies and networking outperformed the market as people adjusted to staying home and many offline activities were restricted. Mobile game developer, FriendsTime (6820:HK) initially struggled to get traction after its IPO in October 2019 but started gaining investors’ attention at the beginning of the year after launching “Fate of the Empress.” The game quickly became one of the most popular games in China propelling the company’s stock up over 270 % YTD as of July 10th. China’s software leaders, Kingdee International Software Group (0268:HK) and Kingsoft Corporation Limited (3888:HK), are up 147% and 125% YTD as of July 10th, respectively. China’s leading chip maker, Semiconductor Manufacturing International Corp. (0981:HK) is up 245% YTD as of July 10th despite being hit by the trade war. Investors expect SMIC to soar on its Shanghai listing as it looks to raise up to $7.5 billion later this month. China’s largest food delivery company and rating platform, Meituan Dianping (3690:HK), became the country’s third most valuable company in May with a $100 billion market cap as its stock soared 90% from its March low on reports its business bounced back 90% of pre-pandemic levels. Additionally, China’s largest online medical consultant platform, Ping An Healthcare and Technology (1833:HK), often called Ping An Good Doctor, is up over 120% YTD as of July 10th. On the first of July, China’s new security law for Hong Kong went into effect. The business community seemed to dismiss any fears as they focused their attention on getting back to business. The Hang Seng Index rallied 5% the first week and a half after the law was enacted as investors look forward to stability returning to the city. While political analysts debate how the law will impact Hong Kong, a mass exodus of foreign firms is not anticipated in the near-term. Hong Kong’s status as Asia’s global financial hub and gateway to the world’s second largest

economy continues to remain a top consideration for many international corporations as it provides access to deep pools of capital and expertise while Chinese companies look to the region for opportunities to internationalize their brand. The strong inflow of foreign and Chinese money into the IPO markets this month confirms capital is not leaving the city. Moreover, with more than two-thirds of China’s annual foreign direct investment (FDI) flowing through Hong Kong over the past decade, Hong Kong will continue to be an important asset to Beijing as long as capital controls on the renminbi are in place. n Ms. Leslie Richardson has over 20 years of investment management and equity research experience. She operates 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 preparation for a public listing. Additionally, she is the Asian Correspondent for Micro-Cap Review, www.microcapreview.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. Leslie Richardson does not own shares of any of the companies mentioned.

MicroCap Review Magazine

F E AT UR E D A RT ICL E

COVID-19 Has Accelerated Digital Transformation

No thanks.

anuary 2020 is never coming back. Covid-19 destroyed that lifestyle. Some things have gotten worse; others have disappeared. Yet, some things have gotten better. During the crisis, technology allowed many businesses to adapt and continue operating at some capacity, a trend that has accelerated as we re-open our economies.

n BY SEAN PEASGOOD

MicroCap Review Magazine

having the kids around or a few slips, people found that doing business in their underwear at home works. Take away commuting stresses, transportation costs, the office jerk that no one likes, expensive commercial leases, I believe people wonâ&#x20AC;&#x2122;t have to work from the office 5 days a week - if at all.

Work may neVer Be the same

the tech makinG diGital transFormation happen

According to 2018 U.S. Bureau of Labor Statistics, 23.7% of the American workforce worked from home an average of 2.94 hours per day. When the Covid-19 pandemic started, many enterprises quickly accelerated remote work options to employees (Figure 1). In spite of the distractions of

Technology has enabled remote work and prevented complete economic destruction. Specifically, digital transformation (where digital technologies create new or modify existing business processes, culture, and customer experiences) allowed companies to adapt to our new, remote world. Think:

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Figure 1: U.S. employers gave employees the option to work remotely. Source: Society for Human Resource Management

Software-as-a-Service (SaaS), cloud, and security – these are the digital transformation “enablers”, and in our post-January 2020 world, think about how these types of technologies will continue disrupting business operations.

Digital Transformation’s SaaShay to Protect Business Assets The benefits of SaaS have never been more evident. In the old days, you’d buy software on a floppy or compact disk to install on your computer. It was a one-time sale. Now, with SaaS, you pay monthly or annual fees for software installations and updates through the Internet. SaaS isn’t a new digital transformation trend, but it’s a great, high margin business (often above 80%). Recent

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discussions we’ve had with CEOs have demonstrated competitive advantages that SaaS offers, especially when it comes to monitoring a company’s assets. Energy Pipelines: America has 2.7 million miles of energy pipelines, and an incident happens about every 1.25 days, regardless of government regulations requiring mandatory inspection every 5 to 7 years (depending on the type of pipe). These inspections are done by inserting machines into the pipe that collect data about things like corrosion, wall thickness, and cracks. This data is then dumped into an Excel spreadsheet, and engineers comb through countless number-filled cells across successive spreadsheets trying to find patterns that indicate potential problems. The process is slow, expensive and many times inaccurate. Many pipelines have decades of data stored on computers, com-

pact disks and even paper. OneSoft Solutions [TSXV:OSS, OTC:OSSIF] has a SaaS-based, machine learning pipeline analysis solution that does the same work quicker, cheaper, more accurately. And since the pandemic hit, OneSoft’s customers continued analyzing their pipelines and submitting their regulatory filing seamlessly and REMOTELY while other pipeline operators that still rely on Excel scrambled - some are still scrambling - to find their pipeline data. What do you think is the better way to protect pipeline assets and the environment – the old way or OneSoft’s SaaS? Commercial Buildings: Ask people what the biggest emitter of greenhouse gases is, and they’ll likely say cars. Actually, buildings generate 40% of these gases and waste 30% of the energy they consume. Kontrol Energy [CSE:KNR, OTC: KNRLF] offers SaaS and cloud solutions that monitors and analyzes

MicroCap Review Magazine

Ask people what the biggest emitter of greenhouse gases is, and they’ll likely say cars. Actually, buildings generate 40% of these gases and waste 30% of the energy they consume.

including depression, which can cause physical health declines. However, we believe that as we transition back to our post January 2020 lives, we’ll need to have tools that help us work from home or the park; this means that the world will have a heavier reliance digital transformation solutions like SaaS, cloud, and and security. Stay safe. n

real-time energy use in buildings. Currently, many property owners don’t know where energy waste occurs. During the pandemic quarantine, many could not access their properties to address energy waste. Compare this to Kontrol’s customers, who could log into a SaaS dashboard to observe energy consumption across their property portfolios down to the machine level (I spoke with one customer who said that Kontrol’s SaaS identified a rooftop chiller that wasn’t working and another chiller that was low on coolant). Legend Power Solutions [TSXV:LPS] also offers a real-time, SaaS solution that monitors 20 power quality issues caused by utility power grids. Legend provides customers with a SaaS dashboard accessible from any Internet-connect device so that property owners can see what is happening across their entire portfolios (Legend also sells hardware that corrects these power quality issues). I like business models addressing “If you don’t measure a problem, you can’t fix the problem,” and Kontrol Energy and Legend Power both measure and fix commercial building problems. Cloud Security: My simplest definition of the cloud is storing and access-

Disclaimers

ing data and software over the Internet. Mention the cloud and people will mention Microsoft [NASDAQ:MSFT] and Amazon [NASDAQ:AMZN]. Enterprises relying on cloud providers send and receive their data outside of their buildings and let the plumbing of the Internet connect this data to the cloud. Thankfully, Internet communications comes with encryption and decryption to keep these communications secure. However, hackers can also exploit the encryption part to send bad viruses or steal data. And in simple terms, there is no way to see hacker activity until what he sends is decrypted at the receiving end. And with cybercrime damages estimated to grow to $6 TRILLION by 2021 and CISCO forecasting that 95% of data center traffic moving to the cloud by 2021, monitoring encrypted data is crucial for businesses.

Remote Work Isn’t for Everyone Many people will balk at working from home. Although there are many benefits to remote working, it won’t be for everyone. Isolation can cause mental health issues

Thankfully, Internet communications comes with encryption and decryption to keep these communications secure. However, hackers can also exploit the encryption part to send bad viruses or steal data. 60

MicroCap Review Magazine

Marcel Valentin I Vice President I 647.956.0925 Marcel@SophicCapital.com I www. SophicCapital.com Sophic Capital Inc. may provide, for remuneration, corporate communications and investor relations services to some of the above mentioned client(s). A list of our clients can be found on our website www. SophicCapital.com. The information contained in this email is based on existing disclosure documents or other publicly available information. Statements included in this announcement, including statements concerning our client(s) plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including “anticipates”, “believes”, “intends”, “estimates”, “expects” and similar expressions. Our client(s) cautions readers that forward-looking statements, including without limitation those relating to the company’s future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. You are encouraged to seek independent verification of any information that is important to your decision and speak with an investment advisor regarding any of your decisions. Sophic Capital nor the above mentioned client(s) is not offering securities or advising or soliciting the purchase or sale of securities. www.sophiccapital.com Disclosures Here is a link to Sophic Capital Disclosures and Disclaimers: http://sophiccapital.com/disclaimers/ Sean Peasgood, Sophic Capital, and Sophic Capital’s employees own common shares in OSS, KNR, LPS, and AMZN. 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.

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variety of other services. We serve numerous active public companies and our knowledge of the capital markets assists our clients Michael Gillespie & Associates, PLLC in navigating through issues such as mergers and acquisitions, debt financing, IPOs, due diligence and Michael Gillespie & Associates, PLLC is a boutique firm that offers competitive pricing, big firm capabilities

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We serve • Large enough to serve your needs while younumerous grow.active public companies and our knowledge of the capital markets assists our clients in navigating through issues such as mergers and acquisitions, debt financing, IPOs, due diligence and

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• Industry focus with strong client base. • Large enough to serve your needs while you grow. ael Gillespie & Associates, PLLC • Small enough to make sure you are important to us. Gillespie & Associates, PLLC is a boutique firm that offers competitive pricing, big firm capabilities • Access to proactive partners and not just associates. MGillespieCPA@outlook.com l firm attention and responsiveness. We are a certified public accounting firm with an • Industry focus with strong client base. http://mgapllc.com eurial focus, providing clients with real world expertise with an approachable style. We are a 206-353-5736 MGillespieCPA@outlook.com egistered accounting firm which provides public and private companies with audit, tax, and a http://mgapllc.com 206-353-5736 other services.

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MicroCap Review Magazine

L EG A L C O R NER

The Summer of COVID-19 Considerations for Public Companies

s the chill of spring moves to the dog-days of summer, many microcap companies have pivoted from responding to the crisis originally posed by COVID-19 to adapting to the new normal— a worldwide economy trying to operate as best as possible in the midst of a global pandemic. With this in mind, we would suggest that microcap companies consider the following questions this summer as they strategize for the future.

hoW is your Balance sheet?

n BY JAMES M. JENKINS, Esq.

AND ALEX R. M C CLEAN, Esq.

MicroCap Review Magazine

Do you have adequate cash to operate the business for the next twelve months? If not, or if your cash position is uncertain, you should consider raising money publicly or privately this summer. Despite the pandemic, according to data from Refinitiv Lipper, in the second quarter of 2020, equity funds posted their best quarterly performance since the fourth quarter of 1999. Capital market activity for microcap companies was also strong with a large number of public and private equity offerings being completed during the first half of 2020. This was partially spurred by the NYSE and Nasdaq temporarily waiving the stockholder approval requirement for nonpublic offerings at a discount to market in excess of 20% of an issuer’s outstanding shares through June 30, 2020. This helped facilitate more registered direct and PIPE offerings during the first half

of the year. In addition, through September 30, 2020, the NYSE has extended a waiver of its additional requirements for the “bona fide private financings” exception to the 20% Rule that removes the requirement that the offering be made to multiple purchasers with no single purchaser acquiring more than 5% of the company’s listed securities. The NYSE has also partially waived the limitations on NYSE-listed companies selling securities to significant stockholders considered a related party subject to certain limitations through September 30, 2020. While this regulatory flexibility helps, companies that are shelf eligible would be well served by ensuring that they have an effective Form S-3 registration statement on file with the SEC and that they have adequate availability on their registration statement.

What is your stock price? While stock prices generally rebounded well during the second quarter of 2020, in certain industries, stock prices remain significantly depressed. As seen in the wake of the 2008 mortgage crisis, market volatility has historically led to hostile takeover attempts. At the same time, in the interim years since the mortgage crisis, proxy advisory firm recommendations have served to erode most methods of corporate takeover defense because of the view that these defenses serve to entrench management at the expense of shareholders. In the con-

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If your company has suffered a decline in its stock price, stock options being utilized to motivate the management team and other employees may no longer be serving their intended purpose if the options are significantly underwater.

text of today’s market, a shareholder rights plan—commonly known as a poison pill plan—with a limited term or an “on the shelf ” plan, may prove an effective tool to shepherd companies through the financial turbulence of the market. As a summer planning exercise, companies who have seen a significant decline in their market capitalization should consider the options at their disposal to preempt hostile takeovers in an environment of artificially depressed stock prices. In the event a company’s board, after due consideration, deems it appropriate and in the best interest of the company to do so, taking the steps to put into place an operative or a shelf shareholder rights plan can position a company to respond to a future threat quickly. A properly tailored plan can, among other things, serve as a formidable deterrent to unsolicited takeover bids by making such attempts excessively expensive for the would-be corporate suitor.

Are your equity awards still serving their intended purpose? If your company has suffered a decline in its stock price, stock options being utilized to motivate the management team and other employees may no longer be serving their intended purpose if the options are significantly underwater. During a period when significant contributions of time, effort, and sacrifices may be needed to weather your company through the economic challenges posed by the COVID-19 pandemic, this

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is not the time to have employees who are not appropriately incentivized. Underwater stock options also use shares reserved for issuance pursuant to stockholder approved plans and if the options are no longer providing motivation to the management team or other employees, they are an inefficient use of a company’s available equity. Two solutions to the negative effects of underwater stock options are to conduct a stock option repricing or option exchange program. In an option repricing, the stock option is unilaterally amended by the employer to provide for a lower exercise price. Under an option exchange program, underwater stock options are surrendered by the management team or other employees and replaced with options that have a lower exercise price (or with restricted stock, restricted stock units, or cash with a similar fair value), typically the fair market value of an underlying share on the date of the exchange. Both the New York Stock Exchange and the Nasdaq require shareholder approval prior to implementing an option repricing or stock option exchange program (other than an options-for-cash exchange) unless a company’s equity plan specifically permits repricings or exchange offers (which is typically not the case). Stock option repricing and exchange programs also carry with them a host of accounting and tax implications that should be considered when evaluating whether such a program is a viable solution for a company. Despite the negative perception some have about option repricings or exchange pro-

grams, if the reason for the decline in the company’s stock price was due to factors outside of the control of management, a company may want to consider such a program this summer given recent market declines. While microcap companies always struggle to allocate the limited time and resources of its management teams, taking a little time this summer to evaluate these considerations and implement any necessary actions can give a company a stable foundation to address whatever else the pandemic may throw their way in the fall. n Alex R. McClean, practice group leader, focuses his practice on securities, corporate governance, mergers and acquisitions, and general business and corporate matters. He regularly counsels public companies regarding compliance with disclosure requirements and exchange listing standards. He represents issuers and underwriters in capital market transactions and counsels investment advisors and broker-dealers on regulatory compliance. James M. Jenkins has nearly 30 years of public company experience representing domestic and international clients in corporate governance, general corporate law, and securities law matters, including initial and secondary public offerings, private placements, mergers and acquisitions, and securities law compliance. Harter Secrest & Emery LLP is a full-service business law firm providing legal services to clients ranging from individuals and family-owned businesses to Fortune 100 companies and major regional institutions. With offices in Buffalo, Rochester, Albany, Corning, and New York City, New York, the firm is a recognized leader in litigation, corporate, employee benefits, environmental and land use, health care, higher education, immigration, intellectual property, labor and employment, real estate, and trusts and estates law. Harter Secrest & Emery has 35 U.S. News - Best Lawyers 2020 “Best Law Firms” top tier metropolitan practice group rankings—more Western New York rankings than any other law firm. The firm has been honored by Chambers USA for Corporate/M&A, Environment, Labor & Employment, Litigation, Immigration, and Real Estate law and 46 attorneys are recognized as The Best Lawyers in America© for 2020. For more information visit www.hselaw.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.

MicroCap Review Magazine

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Biotech’s Future Shines Bright Despite COVID-19, A Record $11.7 B Flowed Into Biotech Funds In 1H2020

t the beginning of March we had a conversation: Either the COVID19 pandemic was going to decimate biotech investing the way it was doing with retail, hospitality and nearly every part of the economy. Or, the pandemic would be really good for biotechnology, sparking the realization that biological technologies are the fastest way to develop novel vaccines and therapeutics, and the most sustainable way to kickstart advanced manufacturing. Fortunately, the latter turned out to be true. In the first quarter of 2020, more than $5 billion had been committed to new VC funds focused on biopharma, By June 1, nearly $12 billion had flown into institutional biotechnology funds. including brand names such as A16Z ($750M), Arch Ventures ($1.5B), Blackstone ($3.4B), Cowen ($500M) Deerfield ($840M), Flagship Ventures ($1.1B), Frazier ($617M), Quming ($1B), and VenBio ($384M). In addition, according to Atlas Ventures partner and biotech blogger Bruce Booth, in March, when the public markets were a rollercoaster of a mess, biopharma venture investments into private companies reached all-time highs. 19 mega-rounds in the $80M to $200M range closed in the first quarter. Of those,

10 closed in March - at the beginning of the pandemic lock-down. The first quarter of 2020 was the single largest quarter ever for biopharma venture funding in the U.S. with some 171 companies funded. The average funding size per round was $32M - the largest ever per round. Based on the above $14B number, there is a considerable amount of capital to be deployed into biotechnology over the next few years. If you consider the average life of a biotech fund is 7 years, that would mean $2B per year. Given that the megarounds are now averaging $100M, that means funds would have to do 20 deals of that size per year or 140 financings over seven years. In other words, funding levels should remain healthy over the next few quarters. Considering that the institutional capital raised this year will be complemented by other funding sources (corporate venture funds, crossover public funds, family offices, sovereign wealth vehicles, etc.) it means a

lot of money is available for biotech despite the uncertainty and fear surrounding the COVID-19 pandemic. “The industry has a lot going for it right now including a supportive and favorable regulatory environment, high levels of innovation, and favorable demographic trends,” said Harry Glorikian, General Partner, New Ventures. “Anyone experienced in the world of life sciences venture investing knows it is not always a smooth ride. That said, with all the advances we are seeing the sector looks like it can deliver meaningfully performance versus many others over the long term.” Funding amounts have grown larger. For example, companies used to raise $2M to $5M to develop proof of concept and file an investigational new drug application (IND). Today, funds are pouring up to $100M inot pre-IND companies based on their teams. While the focus of the funds that have raised the money is biopharmaceuticals, it is unlikely all that capital will go to drug devel-

n BY SETH YAKATAN, MBA AND

KARL SCHMIEDER, MS/MFA

MicroCap Review Magazine

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Seth is a recognized as an expert in the valuation of life sciences companies, stemming from industry experience and academia. He has authored several publications and lectured and guest lectured at corporate workshop and universities on valuation theory and real-world practice.. Seth is a recognized expert in the area of cannabinoidbased therapeutics. Seth has been responsible for the growth and development of two of the leading companies in the sector as a founder of Kalytera Therapeutics, Inc. and as an Advisor to Axim Biotechnologies. Recently Seth became an advisor to Eaze. Seth currently serves as interim management at several of Katan’s Merchant Banking portfolio companies. Seth currently serves on the board of directors of FitLife Brands, Inc. (FLTF). Seth holds an MBA in Finance from the University of California, Irvine and a BA in History and Public Affairs from the University of Denver. Seth enjoys being a Dad to his two children, is an active practitioner of yoga, and is a connoisseur of classic automobiles

opment. COVID-19 has ignited an interest in diagnostics and testing, so we predict more money will be invested in that area more than previously. Among the many examples are Ginkgo Bioworks’ recent $70M funding to ramp up COVID-19 testing. Some funds are likely to expand to include digital health applications since remote medicine is here to stay. For example, Verana Health, a company curating and analyzing clinical data in opthalmology and neurology recently raised $100M. According to Glorkian, “We are particularly interested in the shift from science to engineering empowered by a combination of the latest information technology advances and biological data applied to areas across diagnostics and therapeutics. This is where we see the biggest impact for both investors and patients.” In addition, some of the funds will find their way into other biotech applications including those enabled by synthetic biology. Among many other examples, these include machine learning company Insitro raising $143M to bridge biology and AI; biotech R&D software startup Benchling raising $50M; GreenLight Biosciences $102M round to expand cell-free RNA products for agriculture and life sciences applications; and Bit Bio’s $41.5M to commercialize a technology to reduce the cost and increase production of human cell lines. For the right companies, funding should be easier. But as always, that will depend

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on the team, the technology, and the target applications. We’re confident we’re about to see a boom in biotechnology. n Seth Yakatan, Co-Founder, Partner, Katan Associates, Inc. Seth Yakatan brings more than 25 years of experience as a corporate finance professional, actively supporting small cap and major companies in achieving corporate, financing and asset monetization objectives through the successful structuring and management of strategic transactions and investments totaling more than several billion dollars in value. Over the past nineteen years as a co-founder of Katan Associates (KAI), Seth has successfully structured and managed strategic alliances and deals, based on his insight and expertise in the US and Global Life Science and Cannabis sectors, including numerous buy- and sell-side M&A transactions. Completed Life Science transactions at KAI include: Eighteen buy and sell-side M&A engagements, generating aggregate transaction value in excess of $550 million. Numerous early-stage pharmaceutical partnering assignments with aggregate value generated for clients of more than $875 million. Facilitation of several royalty monetization transactions, with aggregate realized value in excess of $125 million. Prior to founding Katan Associates in 2001, Seth worked in merchant banking at the Union Bank of California, N.A., in the Specialized Lending Media and Telecommunications Group. During his six years there, he completed the placement of subordinated debt and private equity investments, exceeding $3 billion in transaction value. Seth began his career as a venture capital analyst with Ventana Growth Funds and Sureste Venture Management, where he gained significant experience in creating successful venture-backed life science companies.

Karl Schmieder, M.S./M.F.A., is the founder of messagingLAB, a strategy and marketing agency focused on the life sciences. messagingLAB helps life sciences companies develop the strategies and tactics they need to grow. Mr. Schmieder also teaches Fortune 500 companies, associations, and students how to develop a business strategy that leverages the power of biology. Karl is the co-author, with John Cumbers of What’s Your Bio Strategy? Preparing Your Business for Synthetic Biology. In the book, he interviewed the entrepreneurs and innovators currently disrupting trillion-dollar industries: George Church (Harvard University), Andras Forgacs (Modern Meadow), Christina Agapakis and Jason Kelly (Ginkgo Bioworks), Andrew Hessel (Autodesk), Suzanne Lee (Biofabricate), and J. Craig Venter (Synthetic Genomics), among many others. Prior to founding messagingLAB, Schmieder served as Chief Strategy Officer at Medikly, and Chief Marketing Officer at One Eleven Software, two digital health firms. He served as Vice President at the interactive agency, Xceed Inc. Previously, he served as Vice President Media Relations at GCI Group and Director, Marketing Communications at Noonan/ Russo Communications. Karl has taught branding and writing seminars at the Naropa Institute and New York University. He graduated from the University of California, Riverside with a Bachelor’s and Masters of Science in Biochemistry. He also received a Master’s of Fine Arts in Creative Writing from the Naropa Institute in Boulder. He has also taken executive education classes at Harvard University, the University of Massachusetts, and Columbia University. A native Spanish speaker, Karl is fluent in French, German, Italian and Portuguese. Karl lives in Brooklyn with his wife and three sons. 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. Seth Yakatan and Karl Schmeider do not own any shares of companies discussed.

MicroCap Review Magazine

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HELPING CLIENTS ACCESS THE PUBLIC CAPITAL MARKETS www.gtfinancial.com FLORIDA – NORTH CAROLINA – HONG KONG “Good things come to those who believe, better things come to those who are patient and the best things come to those who don’t give up.” Zig Ziglar

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EVER WONDER WHERE THE PEOPLE WITH ALL THE ANSWERS, GET ALL THE ANSWERS?

Ask MARCUM

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MARKET MAKER CORNER

Glendale Securities, Inc. 1. Please give us an overview of Glendale Securities… Our firm makes markets in OTC securities that trade on the OTCQB, OTCQX, and Pink Sheet marketplaces. For retail and institutional clients, we accept certificate and DWAC deposits. For US & foreign quoted public companies we file form 211 applications and submit DTC eligibility applications.

2. How has the role of a Market Maker changed over the last 10 years? The role of a market maker has not drastically changed over the last 10 years, what has changed is that there are fewer active market makers in OTC securities. Those firms that are left are mainly large institutions. With fewer firms trading, level II quote depth can be less transparent to the marketplace. 3. Can you explain the responsibilities of a market maker in the small, micro, nanocap markets? Market makers in OTC markets represent customer orders, and their own firm’s interest. A bid to buy 300 shares @ $5.00 could be a placed by a market maker to reflect a customer’s order or it could reflect what the market maker is interested in buying for the firm. If a market maker has an order from a customer to buy 300 shares @ $5, the market maker cannot buy shares for its own account at $5 (or better) without first filling the customer’s order for the same price. Market makers have to honor their quoted price and size shown in the marketplace. If a market maker is bid for 200 shares @$7 and another maker hits that bid, the buying market maker must honor the size and price that they quoted. Market makers send messages to transact business through the OTC Link platform offered by OTC Markets.

n BY ERIC FLESCHE

MicroCap Review Magazine

Level 1 is the consolidated best bid and ask price in real time or delayed 15 minutes depending on the platform. All the market makers best quotes and size are aggregated and then only the best bid and ask are shown. If multiple market makers have the same best bid or ask price, the quantity is aggregated as well. Level 2 screens show each market maker’s bid and ask at each price level. Level 2 is the highest level available to retail investors. Level 3 includes level 2 information but adds the ability for licensed market making institutions to enter quotes, execute orders and send information. 5. What does Glendale do better than other market makers? As a market maker our first goal is to make sure our client’s orders are represented in the marketplace. We can access all the other available market makers on OTC Link to provide liquidity to our clients. In other words, Glendale focuses on providing the best possible execution price for our clients. n Glendale Securities, Inc. 15233 Ventura Blvd. Suite 712, Sherman Oaks, CA 91403 www.glendalesecurities.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.

4. What is the difference between Level 1, Level 2 and Level 3 trading platforms?

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Discovering a Wealth Creator Portfolio

n BY MANEESH NATH

MicroCap Review Magazine

ue to the ongoing COVID-19 crisis, investors have nearly $5 trillion in money markets, surpassing the peak of the financial crisis, as they are wary of stocks. While building my investment framework two decades ago, I used to make sure that even if a major event like the dotcom bubble, the credit crisis, or the current health crisis takes place in the future it shouldnâ&#x20AC;&#x2122;t change my core investing principles and investment strategy. To see what has worked in the past, I went ahead and studied the past one hundred years of US business history. I also studied the investment process of legendary investors of the 20th Century. Then, I analyzed the characteristics of great companies that created shareholderâ&#x20AC;&#x2122;s value and the qualities of successful investors who did well for their investors over a considerable amount of time. After a lot of brainstorming, it was evident that a company which has shown remarkable growth in the past decade, which is run by a capable leader and is bought at a reasonable valuation has a good enough chance to become a wealth creator for the portfolio. So, if I can create a framework through which I can consistently come up with several wealth creators, the portfolio is going to compound at an above-average rate and will out-perform the market both on absolute and relative terms. The second part of the investing equation was to master the behavioral finance aspect. So, if using my framework, I spot a company which is going to be a wealth creator in the next decade, I then need to stick with it and

not let the markets decide my buy or sell decisions. So both of the above points tie-in together because if the investment process is robust enough to spot great companies then the subsequent portfolio out-performance will help to dampen the turbulence when the

Ticker Holding REGI

Renewable Energy Group Inc

OESX

Orion Energy Systems Inc

MHH

Mastech Digital Inc

MED

Medifast Inc.

FFXDF Fairfax India Holdings Corp RCM

R1 RCM INC

VCTR

Victory Capital Holdings Inc

ELA

Envela Corp

VNDA Vanda Pharmaceuticals Inc GRVY

GRAVITY Co Ltd

STC

Sangoma Technologies Corp

EGO

Eldorado Gold Corp

SHYF

The Shyft Group Inc

VRTU

Virtusa Corp

MITK

Mitek Systems Inc

MBUU Malibu Boats Inc VBTX

Veritex Holdings Inc

CASH

Meta Financial Grp Inc

INTL

INTL FCStone Inc

CSIQ

Canadian Solar Inc

CNXN

PC Connection Inc

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Systematic Stock Selection Criteria Sheet:

markets start to tumble in a crisis. So the more confident I am about my investment process much better the chance that the portfolio successfully navigates through the inevitable market crisis period. So back in the year 2000, like a good strategist, I started out to first master the art of finding the wealth creators and then over a decade tested that portfolio track record which eventually provided insights on how well the portfolio companies did and then simultaneously incorporate that new learning’s in the framework in 2009 so when a crisis like COVID-19 shows up a decade later in 2020, my framework has two decades of my own practical learning’s lessons from the 21st Century on top of the one hundred years of the 20th Century theoretical learning which is sufficient enough to weather any storm in the future. Jun 2020 US Small Cap Portfolio: Using my robust investment process, I have created a model portfolio with 21 US Small Cap Stocks, inception date as 1st June 2020. The portfolio companies have an Average Market Cap of $815 Million, P/E of 18, EV/EBITDA of 10, Sales (3 Yr Growth) of 33%, Profit (3 Yr Growth) of 75%, ROE of 32, ROI of 18%, NPM of 14%, Current Ratio of 2.3, more information on other parameters in the sheet attached. Since inception on 1st June 2020, in one month the Portfolio is up 7% vs. 2% of the Russell 2000 Benchmark Index. Background: After gaining Wall Street experience and with a deep curiosity to find the holy grail of investing in the stock market, in 2010, I founded Century Partners

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to provide Portfolio Management and value investing research for the US, EU, and Indian equity markets. I harnessed my wide range of experiences in different companies/industries/countries and developed an advance Systematic Stock Selection Process (SSSP, applicable in the global stock markets) through which I consistently find high growth companies while mitigating downside risk in the portfolio, and always keep investor’s interest first. During this period, I had openly shared my investment knowledge via my equity research reports and tried to create equity-related financial literacy awareness in my hometown, Lucknow, U.P. and Mumbai and at India/Global level via my Century Partners blog posts and investment letters. I have work experience with Fortune 500 & major USA, EU & Asian Corporations at senior management & Analyst level covering the entire spectrum starting from Startups, Small Cap, Mid Cap, to Large Cap companies & Conglomerate. During 2008-2010, I worked on Wall Street and focused on quantitative equity/credit market research as a Senior Investment Analyst at Markit Group (now IHS Markit) in New York, NY. During 2006-2008, I worked as a Senior Financial Analyst at Capital One Financial Corporation in Boston, MA/Richmond, VA, where I provided advanced data analysis. During 2003-2006, I also worked at the Innovation Center of Eaton Corporation in Southfield, MI, at the R&D department at the Ford Motors Company in Dearborn, MI as a Senior Analyst, and in between 2000-2002, as an Analyst at Tata Motors in (Jamshedpur, Pune, Kolkata, New Delhi)

India. In 2002, I attended M.S. at the University of Cincinnati, Ohio where I was the recipient of a Full University Graduate Scholarship and Research Assistantship and received a GRE Quantitative Score of 800/800. In 2000, I received, B. Tech. in Mechanical Engineering (minor in Engineering Economics) at the National Institute of Technology (NIT) in Karnataka, India. In 1999, I had conducted a Summer Research Project at the Indian Institute of Technology (IIT) Kanpur and in 1998, had undergone a Summer Internship at Hindustan Aeronautics Ltd. (HAL). Starting in 2006, I took course work (online) in securities valuation from NYU Stern School of Business & Value Investing from Columbia Business School. Starting in 2020, I am attending an Executive Business education program (Accounting) at the Indian Institute of Management (IIM), Lucknow. I have been a learning machine and had displayed the ability to distill a large amount of information into actionable investment ideas. In my past work experiences in the US, I had received Out Standing Performance Appraisals. I had represented NITK and the University of Cincinnati in Table Tennis Tournaments. I also enjoy playing Tennis and an avid reader. I possess a solid “Quantamental” approach to stock selection and global quant equity investing. I joined Arcstone Capital in July 2013 as a Senior Hedge Fund Analyst. Arcstone Capital is Investment Manager to Passage to India Opportunity Fund (PTIOF), Mauritius/Cayman Island (earlier a Delaware, USA) based Hedge Fund. I was

MicroCap Review Magazine

the only person in the portfolio management team where I conducted thorough research & analysis to find Top 25+ undervalued companies out of 4500 companies available in the Indian stock market which helped in raising the fund’s NAV up over 5 times (400%+ Cumulative returns) and produced 45%/Annum Returns over the 4 years (20132017) vs. 10%/Annum Returns of the Indian benchmark BSE Sensex. Based on 2014 performance, PTIOF was the best performing fund (Rank #1) in the world, out-performing over 17,000 hedge funds tracked by Preqin/ Eurekahedge, leading databases. It was Topperforming fund for 2013-2015 & 2014-2016 (3-year category). (Global Fund Ranking provided by leading industry databases like Preqin/Eurekahedge). In 2014, I was awarded as one of the 17 recipients of SumZero’s Buy-Side Analyst/Portfolio Manager Honors out of 15,000+ fund management professionals worldwide. In Feb 2017, I ranked in the Top 0.2% ile of 15,000+ SumZero members globally. (SumZero is the world’s largest community of investment professionals working at hedge funds, mutual funds, and private equity funds; SumZero is based out of Soho, NYC, Wall Street, a Network founded by Harvard and other Ivy League Alumni). I was awarded the “2019 MSME Achiever’s Award” in Hyderabad, India for International Achievement in the field of Wealth Management by the honorable Union Minister of State for Micro Small and Medium Enterprises (MSME). I am also a recipient of the “Distinguished Alumni” Title of NIT Surathkal awarded by

S.NO.

BASIC SCREENING CRITERIA Return On Equity (ROE) (5Y CAGR)

>10%

Return On Capital Employed (ROCE) (5Y CAGR)

>10%

Return On Assets (ROA) (5Y CAGR)

>10%

Earnings Growth (5Y CAGR)

>5%

Sales Growth (5Y CAGR)

>5%

Net Profit Margin (NPM) TTM

>3%

Price/Earnings (P/E) TTM

<35 >3%

Earnings Yield (EY) TTM

Price to Book Value (P/BV)

Price/Sales (P/S) TTM

EV/EBITDA

<10

Daily Volume in Rs. (Averaged Over a Month)

Debt/Equity (D/E)

Percentage of Promoters Shares Pledged

Current Ratio

Promoter Group Share Holding

>20%

Dividend Payout Ratio

>10%

Dividend Yield (DY)

its UP-UK Chapter in April 2017. Systematic Stock Selection Process (SSSP): In the first stage, I apply 18 General filters with an initial screen on all the 5000 Stocks in the market. This basic screen leaves me with close to 500 companies. I then apply Business, Management; Price filters which leave me with 100 companies. I then deep dive & review these 100 companies in microscopic detail, seek deep insights & rank them 1 through 100. For the portfolio, I finally chose the highest grade Top 12-25 companies who exhibit low risk, undervalued, high growth characteristics and create an equally weighted portfolio and monitor all the portfolio level metrics every quarter.

My goal in the past decade was to create a systematic stock selection process that is repeatable, could be scaled up and universally applicable so it can easily be implemented in the global stock market. 72

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Filter

> INR 1 Million <1 <15% >1

>1% Stock Selection Process Framework: If a company gets selected in the Top 25, then it is the best as per my criteria and my knowledge. Companies that reached the Top 100 list but couldn’t make it in the Top 25 list, were mostly good but I may have left it out for some genuine concern or my lack of knowledge to see their future growth outlook. Some from that Top 100 list which didn’t make it in my Top 25 go ahead and do very well, which is fine with me as I didn’t know enough about it at that time to make a decision. I need to fully understand, if a company in the portfolio went up, sideways, or down, why it behaved in that manner, so I can incorporate it in my framework to have more of it or less of it the next time. So, in the case of RS Software Ltd., where there was a client concentration issue, Visa being their only major customer, I had covered that risk in my thesis, that this can be an issue in the future, and when Visa went away then I also exited (at a decent profit). So for future runs, I am even more cautious about that factor. Similarly, learned from experience about promoters shares pledged %age should ideally be zero if not, then, it should be very low. If a company like Astral Poly Technik went

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up, why it went up and incorporated those characteristics in the framework and so on. My goal in the past decade was to create a systematic stock selection process that is repeatable, could be scaled up and universally applicable so it can easily be implemented in the global stock market. With my 10 years of full-time work experience with different industries/departments around the world, multiple skill-set helps me in conducting this detailed process efficiently.

Astral Poly Technik Ltd. BSE: 532830 | NSE: ASTRAL | ISIN: INE006I01046 | SECTOR: PLASTICS | ASTRAL 3rd Jan 2011 Quote was Rs. 30 and Market Cap was Rs. 300 Crore (~USD70M); Jan 2020 Market Price is Rs. 1109 and Market Cap is Rs. 18,117 Crore (USD 2.5 Billion); USD Adjusted Returns (Jan 2011- Jan 2020): 48% Ann. Stock returns vs. 2% Ann. Benchmark returns;

Scope of the Framework Avanti Feeds Ltd. • I can cover 50,000 Stocks traded in the world via my Systematic Stock Selection Process. • As per investor’s interest and appetite, I can create a large AUM portfolio with 25 to 50 stocks using my framework. • This framework works on Stocks of Developed (US, EU, Japan) and Developing Countries (India, China, Latin America, etc.). • My Framework applies to Small, Mid, and Large Cap stocks; all three types can be covered. • This framework is also scalable to accommodate small to large sums of capital. Multi Baggers Which I Found in 2010 and 2011 Using the Framework:

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BSE: 532830 | NSE: AVANTIFEED| ISIN: INE871C01038 | SECTOR: AQUACULTURE| AVANTIFEED Feb 2012 Quote was Rs. 10 and Market Cap was Rs. 136 Crore (~USD30M); Jan 2020 Market Price is Rs. 1109 and Market Cap is Rs. 9045 Crore (USD 1.3 Billion); USD Adjusted Returns (Feb 2012- Jan 2020): 62% Ann. Stock returns vs. 3% Ann. Benchmark returns n Profile Information: Maneesh Nath solely assisted the Hedge Fund Manager of Arcstone Capital starting 2013 which in 2014 became the World # 1 Rank Hedge Fund among all the 17,000 hedge funds across all asset classes globally. Maneesh Nath is a world-class portfolio manager with over 11+ years of international investing experience in the US, EU, and Indian Equities. Maneesh has a proven track record of generating 520%+ absolute returns and out-performing the USD Adjusted BSE India Small-

Cap Index by 400%+ during the period May 2012 to Feb 2019 (Ann. Returns of 31% vs. 12% of Index over the 6.8 years). Major Performers in the portfolio were: Astral Poly Technik Ltd. (APTL: BO) is up 4000%, Avanti Feeds Ltd. (AVNT.BO) is up 3500% & SQS India BFSI Ltd. (SQSI.BO) is up 1000%. In Oct 2012, Maneesh created a model portfolio of 10 large & mid-cap stocks from MSCI India Index which outperformed the index for the next 7 years. Top picks included Tata Consultancy Services Ltd., HCL Technologies Ltd., Tech Mahindra, Axis Bank Ltd. In Jan 2009, Maneesh created a USA Model Portfolio of 17 Mid and Large Cap USA Companies (equally weighted) which outperformed the DJIA for 11 years (Jan 2009 to Jan 2020). During this period, his USA Model Portfolio went up ~7 folds in 11 years (with no turnover) vs 3.5 folds of DJIA, Cumulative Returns of 570% vs 246% DJIA and Annualized Returns of 19% vs 12% DJIA; Major Performers in the portfolio were: TJX Companies Inc., IngersollRand PLC, Harris Corporation, Stryker Corporation, FMC Corporation, Varian Medical Systems, Inc. In Jun 2015, Maneesh created a Model Portfolio of 24 USA Small Cap companies (created in Jun 2015) delivered Cumulative gains of 62%, (Ann. Returns of 13.1%+) over the 4 years Jun 2015 to May 2019, out-performing the Russell 2000 benchmark by 8% (Ann). Top stock picks included EnviroStar Inc (EVI) +700%, Richmont Mines Inc (RIC) +220%, Omega Flex Inc (OFLX) +200%. LinkedIn: https://www.linkedin.com/in/maneeshnath Email: maneeshnath.devraj@gmail.com Phone: +91 727 510 8108 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. Maneeth Nath do not own any shares of companies discussed.

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F E AT UR E D A RT ICL E

A Perspective on Moats I was recently engaged in a discussion of moats. From a simplistic perspective, moats are non-defensible in the long run. Companies building moats should be honestly aware that while they think they have a system that would lead to market dominance, what they have is only fleeting. Technology and competing strategies can readily defeat any moat.

• A castle with a moat is highly defensible against attackers with swords and shields, but upon the enemy developing a canon, the tide turns. (Technology) • A castle, as proven in history, is subject to collapse when an enemy places it under siege (Strategy) • The horse stirrup created major change in warfare as it permitted an attacker to raise up in his saddle and throw a lance farther than the foot soldier with a sword • This same castle is in an exceptionally poor position from attack by a plane (new technology), cyberattack (technology and strategy), or when defenders see the future well before the leaders and abandon the castle.

native (new) strategy that can create a moat, however temporary, that will offer a company advantages over its competitors? If one accepts the premise that moats are fleeting, how does management and BOD members address this issue? Do they establish a Risk Management sub-panel to maintain constant awareness of challenges? Does the team maintain a constant but rolling scenario planning effort whose outcomes are to help the company adapt before a challenger can have an impact? Does this need to assess and react impact microcap, smallcap, midcap and largecap equally? • Consider a company with a patent moat and a plan to continue to evolve the technology with ever more extensions of the base concept? Is the company subject to concept changes? • How about a company that has dominated a market for many years adapting to pressures to shift to AI/ML based

competitor? Does the company reinvent itself? • What does a company do when its 50-year moat is subject to existential societal changes that are advancing at a breakneck pace? While the Oracle of Omaha suggested the benefits of moats to provide competitive advantage, I would consider he and his team are consistently looking over their collective shoulder to see if anything in their investment is becoming non-defensible. It is my opinion that all management teams and investor groups must watch their positions closely and move to action based on their assessment of changes which could impact their company. 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.

With the speed of technology, and the awareness of the competitor to adapt and change or fail, the time offered any company to own a moat is shortening still. At the same time, new moats are being proposed as strategic alternatives to historic moats. This makes sense. When technology can be deployed faster and faster, it is better for companies to defend using alternative strategies? Are there methods of linking improved technology together with an alter-

n BY KEVIN SHEA

MicroCap Review Magazine

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A Unique Perspective

Imagine corporate and securities lawyers who are as interested in your business as you are. Who understand and value it and who are prepared to work with you to create it, grow it, protect it and ultimately maximize your return on it. Who will help you to finance it, or bring it to the public markets, or eventually sell it. Imagine lawyers with passion, creativity and, most importantly, dedication. This is Lucosky Brookman. • NYSE, NASDAQ and NYSE Amex Listings • Public Offerings • Private Placements / PIPEs • Equity Lines of Credit • Recapitalizations (Reverse / Forward Splits) • Rule 144 Matters • Mergers and Acquisitions • Joint Ventures • SEC Compliance Matters

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Building the right team can be expensive and full of people ready to take advantage of your hard-earned investment capital. At Triage Micro Cap Advis ers we have brought together a cost effective s olution that allows your company to work with experienced Micro Cap profes s ionals . Our team keeps the cos ts down by working with s everal companies at every s tage of the s mall cap proces s . We specialize in one s top s hopping in the profes s ional areas of OTC Market Compliance, Finra Corporate Actions , Accounting, Independent Audits and SEC Filings and Regis tration Statements . www.info@triagemicrocap.com kimshalvorson@gmail.com Reference PLANET2020

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RESOURCE CORNER

A Burgeoning Junior Sector Renaissance S omeone famously once said, “The best qualification of a prophet is to have a good memory.” Accordingly, when trying to identify what’s going on in the resource sector, it’s always handy to have some grasp of history. If we revert back to the post-GFC environment, there are parallels with what we are seeing now. Back then, the aftermath of the GFC led to resource companies flourishing, driven by strong base metal and precious metal prices, as governments around the world flooded markets with stimulus. Over recent months, junior resource com-

panies in North America and Australia have burst out of the blocks, propelled by robust investor support. The sector is undergoing a significant renaissance, which is allowing quality companies to flourish. Exciting grassroots discoveries are being made, companies are once again able to raise cash to fund their exploration activities, and share prices of many quality junior companies are surging.

markets recoVer stronGly From march loWs To get an idea of how well markets are performing, let’s take a look at some revealing graphics. The first relates to the benchmark Australian junior resources index, which has seen a 60% resurgence since its March 2020 low. The Australian resource scene is heavily leveraged to iron ore and gold prices, both of which have excelled so far in 2020. While Australia’s unbroken 29-year stretch of economic growth will be ended by the

COVID-19 pandemic, the resource sector is proving to be key in cushioning the blow and likely ensuring Australia outperforms other developed economies. The Australian government’s flagship resources report forecast that earnings from exports of resources and energy will reach a record A$293 billion ($201 billion) in the recent fiscal year that ended on June 30. This will drop to A$263 billion in the 2020-21 fiscal year, according to the Department of Industry, Science, Energy and Resources. Now, while a 10% decline in export earnings from minerals and energy may seem like quite a blow, the report notes that earnings from exports will be 50% higher in real terms than during the 2008 global financial crisis (GFC). It is iron ore that is doing the bulk of the heavy lifting in keeping Australia’s resource exports buoyant, with the report forecasting export volumes of 852 million tonnes in 2019-20, rising to 893 million in 2020-21 and 912 million the following year.

n BY GAVIN WENDT, FOUNDING

DIRECTOR OF MINELIFE

MicroCap Review Magazine

Figure 1: S&P/ASX Small Ordinaries Resources Index

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companies through the cycle, irrespective of what is happening with underlying commodity prices. Many of these are sophisticated investors. For a company that generates a world-class discovery, it doesn’t matter what the underlying price is, it’s going to be an outstanding, world-class deposit that will make money. Furthermore, having access to cash is proving explorers with the financial security to explore ‘frontier’ areas and test new ideas. They can look at something that is a little bit left field perhaps, because they have the confidence of knowing they have the funds to do it. They can avoid the lower-risk, ‘nearology’ targets and really try and identify greenfields discoveries. Furthermore, more major miners are increasingly teaming up with junior explorers through lucrative joint ventures. They are like the extension of a sophisticated investor, who can see which explorers have a really good chance of making a discovery. The bigger miners realise that it makes financial sense to team up with the juniors, who are typically a lot better at finding things, and provide them with the funds to go out into the field and explore.

Figure 2: Spot Iron Ore Price

Figure 3: Spot Gold Price

Growing Numbers of Greenfields Discoveries

Figure 4: Dow Jones Commodity Index

The other stand out commodity for Australia is gold, with the government forecasting exports will rise to 418 tonnes in 2020-21 from 362 tonnes in 2019-20, with revenue jumping to A$32 billion from A$27 billion. And it’s not just Australia – the resurgent gold price in the face of money printing, trillions of dollars of stimulus, negative real interest rates and ongoing uncertainty about the ultimate scale and impact of the COVID-

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19 pandemic, has energised resource and commodity markets internationally. The following graphic charts the 30% recovery in the Dow Jones Commodity Index since its April 2020 low.

Enhanced Access To Funding What we are currently seeing is the emergence of investors that are prepared to back

If we look at things in the context of the Australian resource market, it’s fair to say that there have been an extraordinary number of company-making, ‘frontiertype’ mineral discoveries over the past nine months. But are there common denominators between these situations? In September 2019, small cap gold producer Alkane Resources (ASX: ALK) discovered a potentially massive porphyry gold-copper system in Central NSW. Later the same month, explorer Stavely Minerals (ASX: SVY) made a huge copper discovery at its namesake project in Victoria. In December, Legend Mining (ASX: LEG) announced a ‘Nova-like’ nickel-cop-

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year, with demand outstripping production amid mine and scrap-supply disruptions.

conclusion

Figure 5: Spot Copper Price

per intercept in Western Australia’s Fraser Range. For Pilbara province explorer De Grey (ASX: DEG), the first signs of a discovery at the Hemi prospect at Mallina emerged in December last year, but it wasn’t until early February, when thick, high-grade gold intercepts were returned from two zones, now known as Brolga and Aquila. That same month Sky Metals (ASX: SKY) returned strong gold intercepts from maiden drilling at the Hume prospect in NSW. Then in March, Chalice Gold Mines (ASX: CHN) gave investors something unexpected to cheer about, hitting highgrade nickel-copper-palladium with the first-ever drill hole into the Julimar project, about 60km from Perth in Western Australia. These new project discoveries have created a huge amount of value for these explorers and their shareholders. But the common denominator is that Boda, Hemi, Julimar and Thursday’s Gossan, are virgin discoveries in areas that have had limited exploration in the past. This is what generates market excitement.

positiVe commodity outlook If we examine three of the key commodities that are driving resource sector interest at the present time, we see solid market fundamentals. Gold is benefitting from the growing con-

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cern that the COVID19 has been badly underestimated in terms of both its immediate and longer-term impacts on global economies. Along these lines, the irrational exuberance displayed by equity markets has been hard to fathom. Gold is also benefitting from the trillions of dollars of stimulus that is being fed into the economy by central banks, together with the likelihood of negative real interest rates in the US. It’s a doublewhammy that’s enormously supportive for gold prices, which will likely push them to record highs. The next milestone for gold is the all-time record around $1920/oz. Iron Ore at a current spot price around US$100 per tonne is well above the US$30 per tonne long-term average that the industry endured for many decades. As China, which buys about two-thirds of global seaborne iron ore supplies, has sought to rampup industrial production via government stimulus in order to boost domestic economic growth, its access to iron ore has been hamstrung by lower levels of output from Brazil, the world’s number two supplier, due to COVID-19. This has left Australian iron ore producers in the box seat. Copper has rallied steadily, fuelled by sentiment over consumption prospects as first China and then other large economies began to ease lockdowns. While a new wave of infections adds risk to the demand outlook, the market is getting support from global economic stimulus and concern over mine shutdowns. I note Morgan Stanley estimates global mine-supply losses of 560,000 metric tons this

The resource sector internationally is benefitting from renewed interest, driven by supply-side issues related to COVID-19 that have led to concerns over the amount of metal in warehouse inventories. Whilst, the production side will eventually recover, the growing number of cases worldwide (especially in major resource countries in South America) has put a major question mark – at least temporarily – over metal supply. This uncertainty, combined with resurgent China demand that’s being generated by government stimulus, has led to prices of most commodities bouncing strongly off their March lows. The key in all of this is gold, which whilst having different supply-demand dynamics, has led the charge as far as the commodity space is concerned. There is no commodity like gold when it comes to generating interest in junior companies. Investors are excited by the prospect that the market circumstances that we are witnessing today, are strongly reminiscent of the GFC environment in 2008. The post-GFC environment proved to be enormously fruitful for gold, which hit record highs. Gold is once again set to be the torch-bearer for the junior resource sector over the coming years. n Gavin Wendt is a highly respected resources analyst with over 20 years experience at leading Australian stockbroking companies. He specialises in identifying emerging mining and energy companies in Australia, North and South America, Europe, Africa, and Southeast Asia. Founding Director and Senior Resources Analyst of independent stock research consultancy, MineLife.

Website: minelife.com.au 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. Gavin Wendt doesn’t own shares in any companies referenced in article.

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CYBER SECURITY CORNER

priVate company

Post COVID-19 How Much Will it Cost to Protect My Remote Workforce?

epending on where you live, it has been over 120 days since the world hit pause and went remote. Organizations have had to rapidly transition and adapt their operations to ensure their employees are safe and can remotely access the information and resources necessary to allow the organization to operate successfully. This trend was evident by the rapid rise in use of remote technology such as Zoom, Microsoft (Teams), and Cisco (WebEx). With a mostly remote workforce and no immediate timeline for returning to the traditional workplace, we continue to see the same questions from CIO’s, CISO’s, IT Directors, and other technologists: 1. How do we know that this new technology we are using is secure? 2. Who are all the parties that have access to our data? 3. How does my new remote operating environment affect my ability to detect and respond to an attack? 4. If our company is breached or attacked, what is the financial impact on our business? Will this cause my business to shut down amidst a tough financial time?

Who is BeinG tarGeted?

n BY ERIC FREEMAN

MicroCap Review Magazine

On average, a person will suffer some kind of cyber breach at least once within their lifetime. This figure alone demonstrates that everyone is a target, regardless of who you are. For the average person these breaches aim to steal their identity. When it comes to businesses, the focus is more on attaining financial gain, according to Verizon’s 2020 DBIR. This explains why attackers have a

strong interest in targeting the financial and insurance sectors. To obtain this financial reward, attackers are going after a company’s data. Data is one of an organization’s most critical assets. People compare data to oil, but I look at data like Oxygen. Oxygen is critical for us to survive; without it we die. Similarly, data is critical for an organization to operate successfully; without it an organization can fail. Oxygen is also an element that can be used by itself or can be combined with other elements to create other valuable substances such as water. Data can be valuable by itself, as many organization collect and sell data; but it can also be combined with technology and algorithms to help businesses in critical efforts such as marketing and determining customer satisfaction. Personally identifiable information (PII), work and personal credentials, and banking information are the most targeted data by cybercriminals. These threat actors are going after software providers, service providers, and the financial institutions themselves to get this data. Whether through you, your employees, or your partners, attackers are coming hard and fast.

hoW are We BeinG attacked? It is no surprise, Phishing and Ransomware continue to consume the digital space. Phishing is the current leading cause of breaches and is the main method for attacking organizations. Security providers have seen a 667% increase1 in phishing since February while ransomware attacks have 1 https://www.capgemini.com/wp-content/ uploads/2020/04/Cybersecurity_2020403_V05. pdf

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https://www.electricireland.ie/residential/helpful-links/fraudulent-email-warning

rise. This trend involves attackers breaching your environment, encrypting your data through ransomware and then threatening to make the breach public and release your data to the public. This “double extortion” is used by hacking groups such as Maze Ransomware and are looking to hurt organizations by exposing them to regulatory penalties and actions as well damaging the organization’s reputation. [Figure 2]. Earlier this year, Coveware2 reported the average cost of only paying the ransom was $84k, this did not include the operation cost of an average 16.2 days of downtime or the residual brand damage. The truth is, in a time where everyone is remote, the economic implications have never been harsher, and every dollar spent is scrutinized. While the attackers are the focus, the employees are the victim and are a risk to the organizations themselves. The question we pose to you: can you afford to have your staff click on a phishing email that ceases business operations for over 2 weeks? How would your clients respond? How much would it cost you?

HOW MUCH DOES IT COST TO PROTECT MY COMPANY?

https://www.paubox.com/blog/fbi-issues-alert-for-maze-ransomware/

increased 25% in Q1 2020 as compared to Q4 in 2019, according to insurance provider Beazley. In the financial sector alone, over 80% of attacks come from phishing. These types of attacks often involve fake emails that try to elicit information from or user or trick them into performing a risky action such as clicking on a link or downloading and opening an attachment. To make the fake emails more believable, attackers take advantage of current events. This explains why current

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attacks are leveraging events in this COVID and POST COVID world to successfully trick users. Many of these campaigns sent phony emails on relevant topics such as PPP Loans, the CARES Act, and taxes for 2020 (Figure 1). Thus far, victims have primarily been law firms, local government agencies, smaller funds, and even large companies. Regardless of whether you have a security budget like Honda, hackers will find their way in. A new disturbing trend is on the

The cost of protecting a company and spends associated with it has slowly increased over time. As more and more companies begin to become educated in this space as well as forced to meet regulatory requirements, the industry is set to be valued at $270 billion by 20263. With this comes the significantly smaller $8 billion insurance industry, demonstrating that there is no ideal insurance policy that protect you from cyber risks [Figure 3]. Currently, your typical small-tomedium sized businesses (SMB) operating in the financial sector are behind the curve relying on a local firewall and outdated antivirus to protect themselves. Most threats and tactics can evade such security controls. 2 https://www.coveware.com/blog/2020/1/22/ ransomware-costs-double-in-q4-as-ryuksodinokibi-proliferate 3 https://www.microsoft.com/security/blog/ wp-content/uploads/2019/09/Marsh-Microsoft2019-Global-Cyber-Risk-Perception-Survey.pdf

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focus on security and protecting the business at a fraction of the cost, so you can do what you do best: make money. n CyZen Bio: CyZen is a Cybersecurity Managed Security Service Provider focusing on delivering offensive and defensive security solutions for organizations of all different sizes. With experience across financial, health, energy, government, and tech sectors, CyZen understands that matching security processes to business goals is the only way to protect a business and help them succeed. CyZen is wholly owned by Friedman LLP, with its Headquarters in NYC and satellite offices throughout the country. Private Company Linkedin -> https://www.linkedin.com/in/ericfreeman-09448947/ Bio -> https://cyzen.io/about/team/eric-m-freeman Website -> https://cyzen.io/ efreeman@cyzen.io 212-842-7005 https://www.microsoft.com/security/blog/wp-content/uploads/2019/09/MarshMicrosoft-2019-Global-Cyber-Risk-Perception-Survey.pdf

To create an effective security program, an SMB would need to hire the right staff and acquire, deploy and the right technology. Staff could require countless hours of training and onboarding resulting in additional costs to ensure your company is protected. It could cost you a minimum of $500,000 a year to ensure your business is operating securely. These SMB’s struggle to justify paying these costs internally because bottom line continues to be squeezed and the ROI just diminishes. You may be asking yourself, “there has to be a way to save these costs and protect the brand?” The answer: find an MSSP, not an IT Guy.

Why should i use an mssp? When it comes to technology IT focuses on operations and Security focuses on protecting your company. A Managed Security Service Provider (MSSP) can help you identify your risks, match your security measures to business initiatives, and augment your program for 1/3 the price of doing it internally. By deploying best-in-breed technology and using the leading industry methodology, MSSPs will make sure that if someone is trying to get into your environment or trying to leverage your users, they’ll stop it and ensure that it doesn’t happen again. By working with your IT team or your IT provider, MSSPs

Please visit the company’s website for more information: cyzen.io. 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. This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

A Managed Security Service Provider (MSSP) can help you identify your risks, match your security measures to business initiatives, and augment your program for 1/3 the price of doing it internally. 84

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F EAT UR E D A RT ICL E

Investing Internationally, How Easy Is It?

.S. investors are either unwilling or unable to trade directly in international stock markets because it can be difficult and costly. The trading difficulties also creates a problem for publicly traded international companies trying to reach U.S. investors and raise capital. That said, there are options available to U.S. investors that wish to trade and settle international securities in the U.S. during U.S. trading hours. The form of settlements available to U.S. investors include both F shares and American Depositary Receipts (ADRs). You can buy an F Share and an ADR through a broker, just as you would any domestic U.S. security. F shares are traded on the OTC Markets (OTCQX, OTCQB, PINK) and are established when a U.S. broker-dealer files with FINRA (Financial Industry Regulatory Authority, Inc.) to create a U.S. ticker symbol in order to facilitate trade reporting for a non-U.S. company’s security. U.S. broker-dealers continuously price F shares in accordance with local market share price movements and available liquidity. While trades are executed in U.S. dollars by U.S. broker-dealers, the shares are settled, cleared and custodized in the U.S. or in the company’s local market. Based on local market

disclosure requirement, investors of F shares appear on a company’s home market shareholder list. ADRs trade on either the OTC Markets (OTCQX, OTCQB, PINK), NYSE or Nasdaq. ADRs are negotiable U.S. certificates representing ownership of shares in a non-U.S. company. ADRs are quoted and traded in U.S. dollars and clear and settle in accordance with U.S. market regulations. Unlike F shares, ADRs allow for payment of dividends in US dollars, with the DR Bank responsible for foreign exchange and applicable tax withholdings as well as the distribution of applicable corporate action information in English. Any non-U.S. company seeking to raise capital in the U.S. or increase their base of U.S. investor can issue ADRs. Having the option to trade and settle nonU.S. companies’ securities in the U.S. during your trading hours inherently provides flexibility and ease to investing internationally. n Violet Pagan is Head of Business Development for Australia and New Zealand at OTC Markets, you can reach out to her at vpagan@otcmarkets.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.

Having the option to trade and settle non-U.S. companies’ securities in the U.S. during your trading hours inherently provides flexibility and ease to investing internationally. n BY VIOLET PAGAN

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Raising the Bar in precious metals investing™ We believe that the most successful natural resources investors are those who have access to objective guidance. Meet Mishka vom Dorp. He is one of our resource specialists committed to helping you create a personalized resource portfolio as an integral part of your overall investment plan. Mishka vom Dorp Investment Executive Mishka vom Dorp is committed to analyzing all aspects of the junior resources market to identify and target spaces that have been overlooked by the majority of investors. He conducts his own unique form of due diligence paying close attention to entry and exit strategies, overly discounted political risk and the cyclical nature of junior natural resources markets. Mishka holds an MBA in finance and a BSB in International Business from Umeå School of Business and Economics, Sweden.

Mishka offers clients full-service investment brokerage services including: • Natural Resources Research • Advice • Monitoring Corporate Developments • Private Placements You may contact Mr. vom Dorp at 760.444.5263, or via email at MvomDorp@sprottglobal.com Sprott Global Resource Investments is a U.S. broker-dealer focused on the natural resources sectors including precious metals, base metals, oil & gas, agriculture, water and alternative energy. This content is intended solely for the use of Sprott Global Resource Investments Ltd. for use with investors and interested parties. The intended use of this material is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The investments discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a possible loss of the principal amount invested. Generally, natural resources investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Past performance is no guarantee of future returns. Sprott Global Resource Investments Ltd., affiliates, family, friends, employees, associates, and others may hold positions in the securities it recommends to clients, and may sell the same at any time. Member FINRA/SIPC Sprott Global Resource Investments Ltd. | 1910 Palomar Point Way, Suite 200 | Carlsbad, CA 92008

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F E AT U R E D A R T I C L E

Defy Industry Norms

uantitative empirical evidence shows that board diversity is good for the bottom line. Yet, the board composition of most Fortune 500 firms is comprised of a less optimal structure. According to “The Missing Pieces Report: The 2018 Board Diversity Census” published by the Alliance for Board Diversity in collaboration with Deloitte for the 2016 and 2018 censuses, women and minorities held 34% of the board seats in 2018 among the Fortune 500 companies. Diving deeper into the numbers, the figures drastically drop women minorities held 4.6% while Asian American women held 1.1%. As a newly minted public company Independent Board Director of Asian American descent and female to boot, I make this case for diversity. The board of directors, which has fiduciary duties to shareholders, is one of the strongest pillars of a corporate governance framework. Their role is to collectively set the direction and strategy for the company while meeting the appropriate interests of its shareholders. As public and private companies exist in the rapidly changing economy, diversity in executive suites and boardrooms is a solution to produce more effective strategies, and ultimately better returns, for the company. In addition to the many quantitative benefits, board diversity yields qualitative benefits such as:

n BY GRACE REYES, MBA

MicroCap Review Magazine

eFFectiVe decision-makinG Combining the contributions of people with different skills, background and experiences foster creativity in delivering solutions to problems. The collective group approaches situations from a greater range of perspectives. With multiple perspectives, the boardroom can have the optimal mix of skills, expertise and experience which is paramount to ensure that the board as a collective is equipped to guide the company with the most effective strategic plans.

hiGhly qualiFied talent pool Diversity begets diversity. The network of a diverse board is more expansive than that of a homogenous one. That network can create a larger funnel of highly qualified candidates at the board (or company) level. This then helps alleviate the diversity challenge and expands the talent pool with more women and minorities who have the full potential and skill set suited for the boardroom.

enhanced corporate reputation Reputation is everything. A video of tech CEO Michael Lofthouse of Solid8 recently went viral because of his racist rant to an Asian family at a Carmel Valley restaurant. Because of this incident, numerous posts have called for companies to stop doing business with the CEO and his company. Though he issued a public apology, it does not appear the gesture is good enough to salvage his reputation and perhaps his business. On the other side of the spectrum, a diverse board can lift corporate reputation through signaling positively to the internal and external stakeholders that the company supports diverse constituencies and embraces a culture of inclusion.

The Case for Board Diversity

For public companies where market perception affects share price, having diversity and inclusion embedded in the DNA bodes well for its reputation. For companies to have the optimal structure, their boardroom should be diverse and have a mindset that’s inclusive and supportive of women and minorities. n Grace Reyes is the CEO of The Investment Diversity Exchange (TIDE) which connects movers and shakers to promote diversity & inclusion within the investment industry. She is also an Independent Board Director and part of the Audit Committee of Professional Diversity Network. (NASDAQ: IPDN) As featured on Forbes, Entreprenuer, Thrive Global, Ms. Reyes is one of the most prominent voices in finance when it comes to promoting diversity & gender balance in the investment management industry. Having been all over the world to 40+ countries, she has formed close rapport with an array of industry leaders & prominent investors globally - relationships that have helped her bring awareness to the causes and firms that Grace represents. Grace’s message is further amplified through her top 1% investment management profile on LinkedIn where she engages with 19k+ followers and posts that have reached a total of over a million views sharing selfies and conversations with some of the industry’s best-known investors. With over 15 years’ work experience, Ms. Reyes was most recently with AAAIM, a non-profit organization advocating for Asian Americans. There, she formed domestic and global relationships that created a flourishing network. Prior to that, she was in the corporate and business development team at Switchfly, a travel tech firm, reporting to the Executive suite. As the first hire of the team, she built international relationships with influential industry leaders and opportunities with some of the top internet and travel tech firms for the company. Ms. Reyes also established and honed relationships with prominent investors when she spearheaded the investor relations and fundraising efforts at The Reliant Group, a private equity firm where she also reported to the Executive suite. Ms. Reyes was named globally as one of the Top 35 Under 35 Rising Stars by Phocuswright as well as one of ten CAIA Scholars in 2015. She is the Founder and Co-Host of goodtimesSF, San Francisco’s largest investment networking happy hour. She earned a BA degree in Economics with a Computer Specialization from UCLA and an MBA from UC Berkeley. 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.

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otcqB: curr

P R O F I L E D C O M PA N Y

cure pharmaceutical holding corp.

URE Pharmaceutical Holding Corp., OTCQB: CURR is an integrated drug delivery and development company that focuses on improving drug efficacy, safety, and the patient experience through its proprietary drug dosage forms and delivery systems. The company is developing an array of products in cutting-edge delivery platforms and partners with biotech and pharmaceutical companies. It offers CURE 3068 (CUREfilm Sleep), a melatonin-containing sleep aid CUREfilm oral dissolving film (ODF) that is used as a dietary supplement under the brand name ID Life Sleep Strips; and CURE 5079, a sleep aid containing a dietary cannabinoid CUREfilm ODF under the brand name Sleep Stripzzz. The company’s products in development stage include CURE 5003 (CUREfilm Blue), a sildenafil CUREfilm ODF, which is in the early stage clinical development for the treatment of erectile disorder; CURE 5067 (CUREfilm D), a vitamin D3 CUREfilm ODF for oral administration that is in the optimization development stage; CURE 5200, a CUREfilm ODF substrate; CURE 5209, a CUREfilm ODF for mood enhancement as a dietary supplement; and CURE 5210 (CUREfilm Beta-Caryophyllene), a dietary cannabinoid ODF that is in early feasibility stage to target the CB2 receptor. CURE Pharmaceutical Holding Corp. has a collaboration with Canopy Growth

Robert Davidson, CEO

Corporation for the development of lowdose cannabidiol oral thin films. The company was founded in 2011 and is headquartered in Oxnard, California. Robert Davidson is CURE’s CEO. Prior to his role at CURE Pharmaceutical, Robert Davidson served as President and Chief Executive Officer of InnoZen Inc., Chief Executive Officer of Gel Tech LLC, Chief Executive Officer of Bio Delivery Technologies Inc., and has served on multiple corporate boards. Mr. Davidson was responsible for the development of several drug delivery technologies and commercial brand extensions.

dea-licensed and FdareGistered: The Company develops and manufactures its CUREform™ products in Oxnard, CA. Their manufacturing facility is one of the first in the United States to receive a Schedule 1 license from the United States Drug Enforcement Administration (DEA). They are also registered with the United States Food and Drug Administration (FDA) and are a cGMP facility, committed to Current Good Manufacturing Practice regulations as enforced by the FDA.

look For the cureinside™ quality mark Starting in 2020, the partners’ products will bear our new mark of quality, CUREinside™. CUREinside™ signals products manufactured with our patented CUREform™ technology. “This quality mark highlights our commitment to high-quality products produced under supervision by several governing agencies as well as our strict internal quality standards and we partner with biotech, pharmaceutical and wellness companies worldwide, stated CEO, Rob Davidson. The Company, an innovative drug delivery and development company, recently announced

a licensing and collaboration agreement with Vanguard Scientific Systems, Inc., a premier provider of equipment, systems and performance solutions servicing the botanical extraction industry, including both the MIDAS XII, a next-generation GMP compliant supercritical CO2 extraction technology, as well as industrially scaled CO2 facility solutions. The license gives Vanguard the right to practice CURE’s patented cannabis extraction methods, providing customer confidence in choosing Vanguard’s portfolio of extraction manufacturers. “This license agreement gives operational freedom to a leader in the supercritical fluid extraction industry who is committed to pharma-grade standards continuing our powered by Cure licensing strategy,” said Rob Davidson, CEO of CURE Pharmaceutical. “Building on this license, we will collaborate with Vanguard Scientific experts to expand the licensed patent estate to cover the most recent advances in the field.” CURE has granted Vanguard rights to its portfolio of issued and pending process and composition patents for isolating cannabinoids using an advanced supercritical fluid extraction technology utilizing carbon dioxide as the solvent. While the patents cover the incorporation of cannabis extracts into multiple dosage forms, CURE has reserved all rights to applying these methods in oral thin film. For more information: www.curepharmaceutical.com n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur. The company paid consideration to SNN or its affiliates for this article.

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MicroCap Review Magazine

tsx-V: quis / pink: quisF

P R O F I L E D C O M PA N Y

quisitive technology solutions, inc.

uisitive Technology Solutions Inc, (TSXV:QUIS) is a premier Microsoft solutions provider that helps enterprise organizations move, operate and innovate in the Microsoft cloud: Microsoft Azure, Microsoft Dynamics and Microsoft 365. Quisitive also provides proprietary Software as a Service (“SaaS”) solutions such as CRG emPerform ™ and LedgerPay that complement the Microsoft platform. Quisitive serves clients globally with 300+ employees and offices in Austin, TX; Dallas, TX; Denver, CO; Silicon Valley; Washington, DC; Minneapolis, MN; Ottawa, ON; Toronto, ON; and Hyderabad, India. For more information, visit www.Quisitive. com and follow @BeQuisitive. Quisitive’s business model is focused on helping customers move, operate and innovate in the cloud. QUIS has two proprietary Software-as-aService (SaaS) solutions that help drive higher margin recurring revenue. CRG emPerform is an employee performance management solution for small and medium-sized businesses; and LedgerPay is a cloud-based payment processing and data insights software platform. LedgerPay announced a strategic go-tomarket relationship with dunnhumby - offering a first-of-its-kind service (powered by Microsoft Azure) for brick-and-mortar merchants such as quick service restaurants

Quisitive Business Model Source: Company document

Revenue Estimates Show CRG and Menlo Impact (Without Revenue Synergies or LedgerPay) Source: FactSet, Consensus estimates

(QSRs), grocers, and other retailers who want to encourage repeat and more valuable sales by capitalizing on past purchases at the point of sale (POS). We also note that Microsoft and dunnhumby announced a global strategic partnership, in a move that could transform the $5.9 trillion retail sector. Under the partnership, dunnhumby will move its customer insights products to Microsoft Azure, giving retailers and suppliers instant and secure access to dunnhumby’s data science tools.

Financials

Mike Reinhart, CEO

On 2021E consensus estimates, QUIS is trading at an EV/Sales and EV/EBITDA of 2.4x/17.2x (fully diluted) versus its North American IT Services and Global Payment Technology comparables trading at 1.5x/11.1x and 5.5x/14.0x, respectively.

We believe QUIS’s consulting business should trade in-line with IT Services companies at 1-1.5x EV/Sales, and 10-12x EV/ EBITDA, and LedgerPay should trade in-line with Fin Tech companies at 5-6x EV/Sales, and 13-15x EV/EBITDA. www.quisitive.com n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur. The company paid consideration to SNN or its affiliates for this article.

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