Micro-Cap Review Magazine Quarter 1 - 2013

TSX: SEQ
Shoreline Energy Corp.

LD MICRO CONFERENCE
LOS ANGELES CALIFORNIA, DECEMBER 5TH, 2012.
TSX: SEQ
LD MICRO CONFERENCE
TSX: SEQ
LD MICRO CONFERENCE
Exploration, Development and Production
of Petroleum and Natural Gas
www.ShorelineEnergy.ca nTicker: SEQ.TO
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Cover Story: Shoreline Energy (6)
StockNewsNow Radio Gary McKenzie (8)
A Rational, Practical and Logical Approach
to General Solicitation (9)
Organic Alliance (14)
Ask Mr. WallStreet (15)
Micro-Cap Insurance Corner (86)
Matmown (92)
Quarter 1 2013 microcapreview.com
$5.00
Raptor Ranch (16)
TheraKine Limited (25)
AccuHealth (28)
Investing in Micro-Caps
by Chris Lahiji (30)
Kesselrun Resources (58)
Graphite One Resources (66)
Targeted Market Awareness
by Robert Bobby Kraft (68)
Marksmen Energy (70)
AL International (72)
Now available for Biologics
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E D I T O R I A L
This Publication is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Micro-Cap
Review Magazine and its employees are not, nor do they claim to be registered investment advisors or broker/dealers. This magazine contains forward-looking statements within the meaning of Section
21E of the Securities and Exchange Act of 1934 relating to companies future operating results that are subject to certain risks that could cause results to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking statements. This publication undertakes no obligation to update these forward-looking statements. Micro-Cap Review Magazine, its owners,
employees, their families and associates may have investments in companies featured within this publication and may elect to sell these investments or purchase additional investments in these companies at
any time. However, the policy of our editorial staff is to avoid any pre-publication trading of featured stocks or sales until the release date of the magazine. In order to be in full compliance with the Securi-
ties Act of 1933, Section 17(b), where the publisher has received payment for advertisement/advertorial of a security, the amount and type of consideration will be fully disclosed. All information about the
Company contained within an advertisement/advertorial has been furnished by the respective Company and the publisher has not made any independent verifcations of such information and makes no
implied or express warranties on the information provided. Readers should perform their own due diligence before investing in any securities mentioned. Investing in securities is speculative and carries a
high degree of risk. All MicroCap Review Disclaimers apply http://www.microcapreview.com/disclaimer.php before investing view www.sec.gov/investors
A
s I sat down to write this editorial for our
year-end issue of the Micro-Cap Review,
I realized and reflected that I have personally
been through some tough years, as many of
you have, but 2012 for me and my family on
a personal level, was the worst of the worst.
Markets go up and down and some even go
sideways, but at the end of the day, win or lose,
its still only money. Money is replaceable.
On October 9, our precious 20 year old
daughter, Sammi Kane Kraft, tragically passed
away as a passenger in a horrific fatal car crash
in Los Angeles, California. She walked out
our door and never came home. We got that
dreaded call from the California Highway
Patrol. Sammis organs were donated which
give hope and extended the lives of many oth-
ers. To all of our readers, subscribers, friends,
and colleagues, The Kraft Family would like
to extend a warm thank you for all of your
best wishes and compassionate sympathies
expressed to our family. Your loving words of
kindness and your caring provided us with
comfort and continue to help us in our griev-
ing period. We created a website www.sammi-
girlproductions.com, produced by the Kraft
family as we plan to keep her music alive.
One reason, I brought up my personal life
is that our personal lives relate to our busi-
ness careers. As Micro-Cappers and finan-
cial media, we attend conferences and meet
many Biotech, Medtech and Life Sciences
companies devoted to developing new drugs,
devices, treatments and techniques, which
bring so much hope to others. The research,
amazing discoveries, and clinical trials that
these companies provide embody the true
essence of the emerging growth micro-cap
market and set an example of meaningful
capital raising for the benefit of humankind.
We desperately need these companies to exist,
discover breakthroughs, create new molecules
and treatments and continue to be funded.
Our mission at SNN Inc. is to bring as many
of these emerging growth companies to your
attention as possible.
Sammi would have wanted us to get on
with our lives and our business so here we are.
To the Kraft family, getting back to business
meant, among other things, putting together
this issue, the year-end/first quarter issue of
the Micro-Cap Review magazine.
SNN Incorporated will continue to provide
public and private micro-cap and emerging
growth company CEOs with a platform for
their voice, and media to tell our audience
their unique story and to increase market
awareness and investor visibility.
Shortly after Sammis passing, Hurricane
Sandy hit and smashed the east coast taking
out many of our friends and families homes
and businesses, impacting their lives forever.
This past year had so many tragedies on so
many levels for so many of our friends and
associates that we apologize for not including
them all but we are thinking of you. Micro-
cap companies, across a wide spectrum of
sectors, dependent on reaching or exceeding
revenue projections and still others hoping to
complete a funding in the fourth quarter of
the year we hope 2013 brings prosperity.
As 2013 begins, President Barak Obama is
in the White House for another four years.
Thank you, Mr. President, for signing the
Jump Start for Jobs Act into Law during your
first administration. I believe this law will have
a positive effect on micro-cap companies for
years to come.
To our friends out there in the global junior
resource sector we support you and we are
here for you!
Let me thank you, our readers, for your
continuing support on behalf of the SNN
family and the many emerging growth micro-
cap companies depending on your support.
Sheldon Shelly Kraft
Publisher n
In Loving Memory of Our Precious Daughter
and Sister Sammi Kane Kraft
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C O N T E N T S
WWW.MICROCAPREVIEW.COM
QUARTER 1 2013
9 A Rational, Practical and Logical
Approach to general Solicitation
By Nancy Cass, Esq., Mitchell D.
Goldsmith, Esq., Camilla Merrick, Esq.
19 Biotech: Outlook 2013
By Seth and Stan Yakatan
22 A New Price Paradigm for Platinum
and Palladium
By Michael S. (Mickey) Fulp
30 What to Look for When Investing in
Micro-Cap Companies
By Chris Lahiji
32 A Different Way to Invest
By Leonard Rosen
34 Restructuring a Micro-Cap Company
By Erik Nelson
38 The year (2013) of Social Media
Integration & Empowering of the Users
By Dr. Gordon Chiu
40 Attention Wall Street Shoppers
By Fred Johnson
42 Why IR?
By Keith Lippert
45 Silver Past and Silver Future
By David Morgan
52 Bright Outlook for Southeast Asian
Countries in 2013
By Leslie Richardson
56 One on One with David Drake on the
Jump Start for Jobs Act
62 growth Equity Investors Dominate
2012 PIPE Market
By Brett Goetschius
64 Introduction of the Commodity Markets
By Mark Shore
68 Targeted Market Awareness & Pinpoint
Investor Visibility
By Robert Bobby Kraft
74 New BD Formations & BD Withdrawal
Summary
By David Alsup
77 Trouble is Opportunity
By Jonathan Hornik, Esq.
80 What I Learned About graphite
By Greg Bowes
82 The Evolving Direct Public Offering Market
Shows Promise for Early Stage Companies
By Thomas Carter
86 Micro-Cap Insurance Corner
By Eugene B. Podokshik
88 Closure
By Rabbi Stephen Robbins
Financial Books
31 Caveat Emptor or Buyer Beware
Written by Sheldon Shelly Kraft
Legal, Tax & Accounting
60 The Compliance Corner By Russell C. Weigel, III
Financial Puzzle
61 SNN StockWord Puzzle
Comic Strip
79 WallStreet Chicken - Episode 7
Opinion
94 Ombudsman By Jack Leslie
Profled Companies
6 Shoreline Energy
16 grand Canyon Raptor Ranch
25 TheraKine Limited
28 Accuhealth Technologies
54 OrphanBiotec
58 Kesselrun Resources Ltd.
66 graphite One Resources
70 Marksmen Energy
72 AL International, Inc.
92 Matmown, Inc.
76 Classifeds
6 Micro-Cap Review Magazine www.stocknewsnow.com www.snnwire.com www.microcapreview.com
Superior Execution
& Growth
COVE R S TORY
W
hen we last looked in on
Shoreline Energy Corp.,
TSX:SEQ (Shoreline) in the
summer of 2012, the company was pro-
ducing 1,550 barrels or equivalent per day
(Boe/d), having doubled production since
their IPO in May 2011. This has catapulted
quarterly revenues and funds from opera-
tions up 181% and 170% through the first
nine months of 2012, respectively, allowing
the Company to reward shareholders with
$0.56 per share in cash dividends in 2012,
representing an effective yield of between
10% and 14%. Shoreline was thrilled with the
results of their first quarter oil drilling pro-
gram and was busy planning the remainder
of their 2012 capital expenditure program.
Having experienced a pullback in commod-
ity prices and challenging capital markets in the
second quarter, Trevor Folk, CEO and the exec-
utive team at Shoreline decided to take decisive
and immediate action. Mr. Folk set several
aggressive goals and strategic priorities for he
and his team to plan and execute immediately:
Accelerate the Companys light oil drill-
ing program in the Peace River Arch of
northwest Alberta by drilling an additional 6
wells in 2012, and
Execute a strategic and accretive acqui-
sition that would increase oil production
and revenues thereby improving dividend
sustainability.
Implement strategic gas hedges to pro-
tect cash flow and dividend payments.
Put SimPly Growth by
DrillinG anD acQuiSition
Mr. Folk firmly believed that now was right
time to redeploy the Companys capital
into projects and assets that would further
enhance Shorelines long-term cash flows.
By doing so while maintaining a disciplined
framework around returns on invested capi-
tal, Mr. Folk set out to differentiate Shoreline
from many of its peers.
uS exPanSion
Beginning in July, Shoreline took advantage
of rising commodity prices and began to
hedge production for the remainder of 2012
and 2013 at prices above the internal budget
requirements. Coupled with Shorelines abil-
ity to maintain a low cost of production, the
Company has generated record revenue each
month since June on the companys base
production of 1,550 Boe/d.
In August, Shoreline raised $17.0 million
in the form of an unsecured convertible
debenture with 100% of proceeds to be used
for drilling development type oil wells in the
Peace River Arch. On the first of September,
Shoreline began drilling the first of a six
oil well drilling program in the Peace River
Arch, and completed the drilling program
in late December 2012, achieving an overall
success rate of 86%. Shoreline added a total
of approximately 800 Boe/d to its account
through this investment and will begin to
receive income in the next month as pipeline
crews complete their tasks in the field.
Shoreline achieved a significant step for-
ward in accelerating its long-term growth on
November 20th, 2012 when it announced
its entry into the prolific Denver-Julesberg
Basin (DJ Basin) by acquiring a non-
operating working and royalty interest in the
Wattenberg Colorado Project for approxi-
mately $12.5 million. The Wattenberg Project
is currently an area of a large scale, low risk
horizontal development well program, using
multi-stage frac technology, led by Anadarko
Petroleum Corp. and Noble Energy Inc.,
with participation of a number of other
senior oil and gas producers. The acquisition
gave Shoreline a variety of royalty interests
ranging up to 1.45% on over 150 land tracts
spanning over 22,000 gross acres, with an
estimated 400 - 700 potential drilling loca-
tions on the acquired acreage.
The vast majority of the wells in the
Wattenberg Project are producing light sweet
crude oil. Netbacks from Shorelines roy-
alty position is forecast to average between
$75.00 and $80.00 per Boe for 2013 based
on current forward strip commodity pric-
ing, which would translate into an IRR
of over 35% for Shoreline. In addition to
moving the Company closer to its goal of a
balanced portfolio of 50% liquids and 50%
natural gas, the acquisition could poten-
tially increase Shorelines cash flow by USD
$500,000 per month by December 2013.
To further increase its footprint in
this world class project, on December 21
Shoreline announced the purchase of a non-
operated working interest in the DJ Basin.
This working interest property is operated
by Anadarko and Noble Energy, the most
active and experienced drillers on this play.
With between 100 and 150 potential drilling
locations on the working interest lands, the
future looks bright for Shoreline.
In February 2013, Shoreline closed its
third and fourth acquisitions in the DJ Basin,
where the Company acquired a pre pooled
non-operated working interest of an aver-
age of 14% over 4,500 gross acres. The new
acquisitions currently generate $400,000 to
$500,000 per month in net income and are
being actively developed with horizontal
Niobrara and Codell wells.
As of data available in November 2012,
the initial 21 wells were on production on
Shorelines royalty lands, with an additional
24 wells drilling or planned. When one
considers the 8 new horizontal wells already
on production on the Companys working
interest lands, as well as a 6 to 8 year drilling
inventory on its entire land base the company
now owns, the potential cash flow growth
from these assets could be as much as ten fold.
StrateGy iS ForminG
This management team continues to make
opportunistic, prudent decisions when
deploying its precious cash resource among
many drilling and acquisition opportunities.
Both the Canadian and U.S. assets fit the
Companys historical and future mandate
of drilling horizontal wells between produc-
ing vertical wells, thereby exploiting know
oil pools. While expanding production and
cash flows from its existing wells in the Peace
River Arch and the working and royalty
interests in the Wattenberg Project remain
its top priorities, Management continues to
evaluate other bolt-on acquisition opportu-
nities that could further diversify Shorelines
asset base and increase its long term growth.
outlook For 2013
Management is currently finalizing its 2013
capital expenditure program, which will be
based on recent success of its Peace River
Arch drilling program, and harvesting the
highly profitable potential in Wattenberg . The
Company is confident that a combination of
rising production, firm commodity prices and
its ability to operate as a low cost producer,
will sufficiently fund its drilling programs and
still pay a recurring cash dividend.
To further increase the capital flexibility
the Company announced in mid February
a private placement of common shares in
Canada, with the assistance of Macquarie
Private Wealth. The Company has been pre-
sented with several proposals to increase its
presence in the United States, and is current-
ly evaluating all options, which may include
a U.S. national exchange listing..Investors
looking for an undervalued stock with a
unique blend of growth and income should
give Shoreline Energy a look. n
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F E ATURE D ARTI CL E
A Rational, Practical
and Logical Approach to
General Solicitation
A Dramatic Shift from Exempt Private Offering to Exempt Public Offering
n BY NANCY CASS, ESq.
MITChELL D. GOLDSMITh, ESq.
CAMILLA MERRICk, ESq.
investors seeking a practical and rational
approach to comply with the new frame-
work for public advertising may find this
article of benefit to their companies.
The Jumpstart Our Business Startup Act
(the JOBS Act) requires the most sweeping
change to the Private Placement Offering
Exemption since the adoption of Rule 506
promulgated under Regulation D. Under
the current version of Rule 506, public com-
ment about an ongoing 506 offering could
jeopardize an issuers ability to rely on the
safe harbor in Rule 506. The new, proposed
F
or years the markets and regulators
have debated the pros and cons of the
prohibition of public advertising for
the sale of securities in private offerings. The
debate is not over, but the decision has been
made that general solicitation for certain 506
private placement offerings will be a reality.
While much remains the same, rules issued
by the Securities and Exchange Commission
(SEC) will place additional requirements
and compliance demands on companies that
plan to publicly promote their private place-
ments. Management, board members and
version of Rule 506(c) does away with this
limitation altogether. Under proposed Rule
506(c), a company will be free to make
public comment and advertise, as long as
the company sells its securities to accredited
investors only and takes reasonable steps to
verify that purchasers are accredited, mak-
ing it easier to reach potential investors. As
the Ohio Division of Securities notes, the
JOBS Act creates a new and unprecedented
exempt form of public offering.
The JOBS Act directed the SEC to amend
Rule 506 by July 4, 2012 to permit general
solicitation and advertisements in certain
Rule 506 offerings. The SEC has taken lon-
ger than anticipated to finalize and adopt
the proposed Rule 506(c), and companies
cannot generally solicit and advertise their
private offerings yet. The choice of Mary Jo
White as chairman of the SEC may further
delay the adoption of the proposed Rule
506(c). While timing is difficult to predict,
Ms. White has a reputation for making tough
decisions and getting things done. Now is
the time to educate your Board and consider
how it can take advantage of the proposed
Rule 506(c) and if it should be part of your
companys capital raising strategy for 2013.
know the (ProPoSeD) rule
506(c)
On April 5, 2012, the JOBS Act was signed
into law, and provides that once effective,
under the proposed new Rule 506(c), general
solicitation and general advertising is per-
missible so long as all purchasers are accred-
ited investors and the company takes rea-
sonable steps to verify that purchasers
are accredited investors, using such methods
as determined by the Commission. The
Commission has preserved the existing Rule
506 in proposed Rule 506(b) for companies
who will not engage in general solicitation,
and thus are not required to verify purchas-
ers accredited investor status.
Importantly, under proposed Rule 506(c),
companies taking advantage of the general
solicitation option will be required to prove
that the exemption applies and that they
have the documentation to establish com-
pliance. Accordingly, companies working
with their bankers and legal counsel must be
cautious and mindful of the requirements of
Regulation D and prepare and retain docu-
mentation establishing the availability and
compliance of the Rule 506(c) exemption.
reaSonable StePS to VeriFy
inVeStorS accreDiteD
StatuS what DoeS thiS
mean?
Proposed Rule 506(c) requires companies to
take reasonable steps to verify that purchas-
ers of the securities are accredited investors.
The company is not required to have actual
knowledge that a purchaser is an accredited
investor; rather, the company, after taking
reasonable steps to verify accredited investor
status, must have a reasonable belief that the
purchaser is accredited.
Most likely companies will no longer be
able to rely on investors self-certification
alone to satisfy their obligation to verify
accredited investor status under Rule 506(c).
Rather, the determination of whether the
steps taken are reasonable will require
an objective determination based on the
particular facts and circumstances of each
transaction.
The Commission has provided some guid-
ance on the factors that bear upon whether
the company has taken reasonable steps to
verify accredited investor status, including
the nature of the documentation reviewed
by the company. For example, federal tax
returns are inherently more reliable than
other types of documentation and therefore
the company may rely upon W-2 forms,
verifiable net worth statements and similar
documentation. The difficulty is that indi-
vidual investors may not want to provide the
private and personal information necessary
to establish accredited investor status, and
the company will be tempted nonetheless to
accept the investment because of its overall
belief they are accredited, even if objective
proof is lacking. If it is a fund that maintains
accredited status by virtue of all investors in
the fund being accredited a self-certification
from the fund may not suffice. The specifics
are yet to be outlined and a careful reading
of the rules by legal counsel and bankers will
be ongoing as these concepts evolve.
This is a good time to gather your team of
legal, banking and management to get every-
ch_cali2013_snn_print_ad_v3_otl.indd 1 12-10-12 2:12 PM
one on board with the specific screening
method established. Deal with the details
on the front end of an offering, to be effi-
cient and avoid providing investors with
conflicting information. Erring on the side
of obtaining greater amounts of informa-
tion will provide greater likelihood that the
Company has obtained appropriate accredi-
tation verification. Going back to investors
to get additional documents signed after an
investment has been received is challenging,
time consuming and undermines the confi-
dence of your investors and their advisors.
A company without a logical and effective
method in place to verify investor accredita-
tion might be required to offer rescission
rights to its accepted investors.
The nature of the offering also may be
relevant to determine the reasonableness of
the steps. A company that solicits investors
over the Internet or in a general publication
is expected to be required to take greater
care to verify accredited investor status than
a company that either is soliciting from
a group of investors with whom it had a
preexisting relationship or that solicits from
a third-party such as a broker-dealer with
a documented know your customer pre-
screened high net worth investors database.
Though companies need beware that not all
databases are updated nor compiled with
the information required for compliance.
The amount of the investment also may be
relevant to establishing reasonable belief. If
the potential purchaser is able to fund an
investment approaching $1 million without
financing, that could support the reason-
ableness of the companys steps.
A company that is receiving its accred-
ited investors from broker-dealers will have
an easier time demonstrating reasonable
belief and compliance. The Commission has
noted that companies may continue to rely
on third-parties, such as broker-dealers, to
verify accredited investor status. This makes
sense in light of the fact that broker-dealers
are subject to liability under the securities
laws, have obligations under know-your-
customer and anti-money laundering rules
and regulations, and are subject to inspec-
tions and examinations by the Commission
and other regulators. Thus, companies using
a FINRA Banker reduce their work and risk.
Groups, such as Investor Relations or IR
consultants will typically not have the level
of information about investors as required
by FINRA for customers, therefore it is
recommended your securities attorney and
FINRA banker be part of any decision to
work with consultants that utilize these data-
bases. Compliance is essential, not only for
the current capital raise, but also as it relates
to institutional investment, IPOs and M&A
transactions, since a critical due diligence
linchpin for each of those transactions will
be the companys ability to establish that
it complied with Rule 506(c) in its prior
financings.
tell the truth
DiScloSure what DoeSnt
chanGe
Companies should be aware that while they
do not have to register the securities when
offering and selling in compliance with Rule
506(c), they are still subject to all anti-
fraud and other federal and state securi-
ties laws. While an issuers solicitations or
advertisements may contain forward-look-
ing statements, they may not contain any
misrepresentations of material fact. Further,
companies must furnish any material infor-
mation that may be necessary to make any
information required under Regulation D
not misleading. In order to limit potential
liability, companies should consider full and
fair disclosure of all material terms and risks
and give a balanced presentation of risks
and rewards. Proper legends are essential
and no advertising should be placed with-
out review by securities attorney and your
FINRA registered banker. Remember an
error here is not a letter to a couple of inves-
tors; it can potentially affect an entire pool
of investors and is difficult to correct. Ask
yourself: is this the truth, the whole truth,
and is it said in a way people can understand
it? A company is still selling securities and
must not leave disclosure to its marketing
department.
Further, to the extent the offering is made
through a broker-dealer rather than by the
company directly, the advertisements and
solicitations will also be subject to FINRAs
content standard in NASD Rule 2210. Due
care must continue to be given to making all
necessary state and federal securities filings
to perfect the private offering or exempt
public offering exemption.
crowDFunDinG
DiStinGuiSheD
The JOBS Act introduces the highly publi-
cized crowdfunding exemption. Unlike the
proposed Rule 506(c) permitting general
solicitation, the Commission has yet to pro-
pose a rule implementing the crowdfunding
exemption, however, it has indicated that
one will be issued in 2013. Therefore, a final
Rule 506(c) will likely be adopted prior to a
crowdfunding rule.
Crowdfunding is a separate and distinct
exemption from the Rule 506(c) exemption.
The crowdfunding exemption exempts com-
panies from registration when the companies
offer and sell up to $1 million in securities
during a 12-month period, provided that
individual investments do not exceed certain
thresholds and the company satisfies other
conditions, such as using a broker-dealer or
qualified intermediary registered with the
Commission. The company also must provide
the Commission, the intermediary, and inves-
tors with certain information on an annual
basis. Importantly, under the crowdfunding
exemption, companies can sell securities to
both accredited and non-accredited investors.
The crowdfunding exemption also
expands the integration period from six
to twelve months. Under Rule 502(a), the
Commission may treat sales of securities
within a six-month period as part of the
same offering. However, the crowdfund-
ing exemption provides that crowdfunding
offerings may be integrated with all other
securities offerings occurring in the pre-
vious twelve months. This is significant
because if a company sells securities to
accredited investors under a 506(c) offering
and then later to non-accredited investors
under a separate crowdfunding offering, the
Commission may treat those two offerings as
part of the same offering, potentially result-
ing in the company losing both exemptions.
how Do i make thiS work
For me Practical StePS
Now that you are bleary eyed with regula-
tion, how do you navigate this opportunity
efficiently and establish a rational plan for
success. Do not go at this alone. While it
is vital that the companies wanting to do
an exempt public offering under proposed
Rule 506(c) wait until the final rule is adopt-
ed, this is a great time to tee your company
up. Align yourself with a team of profes-
sionals who truly understand the rules. Any
professionally who takes a laid back or kick
the can approach to compliance with the
rules will not be a good team member.
Investment bankers who work in other areas
such as mezzanine debt or IPOs might jump
on the new rule, but critical to the process is
to work with licensed professionals acutely
aware of the rules. IR groups in the micro-
cap space will try to make inroads. Contacts
in your companys industry sector are not
the key factor in successful general solicita-
tion of a private offering. It is implicit in this
opportunity to reach out to an investor pool
beyond your bankers rolodex.
Disclosures, risk factors and securities law
compliance are part of the process. Not
only is proposed Rule 506(c) not adopted
yet, but other rules or interpretations may
emerge, which could provide pitfalls for
the unwary. Furthermore either an IPO
or registration of the Company under the
Securities Act of 1934, could be adversely
impacted if a prior private offering was
not reviewed by very experienced securi-
ties counsel. Similarly, once a company is
publicly registered, should it seek to avail
itself of a Regulation D exemption in a sub-
sequent securities offering (including a PIPE
offering a private investment in public
equity), it will need to continue to comply
with the applicable disclosure and accredited
investor requirements. Therefore, a quality
securities specialist, rather than a transac-
tional attorney without up-to-date working
knowledge of the rules is a critical member
of your team.
Not every banker and attorney will be in
favor of their clients using the new rule. As
stated above the debate carries on. It will
take team work of your professionals to
efficiently and cost effectively manage issues
that will arise. Media outlets with an exist-
ing publication or portal that has a following
of investors will be in high demand as they
provide exposure to the right group of read-
ers. Media groups that expand with a related
publication to support companies advertis-
ing under Regulation D will be a specialty
to look for. The opportunity for misuse and
abuse by opening up securities sales to pub-
lic media has a strong likelihood of placing
heightened scrutiny on unregistered offer-
ings, and a company needs to work smart
and get the right guidance to be vigilant but
practical in its compliance efforts. At the
same time, public advertising will provide
companies with unprecedented access to
new capital sources, which in todays envi-
ronment should not be passed over.
Nancy Cass is an experienced investment banker
and corporate attorney. She is a co-founder of
MerchantCass Advisors, a banking firm headquar-
tered in Atlanta. She holds Series her 7, 79, 24 and
63 securities licenses and executes securities transac-
tions with StillPoint Capital, Member Firm FINRA/
SPIC. Ms. Cass is licensed to practice law in Illinois,
Florida and Colorado.
Mitch Goldsmith is a shareholder with the law
firm of Shefsky & Froelich Ltd. of Chicago Illinois.
Mr. Goldsmith advises numerous issuers domesti-
cally and abroad in a broad array of industries with
respect to their offerings and general corporate
activities.
Camilla Merrick is an associate with Shefsky &
Froelich Ltd. and counsels domestic and foreign cli-
ents on securities offerings, securities regulation and
general corporate matters.
Nancy Cass, Esq.
MerchantCass Advisors
www.merchantcass.com
Telephone: 561-889-5210
E-Mail: ncass@merchantcass.com
Mitchell D. Goldsmith, Esq., Shareholder
Shefsky & Froelich Ltd.
111 East Wacker Drive - Suite 2800
Chicago, IL 60601
Telephone: 312-836-4006
Mobile: 312-320-4657
E-Mail: mgoldsmith@shefskylaw.com
Camilla Rykke Merrick, Esq., Associate
Shefsky & Froelich Ltd.
Telephone: 312-836-4041
E-Mail: cmerrick@shefskylaw.com n

Ticker Symbol: ORGC

Organic Alliance, Inc. is a global
grower, shipper and distributor of
fresh foods focusing on the
development of Organic and Fair
Trade agriculture. Our unique
ability to grow top-quality produce
to specification in our own
greenhouses and through direct
relationships with grower partners,
gives our clients access to new
year-round supplies of Fair Trade
and Organic certified produce that
is competitively priced.
Scan Me Follow us on
Facebook
www.facebook.com
/OrganicAllianceInc

Offices: Berkeley, Ca., Salinas, Ca.
A company could have the greatest management, money
in the bank, disruptive technology, a deep portfolio of IP, huge
resources, sizable orders, a potential cure for a disease, huge
potential with high expectations but if investors dont know
about it, they wont care, and they wont buy it or invest in the
company.
In fact awareness & visibility needs to be in place before the
rubber meets the road and should begin early in the process of
funding. Achieving funding is the most important job naturally
but then the company needs to get its story out there into the
market. The Jobs Act and its adjustments to rules & regulations
change general solicitation methods and give private & public
companies more freedom to advertise and solicit investor
interest. Many consider this Act the most crucial securities law
change since the 1933 & 1934 Acts.
President Obama said the Jobs Act will remove barriers for
small businesses and will lead to job creation. New businesses
account for almost every new job created in America, the
President spoke during the signing ceremony in the Rose Garden
of the White House and added, Thats why I pushed for this bill.
The JOBS Act (Jumpstart Our Business Startups Act) removes
restrictions for small business and startups to receive broader
access to capital and investors. Its for business owners who
want to take their company to the next level; its a potential
game-changer for startups.
The above paragraph was included because our President used terms we are all familiar with like startups and small
business and access to capital and remove barriers.

SNN is dedicated to provide access to our institutional and investor database and subscribers through our products and
services. The Jobs Act provides access for investors to small private and public companies, which I coin as the new Entrance
Strategy. SNN Market Awareness and Investor Visibility begin with the entrance strategy and provide investors an ultimate
Exit Strategy.
SNN is the next step fnancial publishing, media, content, database and infotainment company providing reach and
frequency to the exact target market for funding and market awareness.
Subscribe to Ask Mr. WallStreet at info@snnwire.com place AMWS in the subject
osubscribe
Website: www.stocknewsnow.com
PROFILED COMPANIES
Grand canyon raptor
ranch
A
s the name suggests Raptor Ranch is
a birds of prey center that specializes
in breeding native raptors (hawks,
falcons, eagles and owls), but more impor-
tantly it will be an eco-tourism facility that
displays native raptors in high speed, energet-
ic out door flight demonstrations and allows
visitors to become part of the raptors world.
The customer base is a captive audience of 5
million Grand Canyon tourists.
An independent feasibility study for this
project has been conducted by Martori and
Company. After extensive research the report
states that they view Raptor Ranch as having
potential for excellent success. The busi-
ness model was also featured on the Fox
Business News program Your Questions
Your Money. The Venture Capital experts on
the program gave Raptor Ranch an enthusias-
tic thumbs up.
The location along the Grand Canyon
Corridor is a key component for success.
This location sees far more passes of National
Park tourists than any other location in the
country. To date, most commercial uses along
the Grand Canyon Corridor have attempted
to serve the traveling public; however prior
to this, none had sought to build and operate
an interactive eco-tourism facility that can be
enjoyed by all visitors young and old and that
blends into the natural setting and enhanc-
es the areas unique attributes. Coconino
County is a steward of the Grand Canyon
Corridor, and any commercial development
along this corridor is subject to the approval
of the county. County Planning and Zoning
voted unanimously in favor of this project
because they recognize this will add to rather
than detract from the Grand Canyon visitor
experience. With the approval of this unique
facility in this premium location it is unlikely
that they would ever see a need for another.
This creates a very high barrier for future
competition.
The $15.00 Raptor Ranch entry fee will
include a self-guided tour of the falconry and
natural history museum /art gallery, interpre-
tive displays, raptor breeding facilities, incu-
bation room, nursery, live raptor displays, and
the rehabilitation centers video monitoring
station. Additionally, visitors will have the
opportunity to experience the highlight of
Raptor Ranch: the amazing outdoor flying
demonstrations, that will reveal how raptors
actually act and hunt in the wild. These fast
paced exciting flight demonstrations reveal
raptors hunting techniques as they vigorous-
ly pursue mechanically simulated quarries.
Such action packed performances can be seen
nowhere else and are sure to be remembered
for a lifetime. In addition to the self-guided
tours, there are numerous visitor participato-
ry activities available for additional fees, such
as wildlife photography shoots, bird watching
excursions, hawk walks, raptor handling, and
falconry courses.
The number of visitors to the south rim of
the Grand Canyon National Park (GCNP) is
exceptionally high; however, the time spent at
the GCNP is remarkably low. While the views
from the South Rim are amazing, the region
offers little else in the way of activities for visi-
tors to spend their time and money, creating a
pent up demand.
The combination of a low cost, proven
attraction, placed within a funnel of enter-
tainment seeking tourist traffic that will find
our product highly appealing. Currently
there is no direct competition. The success
of Raptor Ranchs will ultimately lead Raptor
Ranch to become the #1 privately owned
tourist attraction in the Grand Canyon area.
The Grand Canyon Raptor Ranch is cur-
rently seeking private funding, in order to
build the premier natural tourist attraction in
the Grand Canyon area. n
No Boring Lawyers
OSWALD & YAP
Award Winning Business Lawyers
Specializing in Micro-Cap Companies
for Over 25 Years
Contact Lynne Bolduc
16148 Sand Canyon Avenue
Irvine, CA 92618
Telephone: (949) 788-8900
Fax: (949) 788-8980
E-mail: LPB@Oswald-Yap.com
www.Oswald-Yap.com
SETh YAkATAN & STAN YAkATAN
OF kATAN ASSOCIATES
Biotech: Outlook 2013
T
he field of modern biotechnology is
generally thought of as having been
born in the early 1970s with Bergs
experiments in gene splicing or when Boyer
and Cohen transferred genetic material into
a bacterium, such that the imported material
would be reproduced. As we embark into
our fortieth year of this industry, opportu-
nities for the advancement of science and
innovation abound. This article shall exam-
ine the changing business climate in which
commercial efforts for biotechnology and its
derivate products exist, and how that market
is changing for the companies seeking com-
mercial outcomes.
The only sources of cash for a biotech-
nology company are investors, partners or
grants. Since most biotechnology companies
do not yet generate revenues, investment and
partnering deals and the tracking of deals,
both in terms of the volume of deals done
and the aggregate amount of dollars, has
become a barometer for the bell-being of the
industry. With economic pressures on pric-
ing and reimbursement for drugs, the high
failure rate of new therapies in the clinic,
the limited number of new drug approvals
each year, increasing consolidation among
major pharmaceutical and biotechnology
companies, downsizing as a result of such
consolidation, and public equity markets
which allow for few if any new issuers, the
blueprint for how to build a successful com-
pany in the industry is becoming increas-
ingly more difficult to pinpoint. One thing
which is clear is that partnerships are still
the main source of capital for biotech com-
panies. Partnership transaction data for 2012
is still being accumulated, however it looks
like 2012 is on track to meet or exceed 2011
deal levels. While aggregate partnership dol-
lars for biotech in 2011 and 2012 are below
levels of 2005, partnerships still account for
in excess of 40% of the capital available to
biotechnology companies.
In 2012, biotechnology companies which
are listed in the US public equity mar-
kets are enjoying one of the better years in
recent memory. Through October 2012 the
NASDAQ Index was up 12.4%, while Large
Cap Biotech Index and the Small Cap Life
Sciences Index were each up 32.0% and
19.4%, respectively, each well ahead of the
NASDAQ. These numbers are driven by
the significant performance seen in several
subsectors, including the stocks in the areas
of ophthalmology, inflammation, and hema-
tology.
The private markets are still tough. While
aggregate global VC dollars invested in 2012
are projected to be above 2011, US invest-
ment by VCs into therapeutic companies
still trails 2009 levels as more dollars are
being pumped into potentially lower risk
health care markets such as devices and
diagnostics. VC investment in therapeutics
during 2012 is largely cluster-based. For
example, over the past four quarters close
to a billion dollars in new venture cash has
flowed into Cambridge, MA based compa-
nies through 122 deals. Thats a jump of 5%
in funds and 27% in deals. This year has also
seen an increase in the Corporate VC activity
initiated by, and done in conjunction with,
major pharmaceutical companies. Bruce
Booth, Burrill & Company and Windhover
have done extensive analysis on this sub-
ject. The analysis includes 2907 therapeutics
companies that raised venture capital dollars
between 2000 and 2010 across 5100 rounds
of financing. Corporate VCs were investors
in about 10% of companies, and this pool
of 286 companies had what appears to be
a markedly higher hit rate a ~60% higher
rate of licensing deals, M&As and IPOs. A
recent report published by NVCA/PWC in
their MoneyTree earlier this year suggested
that 18% of all biotech deals had Corporate
VC involvement in 2010 and 2011.
Merger and Acquisition activity for biotech
is still robust, exits for biotech companies are
still occurring and are still occurring at the
early stage. The 2012 merger activity has
been strong as more deals have been com-
pleted for smaller amounts, with Gileads
$11 billion Pharmasset buyout leading the
way, followed by Bristol-Myers $5.3 billion
buyout of Amylin, Glaxos $3 billion deal
for Human Genome Sciences, and Bristol-
Myers $2.5 billion purchase of Inhibitex.
Add it all up and Credit Suisse found a $25
billion deal tally through September 2012
compared to $10 billion at the same point
last year in 2011.
Deal values appear consistent in terms
of time to exits, amount of capital invested,
stage of development, multiples and spe-
cific sectors remaining attractive in terms of
buy-side needs. Typically most deals are still
being done for companies with assets that
are pre Phase-II, and have an average time
to exit of approximately4.5 years. Multiples
are steady at approximately4.5x with premi-
ums being paid for technologies and deals
at the early stage. Oncology companies lead
the way in terms of the sheer numbers of
companies which achieve an exit, with the
highest multiples still in the area of meta-
bolic disease.
Transactions continue to be the life blood
of the biotechnology industry and the key
for the survival of companies and investors.
Expect that 2013 will be no different.
Seth yakatan, co-FounDer,
Partner, katan aSSociateS,
inc.
Seth Yakatan brings more 20 years of experience as
a corporate finance professional, actively supporting
small cap and major companies in achieving cor-
porate, financing and asset monetization objectives
through the successful structuring and management
of more than several billion in completed strategic
transactions and investment.
Over the past eleven years as a co-founder of
Katan Associates (KAI), Seth has successfully struc-
tured and managed strategic alliances and deals, with
unique expertise and insight into the US and Global
Life Science sector, including numerous buy-and
sell-side M&A transactions. Completed Life Science
transactions at KAI include:
Twelve buy and sell-side M&A engagements, gen-
erating aggregate transaction value in excess of $345
million.
Numerous early-stage pharmaceutical partner-
ing assignments with aggregate value generated for
clients of more than $875 million.
Facilitation of several royalty monetization trans-
actions, 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 he completed the placement of subordinated
debt and private equity investments, totally in exces-
sive $3 billion, on behalf of the bank.
Seth began his career as a venture capital analyst
with the Ventana Growth Funds and Sureste Venture
Management, where he gained significant experience
in creating successful venture-backed life science
companies.
Seth is a recognized as an expert in the valu-
ation of life sciences companies, stemming from
industry experience and academia. He has authored
several publications and lectured and guest lec-
tured at corporate workshop and universities on
valuation theory, real-world practice and case stud-
ies and as a consultant several state and provincial
governments worldwide on commercialization and
capital access initiatives for. He has also served as
a speaker and faculty member at multiple industry
conferences including the Annual BIO International
Convention Executive Workshop Series. Seth serves
as an Advisor to Boston Communications, a com-
munications consulting firm that supports business
leaders in addressing their greatest communications
challenges, and to The Brookwood Group, a special-
ized real estate and restaurant consulting firm.
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, par-
ticipating in triathlons and long-distance cycling.
Stan yakatan, chairman,
katan aSSociateS

After 40 years as a successful CEO, entrepreneur, and
operational manager, Stan Yakatan has dedicated the
last 15 years of his career to sharing his experiences
with management teams interested in building tech-
nology based companies. His experience as an execu-
tive is far reaching as he has served in an Executive
capacity with:
New England Nuclear
EI Dupont
ICN Pharma
New Brunswick Scientific
Biosearch
Katan Associates
These experiences have provided him with man-
agement skills and a corporate finance acumen that
he enjoys sharing with others.
He has founded or co-founded in excess of 15
companies in the United States, Canada, Israel,
France and Germany and in many cases served as
the initial CEO, and Chairman of these companies.
He currently sits on the board of directors of several
public and private companies and has advised several
of the worlds leading venture capital firms includ-
ing TVM (Germany), Ventana (USA), MSP (USA)
and Biocapital (Canada). During the decade of the
1990s Biocapital was the most successful health care
venture capital fund in Canada.
Stan currently served in a business development
capacity for the XL TechGroup. XL Tech Group
systematically discovers unmet business needs, then
creates, selects, and develops new technology busi-
nesses, and scales them to liquidity. Stan assisted XL
TechGroup in the development of its business model,
and advised on the overall capitalization strategy for
XL Tech Group. In October 2004, XL TechGroup
undertook an Initial Public Offering in .
Stan has also served as s Senior Advisor in Life
Sciences to numerous State, Provincial and Federal
government agencies These roles have been largely
in a effort to assist in the development of govern-
ment incentives and initiatives to foster and develop
regional Life Science clusters. These efforts include
work in Canada from 1993 to 1999, Israel from 1999
to 2001, and Victoria, Australia from 2002 to 2008.
Stan has completed and advised on numerous
acquisitions and corporate finance transactions rais-
ing in excess of $1.0 billion dollars in the public and
private capital financing markets. He is a frequent
speaker at financial and biotechnology conferences
throughout the world speaking on topics including,
Capital Raising for the Technology-Based Start-Up
and The Need to be Global in the Quest for Capital
and Partners. Rick Biondi, Editor of Lab Business
Magazine stated, Mr. Yakatan is a venture capital
raising Guru and it is part of his genetic make up.
Stan has been the Chairman of several pub-
lic companies. Stan founded and served as the
Executive Director and Chairman of Biocomm, in
Melbourne, Australia, the first of its kind regional
business development agency and early-stage capi-
tal pool. Stan currently is Chairman of the Board
of Mercury Therapeutics, Inc. which is developing
new drugs AMP kinase based drugs for the treat-
ment diabetes and cancer and sits on the Board
of Directors for Phenomenome Discoveries, Inc.,
a novel biomarker company. Recently Stan was
appointed to the Teaching Faculty at Skolkovo School
of Management in Moscow. Stan currently serves as
CEO of TheraKine, Ltd.,a privately held company
with a novel drug delivery technology for biologics
and small molecules that address drug delivery chal-
lenges in multiple therapeutic areas n
Russia at 40%, followed by Canada, the
United States, and Zimbabwe.
As with many commodities, the United
States is largely dependent on foreign sup-
plies: 91% of our platinum and 54% of
palladium consumption are imported. We
consume nearly half of the worlds platinum
and 30% of its palladium supplies.
Because of their rarity and physical prop-
erties, platinum and palladium are consid-
ered precious metals and used in jewelry
and investment coinage. However because
demand is dominated by industrial appli-
cations, they are actually hybrid metals.
Industrial use is overwhelmingly for chemi-
cal catalysts and dominated by exhaust sys-
tems for automobiles and trucks.
In 2011, platinum use stood at 38% for
auto-catalysts, 31% for jewelry, and nearly
6% for ETF investments. Other important
demand came from the glass, chemical, elec-
tronics, petroleum, and medical industries.
Palladium use was dominated by auto-
catalysts at 71%. The electronics industry
consumed 16% and dental, chemicals, jew-
elry, and minor uses constituted the remain-
der. There was a significant net outflow from
ETF investments in 2011.
A New Price
Paradigm for Platinum
and Palladium
As a group, these metals are rare in the
Earths crust, silvery-white, malleable, and
dense. They are highly resistant to wear,
oxidation, and corrosion, have stable high-
temperature and electrical characteristics,
and exhibit catalytic properties.
The two metals are produced from prima-
ry mines and as byproducts from nickel and
copper refining. They occur in unusual and
specific geological environments in relatively
few places on Earth. The largest deposits cur-
rently exploited are the Bushveld of South
Africa, Norilsk in Russian Siberia, Great
Dyke of Zimbabwe, Sudbury, Ontario, and
Stillwater, Montana.
According to USGS estimates, 2012 plati-
num mine production was 179 tonnes and
palladium was 200 tonnes, down 8% and 7%
from respective 2011 levels. Recycling con-
stituted about 29% of total supply. However
compared to 2012 gold production of about
2800 tonnes, these are small markets sup-
plied by a few big mines and companies.
South Africa dominated production at
74% with Russia at 13%. Remaining supplies
came mostly from Zimbabwe, Canada, and
the United States. Palladium mine produc-
tion came from South Africa at 41% and
n MIChAEL S. (MICkEY) FULP
P
latinum (Pt) and palladium (Pd) are the two most commonly used
of the six platinum-group metals (aka platinoids), which also
include rhodium, ruthenium, iridium, and osmium.
Because much of the worlds supplies
come from geopolitically unstable, corrupt,
and/or unfriendly countries and are domi-
nated by a few major mines, districts, and
companies, platinum and palladium are sub-
ject to supply and demand imbalances and
price volatility:
Since the price of gold was floated on
world markets in August 1971, the platinum
to gold price ratio
(Pt : Au) has been greater than one (>1.0)
about 85% of the time. Average monthly
price ratios since 1970 are charted below:
Ratio reversals (<1.0) occurred at various
time periods lasting from over two years to
a one month spike in December 1992 when
the historic low was set at 0.78. The most
recent reversal was from November 2011
thru mid-January of this year.
Since 1970 the price ratio of platinum and
palladium has varied generally between 2.0
and 5.0, largely reflecting palladiums inher-
ent price volatility compared to platinum:
Palladium price was fixed at the nominal
price of gold ($35-36/oz) until mid-1972.
From January 2000 to mid-2001, historic
lows less than one (<1.0) occurred when
rumors spread that Russia would cease stock-
pile sales to the West. Hoarding by American
auto companies caused the price to briefly
soar over $1000/oz. But then Russias bal-
ance of payments suffered, palladium was
dumped on the market, and the price went
parabolic. By July 2003, the metal reached a
monthly average low of $162/oz. Ratio dis-
ruptions on the high side (>5.0) occurred in
1983-1984 and when auto industry demand
collapsed during the global economic crisis
in early 2009.
My interest perks whenever an anomalous
Pt : Au ratio (< 1.0) occurs over a significant
time span. This indicates that platinum is
oversold and presents a buying opportunity.
Such was the case beginning in November
2011; only recently has the ratio gone back
over 1.0.
Several factors have caused platinum and
palladium prices to rise substantially since
Data Courtesy of Kitco.com
early August:
In 2012, South African and Zimbabwean
miners engaged in widespread, violent
strikes resulting in severe supply disruptions
and constrained market supplies.
An estimated 60% of South African
mines currently operate at a loss or at break-
even.
Economic conditions in the United States
and China continue to improve and that has
stimulated automotive sales and increased
demand for platinoids.
Increasing environmental regulation of
the auto industry in emerging market coun-
tries has resulted in higher demand, espe-
cially for palladium.
Although information from Russia oper-
ations is closely guarded and always opaque,
it has been widely reported that historic pal-
ladium stockpiles are depleted and exports
will cease this year.
Analyst consensus for significant 2013
supply deficits in both metals has led specu-
lators to accumulate net long positions.
In my opinion, there is a new price para-
digm developing for platinum and palla-
dium. The supply-side case is particularly
compelling with the economic viability of
most primary platinum-palladium mines
not economic given current price regimes.
Unless prices rise substantially, South
African supply disruption will evolve into
long-term destruction. The bullish case is
strengthened if Russian palladium exports
are indeed ending.
To my knowledge, there are no new major
mines that can replace these looming reduc-
tions in platinoid supply.
For a myriad of reasons, I maintain an
ebullient view of platinum and palladium
supply and demand fundamentals and pre-
dict that prices will remain robust for the
short- to mid-term.
Michael S. (Mickey Fulp
Contact@MercenaryGeologist.com
Acknowledgement: Michelle Lopez is the editor of
MercenaryGeologist.com.
The Mercenary Geologist Michael S. Mickey Fulp
is a Certified Professional Geologist with a B.Sc.
Earth Sciences with honor from the University of
Tulsa, and M.Sc. Geology from the University of New
Mexico. Mickey has 35 years experience as an explo-
ration geologist and analyst searching for economic
deposits of base and precious metals, industrial min-
erals, uranium, coal, oil and gas, and water in North
and South America, Europe, and Asia.
Mickey worked for junior explorers, major mining
companies, private companies, and investors as a con-
sulting economic geologist for over 20 years, special-
izing in geological mapping, property evaluation, and
business development. In addition to Mickeys profes-
sional credentials and experience, he is high-altitude
proficient, and is bilingual in English and Spanish.
From 2003 to 2006, he made four outcrop ore discov-
eries in Peru, Nevada, Chile, and British Columbia.
Mickey is well-known and highly respected
throughout the mining and exploration community
due to his ongoing work as an analyst, writer, and
speaker.
Contact: Contact@MercenaryGeologist.com
www.MercenaryGeologist.com
Twitter: @mercenarygeo
Disclaimer: I am not a certified financial analyst,
broker, or professional qualified to offer invest-
ment advice. Nothing in a report, commentary, this
website, interview, and other content constitutes or
can be construed as investment advice or an offer
or solicitation to buy or sell stock. Information is
obtained from research of public documents and
content available on the companys website, regula-
tory filings, various stock exchange websites, and
stock information services, through discussions with
company representatives, agents, other professionals
and investors, and field visits. While the information
is believed to be accurate and reliable, it is not guar-
anteed or implied to be so. The information may not
be complete or correct; it is provided in good faith
but without any legal responsibility or obligation to
provide future updates. I accept no responsibility, or
assume any liability, whatsoever, for any direct, indi-
rect or consequential loss arising from the use of the
information. The information contained in a report,
commentary, this website, interview, and other con-
tent is subject to change without notice, may become
outdated, and will not be updated. A report, com-
mentary, this website, interview, and other content
reflect my personal opinions and views and nothing
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national copyright protection and no part or portion
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other content may be altered, reproduced, copied,
emailed, faxed, or distributed in any form without
the express written consent of Michael S. (Mickey)
Fulp, Mercenary Geologist.com, LLC. n
Data Courtesy of Kitco.com
PROFILED COMPANIES
therakine limited: tunable
toolbox for Drug Delivery
T
heraKine Limited (TKL) is a
privately held Irish drug delivery
company with research facilities in
Berlin, Germany. Founded in June, 2006, the
Company has developed a variety of novel
drug delivery technologies for biologics and
small molecules that resolve many challenges
and are applicable in many disease thera-
pies. The Company has multiple patents
approved, pending, and in preparation.
The global market for biologic drugs is
worth over $60 billion a year. The limita-
tion on this is that biologic drugs have to be
injected or infused repeatedly. Depending on
the drug, daily or weekly injections are the
norm; this limits the potential indications,
has safety complication, and is very incon-
venient for the patient while being expensive
for the health care system.
In addition, the biologic pharmaceuticals
industry is facing soaring R&D costs, an
impending onslaught of patent expirations
(over half of the patents expire by 2017), and
increasing demands for improved medica-
tions. Novel drug delivery technologies are
strategically compelling as a product line-
extension or life-extension strategy for many
global pharmaceutical and biotechnology
companies. The utilization of such novel
drug delivery technologies also has a highly
favorable risk-reward profile. Meanwhile,
their competitors see drug delivery as a com-
pelling competitive advantage that moves
them from bio-similar to bio-better sta-
tus.
These companies are recognizing that drug
delivery technologies are a powerful strategic
marketing tool to differentiate products and
extend product life cycles, thereby over-
coming many marketplace challenges. They
are pursuing stronger alliances with drug
delivery companies, including acquisitions,
to enable them to develop superior drugs
and remain competitive. The market for
advanced drug delivery systems is expected
to mushroom from $42.8 billion in 2010 to
$75.3 billion in 2015.
TheraKine has developed sustained
release delivery technology platforms for the
local delivery of biologic drugs and small
molecules. The lack of injectable long-term
delivery systems has been considered to be
one of the unmet medical needs preventing
progress in biologic therapy. TKLs tunable
sustained release technology now enables
linear release of drug products with dura-
tions from weeks to many months.
To date the company has been funded
with almost $2.5MM of private investment
and grants. Currently, the technology plat-
form is the subject of on-going commercial
collaborations with major biotechnology
companies and federal government agencies.
For example, anti-VEGF biologics are
used to treat wet Age-Related Macular
Degeneration (AMD), and these require
monthly injection into the Human Eye.
We have demonstrated that we can change
that interval to three or six months, which
is substantial relief for the patients and the
treating physician. Anti-TNFa, used for vari-
ous rheumatological diseases, could, when
formulated, replace months of routine injec-
tions with a single therapy according to Dr.
Andeas Reiff.
There are many advantages to local sus-
tained release in therapies for common dis-
eases. Obviously it is better to give one injec-
tion every six months than one every week,
sparing patients and physicians the other 23
injections needed in that same time. Many
patients currently on biologic drug thera-
pies are receiving long term therapy; think
of rheumatoid arthritis, Crohns, AMD, and
similar conditions where the patient will be
treated for life. In these patients, reducing
the injection frequency is a tremendous ben-
efit to quality of care, compliance, and cost.
There are also potential advantages in
terms of safety and efficacy: a sustained
release injection would allow very stable
levels of the drug to be maintained, instead
of the up and down dosing that occurs with
repeated routine injections.
For pharmaceutical companies facing end
of patent life with a high-value drug, refor-
mulation for sustained release provides new
life and new patent protection, preserving
the value of established franchises.
TKLs tunable Toolbox technology has
been developed to enable sustained release
of such proteins and macro-molecular drugs
through local injectable resorbable depot
formulations. The technology can be applied
in therapeutic areas such as ophthalmology,
oncology, neurology, neuro-oncology and
rheumatology. Expansion into cosmeceuti-
cals, dermatology, and veterinary application
are all being investigated.
All formulations use existing approved
ingredients that are generally regarded as
safe (GRAS). This will minimize regula-
tory overheads, safety concerns, and costs of
development and trials. Demonstrated fea-
sibility with commercially available biolog-
ics is available for review, along with small
molecules, peptides, and generics.
In contrast to conventional chemistry or
nanotechnology methods, TKLs matrix for-
mulation approach is based on physical
chemistry, primarily physics in the nano-
scale achieved by macroscopic processing.
Biologic drugs are large molecules (pep-
tides) and have molecular properties that are
uniquely suitable to TKLs approach. Where
previous methods tried for sustained release
have depended on the creation of chemi-
cal bonds or nano-scale containers, TKL
exploits the physics of the peptide molecules
directly to create sustained release matrixes.
Key to the medical utility of TKLs tech-
nology toolbox is that the active drug is not
modified in any way, and remains chemically
and structurally unchanged. This has signifi-
cant advantages by being compatible with
current pharmaceutical formulation meth-
ods, reduces development time, and may
dramatically reduce the regulatory burden
when used with already approved biologic
drugs.
The graph above shows TKLs ability to
tune release kinetics using the Toolbox tech-
nologies, in this case for four to seven months
of duration. By exploiting the nanophysics
of the biologic drugs, TKL can achieve most
desired therapeutic dosing requirements.
Shorter durations are also possible.
We are currently delivering the matrix as
a suspension for injection with needles as
small as 27 gauge, but paste and semi-solid
forms are also possible, as well as topical for-
mulations. Used in conjunction with existing
interventional methods (guided injection or
catheters), local delivery to every organ in
the body is feasible, even inside the blood-
brain barrier.
Because we can use a large variety of
ingredients to create matrixes that can be
hydrophilic or hydrophobic, and vary the
processing conditions to adjust the release
kinetics from days to many months, we refer
to this as a Toolbox Technology a com-
prehensive platform solution that enables
almost any desired therapeutic profile for
biologic drugs.
Routine assessment of release kinetics
is performed using conventional labora-
tory methods. Various Toolbox formula-
tions have been independently tested at the
Charit University in Berlin, the University
of Cork, the University of Potsdam, the
Vardinoyiannion Eye Institute of Crete
(VEIC), and the United States Air Force
(USAF). Parner pharmaceutical firms have
also performed their own tests, and the com-
pany will be entering pivotal trials shortly.
Since TKLs Toolbox uses GRAS materi-
als, commercial partners can seek the low-
est-risk submission pathway whenever they
have an already approved drug. This path is
defined in 505(b)(2) of the Food, Drug, and
Cosmetic Act, and requires only that the new
functionality be supported by an additional
trial establishing safety and at-least equiva-
lent efficacy. To support this, TKL will be
conducting key studies that will be submit-
ted to the FDA so that commercial partners
An assortment of release kinetics possible using the Toolbox 4 to 7 months
can reference those results without having to
perform those studies themselves.
in Summary
TKL has a Toolbox of technologies that
enable sustained local release of biologic
drugs, peptides, and other difficult to for-
mulate drugs.
These technologies may also be useful
with many classic small-molecule drugs.
Only GRAS materials are used to for-
mulate the injectable matrix. The properties
of the matrix dose, release kinetics, tissue
compatibility, and more are all tuneable.
The resulting drug delivery matrix sta-
bilizes biologic drugs so that they are still
active even after many months. Test systems
have exceeded one year of linear release
kinetics.
Release durations from a few days to
over six months have been demonstrated
and both linear and non-linear kinetics
can be tuned into the matrix using the TKL
Toolbox.
The regulatory path for the resulting
therapeutic has been reduced as much as
possible, in compliance with FDA and EU
regulations.
No chemistry is involved. The formula-
tion exploits the properties of the biologic
drugs to achieve long release without any
changes to the drug.
The Toolbox has been shown effective
with a variety of biologic and conventional
drugs, with data available for review.
Feasibility testing with new drug candi-
dates can be done quickly.
In conclusion, the novel and tuneable, site
specific drug delivery technology developed
by Therakine offers an excellent investment
opportunity for a pre IPO company in the
biotech space. For more information: www.
therakine.com n
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Other Shareholder Collateral
Cardiologist, Founder and CEO of
AccuHealth Technologies, Dr Elizabeth
Ofili, describes the mobile technology inno-
vation which uses persuasive self moti-
vation to empower people with chronic
health conditions to tackle the intractable
problem of non adherence to treatment and
behavior change. According to Dr Ofili, who
has practiced cardiology for over twenty
years I share the deep frustration that my
patients experience, because they are not
able to overcome the challenges of multiple
co-occurring chronic health conditions like
heart disease, diabetes, high blood pres-
sure and high cholesterol. Many patients
fall short in their attempts to sustain the
increasingly complex regimen of medica-
tions and behavior change that these condi-
tions demand
Dr Ofilis experience underscores the enor-
mous challenge of managing chronic health
conditions. Over 184 million Americans
are affected by one or more of the fol-
lowing chronic diseases: heart disease, can-
cer, mental disorders, chronic lung disease,
chronic kidney disease, hypertension, diabe-
tes, arthritis and stroke. Each year, chronic
diseases cost the nation a staggering $264
billion, due to health complications and lost
efits, behavior change and medication adher-
ence. We have been particularly impressed
with the superior clinical outcomes of com-
munity based participants, compared with
their counterparts in primary care practices.
e-Healthsystrides has enabled a disrup-
tive innovation by showing the power of
social networks; consumers are motivated
to monitor and manage their health outside
the doctors office
Greg Ofili leads the design team for
e-Healthystrides mobile solution: our focus
remains on the consumer experience; we
have mirrored the data rich component of
the web application, and have integrated
additional features on cell phones and tablet
mobile platforms . For example, physical
activity automatically connects to Google
maps and calorie calculators as new decision
support tools on the mobile platform
The technologies developed by AccuHealth
will drive innovations of person centered
chronic illness care. The Affordable Care Act
is accelerating incentives for a value based
health care delivery model. Technologies
like e-Healthystrides will emerge as market
leaders by aligning incentives that moti-
vate consumers to sustain healthy behav-
iors and medication adherence. AccuHealth
Technologies Inc. has the team, business
model, competitive advantage and expertise
to drive innovation in personalized e-Health
applications. For more information, please
visit www.accuhealthtech.com. n
productivity. Since patients with chronic
diseases spend the majority of their time
outside the healthcare system, mobile tech-
nologies should sustain cost effective person
centered prevention and intervention.
AccuHealth Technologies Inc. has assem-
bled an impressive team of talented software
engineers, physicians and communications
specialists, to design e-Healthystrides for
the ultimate consumer experience. According
to Bethany Saint Clair, Chief Technology
Officer at AccuHealth Technologies, I have
been developing health technology soft-
ware for over fifteen years. This IP pro-
tected innovation shows Dr Ofilis vision and
commitment to commercialize personalized
technologies that improve health and well-
ness. e-Healthystrides allows consumers
to connect with multiple devices such as
blood pressure monitors, glucometers and
pedometers. Color coded decision support
tools, enable consumers to manage their
health. An important feature is a graphic
trend of multiple health indicators which
facilitate communication with health coach-
es and physicians.
Dr Priscilla Pemu, Chief Medical Officer
at AccuHealth Technologies has successfully
tested the application in over 300 patients,
in community settings as well as in primary
care practice settings. A significant improve-
ment in health outcomes was found as a
result of this clinical study. Patients worked
with health coaches to sustain clinical ben-
PROFILED COMPANIES
accuhealth technologies:
empowering Person centered health and wellness
Y
ou could feel the palpable excitement in Atlanta during the
2013 Southeastern Medical Device Association conference on
February 19-20, 2013.
www.accuhealthtech.com
eHealthyStrides:Colorcodedfeedbackdecisionsupport
www.accuhealthtech.com
What to Look for When Investing
in Micro-Cap Companies
I
have always wondered why Vegas does
not excite me when it comes to gam-
bling.
Thats because I gamble every day in
the stock market.
I know gamble is a bad word when it
comes to investments, but lets face it.
Most micro-cap companies fail.
You lose all your money.
We can get in to all the reasons why most
small public companies do not accomplish
their goals or execute on their strategies,
but that is for a later time.
What I will discuss are things that we
look for in companies before making
investments in them.
options, preferred convertible notes, and
debts, anything that is a mechanism of
dilution.
Over the past ten years of investing, our
share counts in positions of size have been
getting smaller and smaller and smaller.
inSiDerS buyinG
The greatest investor relations one can
do is to buy their own stock. Even more
points if the CFO buys (because he is
running the books), and super points if
several members of management and the
Board buy shares.
As an investor, you can fully devote
yourself to learning about the intricacies
about a specific company for years and still
not have the same insight some of these
insiders do.
Actions speak louder than words. When
wallets open, pay attention.
caSh Flow breakeVen /
ProFitability
The chances of survival greatly increase
when a company gets to breakeven or
makes money.
Those that dont, continually need to
raise, dilute, and hope for the best.
A lot of this is common sense, patience,
and some luck.
The trick is to be in the game, work
hard, and hope that your name ultimately
gets discovered. n
n BY ChRIS LAhIjI
www.ldmicro.com
PeoPle
Management is the most important part
of the equation. Hands down.
The guys at the top of the totem pole set
the tone for everyone else.
A wise man once said that he would take
an A team with a C product any day
over an A product and a C team.
You have to ultimately invest in people
that you think can get the job done with-
out using excuses, hyperbole, and disre-
gard for the shareholders best interest.
The micro-cap world is littered with
undervalued companies with inept man-
agement teams that do nothing but milk
their company year-in and year-out.
Whether its exorbitant salaries, cheap
stock option bonuses, or hiring members
of the family to positions of power, it
stinks and you probably wont make any
money.
The qualities Im looking for in a person
are drive, contacts, previous background,
solid boards, and an intense focus on what
needs to be done to get the company (and
its share price) to the next level.
Why the hell do you think we host a
couple of events every year? Its for guys
(including ourselves) to meet with the
management teams.
Share Structure
The less shares, the better.
Common stock should be more valu-
able than gold.
We try to stay away from companies
who have big share counts, huge warrants,
A Different Way to Invest
Needless to say, investing in the capital mar-
kets, equity markets or hard assets such as
gold or silver have their potential for upside
and certainly come with some challenges.
Gone are the days of buying a mutual fund
and holding it for years with the hopes of
retiring with your nest egg. The markets are
dynamic and move fast, and only the savvy
investor survives.
declined him for various reasons. The prop-
erty is conservatively valued at $500,000,
the property is free and clear of all encum-
brances and the borrower needs $250,000.
This particular scenario has a 50% loan to
value. You are lending on the property at
half its value. Both you and the borrower
have a vested interest in the property, but
you have only lent on 50% of its current
value. The borrower pays a interest rate of
between 10 to 13%, secured by a first deed
of trust. In order for you to lose money, the
property would have to lose 50% of its value
and the borrower would also have to stop
paying. This type of investment is called a
hard money investment, because you have
control of the hard asset. Unlike the equity
markets, you have much more control of
your investment.
Obviously, this type of strategy for invest-
ing is not for everyone, but once you under-
stand the concept, its a fairly easy business
model to understand. There are also real
estate funds that can be invested in that do
all the work for you, but use a methodology
that is consistent with the model we have
discussed.
For more information on hard money
lending, our website is an excellent
resource www.pitbullconference.com
Leonard Rosen is nationally known as the expert in
hard money lending and provides national confer-
ences for the industry.
Always consult with your financial advisor before
you invest. This article is not a solicitation or offer to
sell securities. n
n BY LEONARD ROSEN, cEo
Pitbull confErEncE inc.
So what are the interesting and unique
investments for the next generation? Hard
money lending for real estate is an option
that many investors have found to be attrac-
tive. This is not your traditional real estate
investing as you may have come to know, but
its a niche way of investing with a conserva-
tive return with much less exposure than
the equity markets. Its a simple concept that
most people can wrap their heads around.
Heres how it works.... Because of tighten-
ing credit markets and difficult underwrit-
ing guidelines, most banks are reluctant to
deploy capital in the real estate market. This
is due in part to the 2007 real estate implo-
sion and reckless lending practices by several
large mortgage underwriters. These factors
coupled with a recession in the U.S economy,
forced real estate valuations to recede signifi-
cantly in many major markets.
Heres the rub.... You are probably think-
ing, why would I want to invest in a market
that was hit by recession and properties
values have decreased? The answer is simple,
where there are challenges in a market, there
are opportunities. Because banks are not
lending on commercial property or non
owner occupied houses as they were in the
past, a private investor has the opportunity
to lend to the borrower at the new valuations
and receive a reasonable dividend yield.
How it works.... Lets assume a borrower
comes to you with a small commercial build-
ing that needs financing. The borrower has
already approached the bank and the bank
W
ith 2013 upon us, many investors take a second look at their
portfolios. Some scratch their heads wondering what hap-
pened to their money and others think they can do better.
potential investment. Our focus is going to
be on those micro-cap companies that are
generating revenue.
Micro-cap companies are generally
defined as those with market capitalizations
less than $300 million in value. Most micro-
cap companies have either a limited amount
of revenue or no revenue at all, and many
are essentially start ups where the value of
the company really lies in the products and
services being developed. Many of these
companies have very small management
teams that usually own a significant por-
tion of the companys common stock; and
as a result wholesale management changes
as typically seen in large companies are not
an option for micro-cap companies going
Restructuring a
Micro-Cap Company
It is not uncommon to come across a com-
pany with what seams to be very promising
products or technology that is trading at a
deep discount to what its perceived valua-
tion should be. For sharp investors, selecting
the right company to invest in can be very
rewarding. However it is very important to
know what type of company you are looking
at. Is this a growth company, where new
products and services could lead to a signifi-
cant increase in sales and profitability? Or is
it a turnaround/restructuring situation? It
is important to know the difference between
the two types as they require a different
form of analysis. In this article we will take
a look at evaluating a micro-cap company as
a turnaround or restructuring situation as a
n ERIk NELSON
M
any sharp investors have learned the benefits of reading through a companys annual
and quarterly reports, as well as other public filings.
through turnarounds or restructurings. The
majority of companies that are in need of a
turnaround or restructuring find themselves
in a distressed situation; primarily due to
either cash flow issues or the market for
its products and services has evolved and
the company has not managed to keep up
with the changes in the market. Therefore
when evaluating a potential turnaround or
restructuring situation, it is important to
ask three (3) primary questions regarding
a companys ability to restructure and turn
itself around: Can the company reduce
its expenses and deploy capital where it is
needed? Can the company increase its sales
and cash flow? Can the company obtain
additional financing on terms favorable to
existing shareholders? If yes can be answered
to these three (3) questions, then a company
has the potential for a successful turnaround
or restructuring. If of the answer is no to any
of these questions, then it is best to move on
and look at something else.
For those companies that have revenue
and are in need of a corporate turnaround,
the most important thing is to reduce the
companys expenses and get the company
cash flow positive as quickly as possible in
order to stop the drain on the companys
financial reserves. This is very important as
it will buy the management of the company
time to deal with the other problems facing
the company. The quest to get a company
cash flow positive can involve several differ-
ent tasks from restructuring debt, cutting
expenses, and increasing sales; with the solu-
tion usually involving some combination of
all three.
For many companies involved in a turn-
around or restructuring situation, restruc-
turing the companys debt is a key part of the
part of the process. I have worked on several
debt restructuring projects, and they have
all involved having serious discussions with
the holders of the debt about the future of
the company. The success or failure of these
discussions will depend a lot on the relation-
ship the company has with its debt holders
and if they see greater value in the company
continuing in operation. If the debt hold-
ers can be convinced there is value to the
company as an ongoing entity and they have
a good relationship with the management of
the company, then there is a good chance
that they will agree to some form a debt
restructuring. Usually these debt restructur-
ings involve converting the debt to equity,
or some portion of the debt to equity and
a reduction in the interest rate, resulting
in a reduction in the interest payments on
the remaining debt. However, if the debt
holders believe they have a better chance of
recovering their investment by either seizing
collateral or by liquidating the company, it
may be nearly impossible to get a deal done
to restructure the debt.
Reducing the overall expenses of the com-
pany and eliminating unnecessary expense
items is a key component of any turnaround
and restructuring. Sometimes this will
involve a reduction in the staff or number of
employees, other times it will involve elimi-
nating unnecessary items that the company
can really do without. The key component
of the process is to successfully determine
what is an essential item and what a com-
pany can live without.
Often overlooked or ignored in a turn-
around is how can a company increase the
sales of its existing products or develop new
revenue streams. This is a three pronged
approach. It is very obvious that the high
profit margin products and services need to
be expanded or given additional resources
so sales can be increased. The lower margin
or unprofitable products and services need
to have a full review with the goal of deter-
mining how sales and profit margins can be
increased. If these goals cannot be accom-
plished then a company needs to seriously
look at either selling these product lines or
discontinuing them. The next thing a com-
pany needs to do is to determine how and
where it can add new products and services
to create new revenue streams. This can be
one of the hardest parts of the entire restruc-
turing, determining where new opportuni-
ties are and how to take advantage of them,
but it is ultimately key to the long term
survival of the business. For most of these
companies they got into trouble because
their product mix was not where it needed
to be, and reconfiguring their product mix is
key to their future.
It is also important to understand if the
company will need to obtain additional
financing in order to complete its turnaround
and restructuring. The potential financial
sources for a company going through a
restructuring is primarily limited to strate-
gic investors, shareholders, and investment
companies that specialize in investing in
turnarounds and restructurings. A strategic
investor is usually thought of as a business
partner to the company who sees significant
value in the companys product and services
and decides to make an investment in order
to secure access to those products and servic-
es. Since strategic investors usually seek to
maintain good relations with the company
and its management, which typically owns a
significant portion of the common stock in
a company, the strategic investors will usu-
ally invest in a manner that avoids massive
potential dilution to existing common stock
shareholders. A good example of this is
many years ago when Apple, Inc. AAPL was
in not doing well financially, and Microsoft
Corp. MSFT invested in Apple through a
special class of preferred stock.
Investment firms that specialize in invest-
ing in distressed companies often do so with
an eye towards potentially taking over the
Reducing the overall expenses of the company and
eliminating unnecessary expense items is a key compo-
nent of any turnaround and restructuring.
companies they invest in. They are gener-
ally going to structure their investments in
a manner that places a lot of restrictions on
the management of the company, and its
common stock holders. They will almost
always structure their investments in a man-
ner that allows them to take over the com-
pany if things do not work out as planned;
and when this happens the common stock
holders are usually wiped out. Obviously, if a
company you are looking at is in the process
of obtaining financing from one of these
types of investment firms you will want to
remove them from consideration as a poten-
tial investment.
It is usually a good sign when a com-
pany has deep pocketed shareholders who
are willing to step up to the plate and
increase their investment in the company.
When done properly, these shareholders will
work to assist the companys management
in gaining the resources needed to complete
the turnaround, as well as structure their
investment so that existing common stock
shareholders will be able to participate in
the upside potential of the company as well.
As a potential investor in a micro-cap
company that is in need of a turnaround
or restructuring there is an opportunity for
very outsized gains to be realized. However
it requires a substantial amount of work
in determining if a company has the abil-
ity to effectively execute a turnaround or
restructuring. When doing your homework
on these companies, do not be afraid to pick
up the telephone and call the management
at the company to see what they have to say.
Be a little skeptical when talking to them and
do not take everything they say at face value.
However with some hard work you should
quickly be able to figure out who is being
straight forward and honest with you and
who is not. Only invest in those companies
where you believe what the management
is saying, and you believe the company can
answer yes to the three questions at the
beginning of this article.
about coral caPital
PartnerS anD erik nelSon
Erik Nelson is the President of Coral Capital
Partners, an independent consulting and advisory
firm focused on companies and participants in the
lower and middle markets. Coral Capital Partners
provides cost effective solutions to real world issues
and situations. Coral Capital Partners, Inc. provides
services to Investment Banks, Private Equity Funds,
investors, and both privately held and publicly traded
companies, as well as various stakeholders in those
organizations. This has included international public
companies with operations on three (3) continents
to smaller privately held domestic companies. Our
experience in the areas of corporate advisory, due
diligence reviews, and regulatory compliance allows
for a cost effective and efficient solution to the issues
at hand. Please feel free to visit our web site at: www.
coralcapital.com or call our offices via. telephone #
(404)-816-9220 to see how we may be of assistance. n
Baltimore
401 east Pratt Street
7th Floor
Baltimore, mD 21202
410-767-0505
roCKVille
9700 Great Seneca Highway
rockville, mD 20850
301-762-9214
www.biomaryland.org
MICRO-CAP
CrispTek, LLC
Columbia, MD
Developer of patented blend of rice
fours and gluten free, allergen free,
low-oil absorption products received
$99,300 to develop three new certifed
gluten free/allergen free/kosher baking
mixes including testing, packaging and
initial store placement.
www.crisptek.com
Adlyfe, Inc.
Rockville, MD
Developer of unique technology that
allows the mapping of protein
surfaces received $200,000 to advance
the development of a proprietary
minimally invasive ocular imaging test for
the early detection of Alzheimers.
www.adlyfe.com
Bamvet Laboratories, Inc.
Baltimore, MD
Developer of the frst FDA authorized
pain medication for laboratory rats and
mice received $200,000 to build out
marketing infrastructure, and
manufacture frst commercial
batch of product.

Cardiosolv, LLC
Baltimore, MD
Developer of system providing
patient-specifc cardiac modeling to the
bedside received $200,000 to undertake
prospective human validation study
predicting non-invasively the optimal
ablation targets for ventricular
tachycardia patients.
http://cardiosolv.com
Remedium Technologies
College Park, MD
Developer of proprietary
lifesaving technology to stop traumatic
bleeding rapidly received
$199,100 to validate a novel sprayable
foam hemostat, Hemogrip
TM
, in a
study of on non-compressible bleeds
in large animals.
www.remediumtechnologies.com
salutes the award recipients
The Year (2013) of Social
Media Integration &
Empowering of the Users
ogy, mathematics and computer science.
Additionally, 2013 will create a great number
of advanced jobs in this rapidly developing
sector which will drive the economies of the
United States and other developed coun-
tries embracing this social media integration
space.
Here are four examples of existing and
future products/properties to pay attention
to when it comes to combining inspiration
with food in the world of social media.
Foodgawker Feed Your Eyes This is an
active product. It is where users submit their
most awe inspiring perfect plate setting, per-
fect moment, perfect lighting photos of their
collections of foods.
Pinterest This is an active product. Users
are able to pin appetizing-looking meals
such as breakfasts, lunches, desserts during
your daily browsing experience. Then, when
you are hungry or looking for an idea, you
can inspire your mind on what to have on
that next meal which could be hours away or
plan for a night out the following week with
your family, date, friends. Some users even
use it to inspire the creation of meals and
what to make tomorrow night.
Zuse This is a future product that
empowers the user to be able to browse, see,
Many analysts thought that the top was
already reached. As 2012 progressed, the
situation stabilized and if you look at thing
with a deeper note, you will find that much
has been happening on the integration side
in a very bullish way.
Stock valuations aside, publicly traded
companies such as Facebook (Nasdaq GS)
and LinkedIn (NYSE: LNKD) have just
begun to touch the surface of social media.
In 2013, this is the year that integration and
inspiration take lead roles by allowing users
to do more with their existing social media
accounts. 2013 is the year of social media
integration and empowerment. Companies
that create applications that drive integra-
tion from desktop to mobile computing to
social media will do well. Consumers will
love these application that empower them
n BY DR. GORDON ChIU
M
any look back on 2012 as the year of social media companies becom-
ing main stream. It was greeted with euphoria that turned negative
once they were measured according to Wall Street earning standards.
by inspiring, simplifying and make their
lives easier.
One area that is being eaten up by users
is the topics around food. Food sharing
isnt just over the physical food but instead
over the virtual experience and the nostal-
gic effects that this brings. It is the art and
science of eating virtual displays of food
coupled with your real time experience after
the viewing. This is a very big area of devel-
opment.
Recently, within many universities, this
has become a subject of great interest
between student, faculty and companies in
the departments of mathematics, computer
science and psychology. The interest goes
beyond the application but to look into
what makes that application enjoyable and
even details such as whether the photos or
descriptions (long or short) play a bigger
role in causing unknown users to add or
friend you.
The food example is one of many that
spawned multiple replicas in travel, shop-
ping, restaurants, news and information.
The contents around each of these topics
and how they are shared is a notewor-
thy study. 2013 will create new disciplines
which hybridize disciplines within psychol-
view and interact with more than one web-
site in real time. This product will be released
on the Apple iPad while allowing the user
to functionalize and create their personal
real time multi-dimensional browser. It will
be interesting to see how users will use this
new empowerment to look at information,
news, food, restaurants, shopping to achieve
greater inspiration and idea generation. This
multi-browser has many unique features
allow seamless integration with social media
populars like Facebook, Twitter, etc.
Foodily This is an active product. It can
be linked with your Facebook application
that allows you to search, discover and
become inspired by sharing, recommending
and saving recipes that are created so that
you can further recommend these to your
friends. Foodily has over 500,000 recipes by
whats on user refrigerators, diet types or
ingredients from top websites, popular blogs,
cookbooks and famous culinary artist.
about the author
Dr. Gordon Chiu is an execution-driven business-
man with more than 15 years of combined domestic
and international experience in biomedical, chemi-
cal, cosmetic, medical, and technology industries.
He has been invited to serve on the board of public
and private companies and to provide vital advice to
the board while increasing overall shareholder value.
His solid background and broad experience has
allowed him to accomplish and advise in areas of
Alzheimer research, breast cancer research, derma-
tology, drug addictions research, green technology,
and antimicrobial research. He started his career as a
research scientist at Pfizer Inc. and Merck & Co., Inc.
and has healthcare and marketing experience with
strong links to Wall Street and Asia.
His educational background began with a B.S.
degree in chemistry from Rensselaer Polytechnic
Institute, graduating summa cum laude. He gradu-
ated with an M.S. degree in chemistry from Seton
Hall University with high honors. Additionally, Dr.
Chiu was accepted as an M.D./Ph.D. candidate under
the National Institutes of Healths Medical Scientist
Training Program for four years at the Mount Sinai
School of Medicine where he also researched, devel-
oped, consulted, and advised Dr. Huachen Wei in the
department of dermatology in skin cancer research.
Seeing the opportunity to impact foreign policies
in healthcare, he transferred his credentials to the
fully accredited University of Bridgeport School of
Naturopathic Medicine to receive his doctorate in
naturopathic medicine.
With this unique background, he has investigated
the validity of foreign treatments and their success
level for public health. He has also been chosen to
serve as an advisory role in the identification of low
cost solutions (i.e. non-invasive diagnostic equip-
ment) for emerging countries that cannot afford to
maintain armies of physicians across numerous sub-
specialties. His years of experience and continuous
involvement have created deep relationships within
the scientific, business, and medical communities.
Dr. Chiu has developed and owns methodologies
called directed combinatorial algorithmic librar-
ies (D.C.A.L.) that are used in various commercial
applications, composition development and research.
Disclosure: Dr. Chiu is a co-founder of Zuse
since 2011 and is an independent adviser to SNN. n
GET
YOUR NOSE
BLACK NOSE gives people with a
Orphan & Rare Disease a Voice.
Your donation supports liIe.
www.black-nose.org
International Swiss based charitable & tax-exempt Ioundation (like 501 C3).
Attention Wall Street
Shoppers
choose their investment banking partners is
often very different than how they SHOULD
make a selection. Companies may gravitate
toward a brand name or bulge bracket
firm (what board would criticize manage-
ment wanting to partner with an 800-lb
gorilla on Wall Street?). The firms size may
be beneficial if they use their large balance
sheet to invest directly in your company
or lend to you. However, size can instead
mean slow committees with the chance to be
turned down or put at the back of the offer-
n BY FRED jOhNSON
Bankers seeking to differentiate themselves
ironically fall prey to convention; dark suits,
bright ties, over-starched shirts and pitch
books filled with deals, league tables, and
analyst rankings, etc. A lot about them, little
about you, and less still as to the fit. So how
can a management team see through this
veneer and discern who will do the best job
for the Company?
Typical criteria used by management
include the banks experience (tombstones
in banker parlance), sector knowledge, the
E
xecutives and Boards often consider a number of investment banks in making
their selection of the ideal advisor or underwriter. These Bake-offs, Dog and
Pony Shows, Beauty pageants in the Street Vernacular are the arenas of competi-
tion for the swashbuckling gladiators of Wall Street to impress the CEO, CFO and
Directors and win the lucrative banking assignment.
banks market segment (bulge bracket, mid-
market, boutique orientation). If the assign-
ment involves a public company raising
equity, an important metric is research cov-
erage. Management teams are keen to prove
to their boards and their shareholders that
their strategy is worthy of interest and sup-
port from the sell-side. Woe is the CEO or
CFO who routinely admits to their board
that they are not followed by the analyst
community.
How public companies ACTUALLY
ing queue. Bigger firms also carry conflicts
of interest, distractions and have greater
concerns as to their own liability. Those
factors may impede their ability to take on
transactions and may limit what process or
audience they can bring to bear.
Are you Important? Instead, ask yourself
if your deal is important to the investment
banks platform. Will the senior bankers
give your transaction ample attention, care,
time and thought? Ways to get a feel for
this might be whether the firms CEO makes
himself available to management to empha-
size the importance of the client to the firm.
Experience. What about the all impor-
tant experience factor? Experience is great,
unless it isnt. What if deal experience means
the bank feels compelled to reward its repeat
investors with deal terms that benefit them
instead of you, the issuing client? Experience
can also lead to a thoughtless auto pilot
process that is mechanized and not tailored.
Are you a notch in the league table or a val-
ued long-term client? Keep in mind, the firm
may have a deep reservoir of relevant deal
experience, but your banker may have had
a limited role, if any in many of the deals.
Ask the banker pitching you the deal what
role he or she might have in marketing and
structuring the deal. If the process is turned
over to anonymous Equity Capital Markets
personnel, you might be getting an overly
rosy or optimistic view of the firms com-
mitment or ability to deliver. Many bankers
are great at selling what someone else in their
firm actually has to deliver which leads to
overpromising and poor results.
Support Beyond the Deal. Firms that offer
support in ways that dont pay corporate
finance fees (non-deal investor introduc-
tions and road shows, conference sponsor-
ship) show genuine interest and demon-
strate longer-term perspective, support and
conviction in the business strategy. These
banks are seeking affiliation rather than an
immediate pay day (ok, fees at some point
are still the end goal). Non-deal investor
introductions and conference sponsorship
are excellent previews of the banks distribu-
tion network and work ethic and banker
personalities (for those possessing such).
Regional vs. National firms. While bulge
bracket or nationally-known investment
banks may be better known with more
resources and heft, a regional bank may
be uniquely able to offer different investor
exposure. Most banks know plenty of pock-
ets of capital in New York and California
for reasons similar to those offered by infa-
mous bank robber Willie Sutton when asked
why he robbed banks (thats where the
money is). As such companies tend to get
plenty of exposure there sooner or later. An
investment bank located in the Midwest or
Southeast may offer better and incremental
exposure to fund managers located in their
region. Portfolio managers in cities like
St. Louis, Milwaukee and Minneapolis and
Atlanta are too often overlooked or skipped
for New York and San Francisco.
Diligence. Another proxy for a banks
quality is diligence. Banks that perform little
or no due diligence should serve as a major
warning. Risks here include a) the deal is
going to hedge funds/flippers, b) the banker
is essentially a sub-contractor unlikely to
remain at the bank too long and therefore
indifferent to his employers underwriting
liability and c) your bankers and sales team
be poorly positioned to handle questions
and objections from the investors.
Commitment. You might also prefer to
know the firms commitment to you and the
sector. Banks that chase fads (Spacs, Reverse
Mergers, Chinese companies listing in the
US with no presence here) may view you and
your sector as such and offer fleeting sup-
port. Your banker and research analyst (per-
haps even the firm) may be here today and
gone tomorrow. Aftermarket support could
suffer and key people such as your research
analyst could leave or drop coverage.
Back to research. How much influence and
integrity does the research department of the
firm have? The fact that a report is written
does not mean it is read, or valued by the
institutional investor universe. If a tree falls
in the forestIs the research department
known to be a shill for banking or could it
stand on its own due to the value of its ana-
lysts and stock picks?
Cult of Personality. As with any service
business, personalities are important. Would
you put these bankers in front of your board
to walk through process, pricing, etc? Would
you be proud to have the particular bankers
represent you in the market? Will the senior
bankers be accessible to you and your board
before, during and after the deal and on
short notice?
The take away here is that size and stature
are not everything. A bigger bank by defini-
tion has more capital and more resources and
more recognition. Is that capital and are those
resources available to your company and
in your deal or are they reserved for bigger
or more important clients? Smaller invest-
ment bank may be more flexible, more agile
and more attentive. There is likely greater
accountability by the bankers pitching you to
select them if they are also the people that will
execute the deal. Remember too that many
assignments have multiple banks involved.
Smaller banks may be better complements to
a team if they are not viewed as competing
in the same segment of the market routinely
with the other bank(s) involved.
Investment bankers, even today, command
big fees from their clients. Make sure you
are getting the best Bang.err um Bank
for your buck.
Fred Johnson joined Barrington Research in 2012
as Managing Director in the Investment Banking
group. Previously, he was with William Blair &
Company from 2009 to 2012 as Managing Director
and Head of Confidential Equity Offerings (includ-
ing PIPEs and Registered Directs). Prior to joining
William Blair, he spent 10 years with A.G. Edwards
in the Investment Banking department (and one year
with its successor, Wachovia) as a Managing Director
in the Equity Private Placement group. Mr. Johnson
has over 15 years of experience structuring private
equity transactions for small-cap public companies
(PIPEs), as well as closely held private companies,
across many industries. Prior to A.G. Edwards, his
experience included merger and acquisition advisory
with Arthur Andersens Corporate Finance group, and
commercial credit analysis with Dun & Bradstreet.
Mr. Johnson holds an MBA in Finance from New York
University, where he was a Stern Scholar, and dual
BA degrees in Economics and Philosophy from the
University of Wisconsin-Madison. n
Why IR?
discover the stock. There is no doubt that
a companys performance is essential to
the IR programs success. However, I can
name many instances in which a company
reported outstanding financial results or
announced a major breakthrough, only to be
largely ignored by the Street.
Ive also seen many companies opt for
a haphazard, IR-lite approach in which
they engage in any number of IR activities
without a fully developed plan, overarching
strategy or consistent approach. As such,
n BY kEITh LIPPERT
The challenge is developing and executing
an IR program that is accountable both for
process and results. This is particularly rel-
evant for a micro-cap company, which most
likely lacks visibility, has a limited operating
history, and competes in a crowded market-
place with nearly 10,000 OTC companies
for the attention of a small universe of risk-
tolerant investors.
In my experience it is not enough for
management to execute on its business plan
and hold out hope that an audience will
T
he answer is simple: An effective investor relations program
can maximize your companys valuation as currency for capi-
tal markets activities and establish an educated base of investors and
analysts for support during difficult times.
PROFIT PLANNERS INCORPORATED (OTCBB:PPMT)
MANAGEMENT AND CORPORATE ADVISORS
CORPORATE ADVISORY SERVICES
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BUSINESS DEVELOPMENT
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IT
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Development
PROFITPLANNERSMGT.COM
350 Madison Avenue, 8th Floor. New York, NY 10017
Tel: 212.402.5200 Email: info@ProfitPlannersMgt.com
they miss opportunities to build long-term
relationships with investors and maximize
the impact of positive developments.
One of the best ways to think about IR is
to liken a stock to a product that represents
the investment opportunity in a company.
Like any product, the stock needs to be mar-
keted, and marketing in a complex, regulated
environment such as Wall Street benefits
from a plan developed and led by an expe-
rienced team.
A well-conceived IR program is tailored
to support each companys specific busi-
ness needs and objectives, and is focused
on results-oriented actions to accomplish
those objectives. Every interaction with the
Street is an opportunity to present the firms
investment thesis, which encompasses the
key reasons investors should buy and hold a
stock. Developing this investment rationale
requires in-depth knowledge about the com-
panys strategy, competitive advantages and
the market environment, as well as a keen
understanding of how the Street processes
information and makes decisions.
Management also needs to provide an
ongoing narrative that enables investors to
gauge its progress. By presenting meaning-
ful metrics and milestones both financial
and operational the IR program establishes
the framework by which to evaluate the
companys performance. Importantly, when
milestones are reached, credibility is created.
The highlights of the investment thesis
should be intertwined through all investor
communications. Thus, consistent messag-
es, milestones and reasons to invest can be
reinforced each time the company speaks to
the Street, whether in an investor call, press
release, company presentation, conference
call, corporate fact sheet, stockholder letter
or IR website.
To have a significant impact, these mes-
sages need to be marketed to a targeted audi-
ence, including high-net-worth individu-
als, retail investors, micro-cap institutional
investors, sell-side analysts and investment
bankers. Knowing who these audiences are
and how to reach them is critical to the pro-
grams success.
Management and its IR representa-
tives should develop a reputation as being
investor-friendly by being accessible and
forthcoming within the confines of securi-
ties laws and in light of business competi-
tion. However, accessibility is not enough.
Many IR programs miss the opportunity for
ongoing dialog with investors, which can
provide feedback into market sentiment.
Management can leverage these valuable
insights to uncover and correct mispercep-
tions about the company, or affirm strategy
and positioning.
How does management implement a
timely, well-conceived program and keep
focused on its long-term IR goals? One
way is to develop a formal quarterly recap
of activities, and develop the IR strategy
and plan for the coming period. Even if the
timing of some activities shifts and the strat-
egy remains unchanged, a planned program
enables you to leverage what you know now
and to capitalize on additional opportunities
as they present themselves.
How do you choose IR representation?
Experience is important, including work
in your sector with companies at a similar
point of development and with comparable
market capitalizations. Look for a prov-
en track record in establishing messaging
that resonates with micro-cap investors and
strong ties with the micro-cap investment
community. Ask about results in creating
awareness, gaining sell-side analyst coverage,
generating invitations to present at invest-
ment conferences, building or changing a
shareholder base and providing assistance in
raising capital.
Experience also is essential in provid-
ing value-added strategic counsel in any
IR situation that may present itself. This
encompasses a wide-range of topics, such as
exchange up-listing, management changes,
shareholder activism, capital market activi-
ties, M&A transactions and crisis manage-
ment.
So how do you evaluate your IR program?
There are too many variables such as com-
pany performance and macroeconomic con-
ditions for stock price to be an appropriate
measuring stick. The following checklist can
be more useful in assessing the programs
effectiveness:
Was a customized investor relations pro-
gram efficiently implemented?
Was managements time used well?
Did the program successfully expand your
investment audience?
Has your companys perception on Wall
Street improved?
Was the strategic counsel valuable and
actionable?
Were the collateral materials high quality?
Were opportunities created and challenges
managed?
In summary, effective IR works to build
awareness of your company as an investment
opportunity. It enhances and preserves
managements credibility. Importantly, it
supports the achievement and maintenance
of maximum valuation, enhancing share-
holder value and providing greater acces-
sibility to capital markets.
keith l. liPPert
FounDinG Partner, lha
Since founding LHA (formerly Lippert/Heilshorn &
Associates) in 1984, Keith Lippert has built a reputa-
tion as a respected advisor to emerging-growth com-
panies. Along with his partner, John Heilshorn, he
has established LHA as a pioneer and a premier pro-
vider of financial communications services, and has
provided strategic counsel to more than 1,000 public
and private companies. Keith plays a leadership role
in working with account teams to enhance the mar-
kets understanding of LHAs clients by integrating all
of the investor outreach tools available. He is able to
leverage his extensive relationships with institutional
investors, securities analysts, retail stockbrokers and
investment bankers as well as his capital markets
knowledge on behalf of LHAs clients. n
Silver Past and
Silver Future
Silver posted an annual average price near
$30.00 in 2012, down from the average price
of $35.12 in 2011. However, it is important
to remember that the average price in 2009
was $14.67, so we are up more than double
what the price was three years earlier. If this
n BY DAVID MORGAN
foundEr: www.SilvEr-invEStor.com
I am very bullish for both the nearterm outlook for silver as well
as for its prospects over the next few years. The silver price will be
increasingly driven by monetary demand.
James Turk, founder of GoldMoney
The above quote echoes exactly my senti-
ments about silver as this missive is written
in late 2012. First, it is important to review
silvers performance so far in 2012 and what
is expected from the indispensible metal
going into 2013 and beyond.
trend continues then one might project sil-
ver to be above $60 three years hence.
Silver investing is truly worldwide at this
point and the trend continues to grow.
Coin sales by government-produced coins
continue to be in high demand, with some
hitting record sales. In fact in a few instances,
coin demand has outpaced the ability of
the mints to produce! Again, this is a trend
that will continue, in my strong opinion, as
people globally increase their purchases of
precious metals due to certainty of govern-
ments inability to address the debt problems
facing us all.
The amount of silver in the exchange-
traded funds is near record off takes, which
means more commercial bars are now held
for investment purposes than as inventory
for industrial consumption. This offers fur-
ther testament to investors enthusiasm for
silver as an investment rather than a base
metal or consumption metal only. Physical
silver bar investment grew by a massive 67
percent in 2011 to 95.7 million troy ounces.
The growth in 2012 cannot be determined
yet, as we still have one month to go as this
is being written.
While global coins and medals fabrica-
tion rose by almost 19 percent to an all-time
high of 118.2 Moz., Western Europe and the
United States, which bested 2010s record
performance in terms of American Silver
Eagle Bullion Coin sales, led this category to
its record high. Elsewhere, strong demand in
China accounted for a near 60 percent rise in
its bullion coin output last year.
Quoting the Silver Institute from
September 2012, Investors are continuing to
be bullish on silver in 2012, increasing their
holdings of the precious metal that are at
near record levels. Investors have so far pur-
chased more than 32 million ounces of the
white metal through silver-backed exchange-
traded products this year. Exchange-traded
fund holdings now total more than 608
million ounces with a value of $20.5 billion
through mid September.
The silver price has risen more than 20
percent since the beginning of this year.
Significantly, from January 2009 through
September 15, 2012, the silver price has
increased an astounding 211 percent. It
seems important to take a longer-term look
at the price movement as new investors
usually are focused on too narrow a time
span. From this point on, investors would be
best served to focus on a three- to five-year
timeframe.
Silver also enjoys a wide range of impor-
tant uses in industry. Industrial applications
accounted for over half of world fabrication
demand in 2011 and 2012. Unlike gold fab-
rication, which is heavily reliant on jewelry,
silver can call on a more diverse range of
applications. Furthermore, in the short term,
many of these uses are relatively price inelas-
tic, helping to create strong price support.
Morgan Stanley has a 2013 average price
of $2175 per ounce for gold. This is very
close to my estimate, and knowing silver has
outperformed gold during this bull market,
expects the ratio to drop from the current
53 to 1 (gold to silver) ratio to something
around 40 to 1. This implies a price for silver
of about $55 per ounce!
However, knowing how markets move and
especially markets that are as highly geared
and emotional as silver once the nominal
high of $50 is taken out to the upside, expect
silver to establish a new high, ranging $60
to $75 in 2013. Why?
In commodities especially, there is noth-
ing more bullish than a new all-time high.
Once silver overcomes decades-long resis-
tance at the $50 level, many momentum
players will jump on the silver bandwagon
for a short and profitable run.
It is important to recall that when silver
approached this level in April of 2011 the
Commodity Mercantile Exchange (CME)
increased margin requirements for silver
four times before the market quieted down
and sold off sharply. In fairness, my view
was that the silver market had become over-
heated on a temporary basis and if anyone
was buying silver at or above the $35 level
they should be very cautious.
2013 will be the year that the next leg up
in this once-in-a-lifetime bull market will
establish itself. As difficult as it may be for
investors/speculators to believe, the best is
yet to come. Markets move in erratic ways
every time they approach their final tops.
The precious metals are no exception and in
fact have a propensity to have huge moves
during the manic/panic buying that lies
ahead.
It has been stated that 90 percent of the
move comes in the last 10 percent of the
time. Looking back to the final year of the
previous silver bull market, silver started
January 1979 in the $6.00 range and a year
later topped out at $50. Will history repeat?
No one can say, which means we need to be
open to all possibilities. We may see a run in
silver that makes the 1979 move look tame
because there is less silver now than then, it
is a global market now, the Internet encour-
ages easy information and purchases, plus
the three bullish factors below will continue
to bolster precious metals investing.
bulliSh FactorS
Increased Uncertainty
Volatility is a function of uncertainty.
Because the world is becoming unstable as
a result of inability of sovereign nations to
keep their promises to the people, we are
witnessing demonstrations in the Middle
East, Europe, and elsewhere. This is a major
Silver also enjoys a wide range of important uses in indus-
try. Industrial applications accounted for over half of world
fabrication demand in 2011 and 2012.
trend that will continue and many investors
and even average people will seek protec-
tion. Gold is considered a safe haven and
certainly we agree to some extent, yet going
back well over a decade when asked to write
the Ten Rules of Silver Investing, this was
Rule #1!
Rule #1 When all else fails, there is silver.
No one likes to be a prophet of doom, but
the simple truth is that silver is the worlds
money of last resort. Should a severe eco-
nomic collapse occur, leaving paper assets
worthless, silver will be primary currency for
purchase of goods and services. (Gold will
be a store of major wealth, but will be priced
too high for day-to-day use.) Thus, every
investor should own some physical silver and
store a portion of it where its accessible in an
emergency.
After submitting this to the publisher, he
called me to express the fact that he had
been thinking gold, but in a true crisis, silver
would be the metal in use.
Money Debasement
We need look no further than a recent press
release from Thomson Reuters:
A Rebound In Investment Demand
Stemming From Continuing Loose Monetary
Policies Expected To Drive Silver Prices
Towards And Possibly Over $50 during 2013.
We are in agreement with the GFMS
report and yet think silver could do even
better depending upon how policy decisions
unfold in 2013.
It is no secret to thinking people every-
where that the total destruction of a financial
system that can be trusted is taking place.
Although many want to delude themselves
into pretending the obvious cannot really
be taking place, those with power and con-
viction are moving to safe alternatives with
zero counterparty risk. This means physical
gold and silver, the top of all commodities,
because they are MONEY!
Silver Trading Platform in Asia
The Chinese Gold & Silver Exchange Society,
or CGSE, a leading physical gold market-
place in Asia, plans to launch a silver trading
platform in Hong Kong in the first quarter
of 2013.
The new Silver Contract will be denomi-
nated in Hong Kong dollars, and the con-
tract size will be at least 10 kilograms. The
minimum delivery unit will be 30 kilograms.
An airport-based precious metals vault at
the Hong Kong International Airport will be
the accredited depository that would facili-
tate the physical delivery of silver.
The CGSE said that it would consider
launching yuan-denominated silver trading
later under this new platform. This of course
would open up the China market even fur-
ther and puts even more pressure on the
silver market.
Initially this new exchange expects around
2 million to 3 million ounces per day in the
first six months. It is our thinking that this
is only the beginning and increased silver
awareness in Asia will bolster demand in a
significant way.
David Morgan is a widely recognized analyst in the
precious metals industry and consults for hedge
funds, high net worth investors, mining companies,
depositories, and bullion dealers. He is the publisher
of The Morgan Report (www.TheMorganReport.
com) on money, metals, and mining. Additionally he
provides a precious metals savings program through
www.Silver123.net. Mr. Morgan is also the author
of Get the Skinny on Silver Investing and a featured
speaker at investment conferences in North America,
Europe, and Asia. n

No one likes to be a prophet of doom, but the simple truth
is that silver is the worlds money of last resort. Should a
severe economic collapse occur, leaving paper assets worth-
less, silver will be primary currency for purchase of goods
and services
A SNN INcorporAted ANd MIcro-cAp revIew MAgAzINe Survey
on behalf of you, our subscribers and readers, additional information about companies in this issue
will be forwarded to you by checking the box and submitting your request. Information will be forwarded
to you by mail or email.
q 144 Opinions
qAbout Graphite, Greg Bowes - NGC.V
q AL International - JCOF
qA Rational, Practical and Logical Approach to
General Solicitation
q Ask Mr. Wallstreet Newsletter
q Attention Wall St. Shoppers, Fred Johnson
qBank of Internet - BOFI
qBio Maryland
q Bright Outlook for Asia, Leslie Richardson
q Cambridge House International Conferences
q Caveat Emptor or Buyer Beware Book
qClosure, Rabbi Stephen Robbins
qCompliance Corner, Russell C. Weigel lll Esq.
qConmodities Corner, Mark Shore
qDirect Public Offerings, Thomas Carter
q Editorial
q Eservco - ENSV
q Graphite One Resources - GPH.V, GPHOF
q Growth Equity, Brett Goetobius
qInsurance Corner, Eugene B. Podokshik
q Investing in Micro-Caps, Chris Lahiji
q Investor Consultants
qISEEE, Don Calvin
qKatan Associates, Seth & Stan Yakatan
qKesselrun Resources - KES.V
qMaloneBailey LLP
q Marksman Energy - MAH.V
q Matmown, Inc. - MTMW
qMetals & Minerals Investment Conferences
qMicro-Cap Restructuring, Erik Nelson
qMicro-Cap Review Magazine
q Miller Energy Resources - MILL
qMZ Group
q New BD Formations & BD Withdrawl Summary, David Alsup
q New Engine Media
q No Boring Lawyers - Oswald & Yap, Oswald-Yap.com
q Ombudsman, Jack Leslie
qOne on One, with David Drake
qOrganic Alliance - ORGC
qOrphanbiotec, Dr. Frank Grossman
qPitbull Conference, Leonard Rosen
qPlatinum & Paladium, Mickey Fulp
qPrimabiomed - PBMD
q Proft Planners Management, Inc. - PPMT
qRaptor Ranch
q Russell C. Weigel, III, Lawyer
qSEMDAConference
q Shoreline Energy Corp. - SEQ.TO
qSilver Past and Silver Future, David Morgan
q SNN Distribution
q Social Media Migration, Dr. Gordon Chiu
q Soltoro Ltd. - SOL.V
qStellar Pharmaceuticals - KLH.V, SLXCF
qStockNewsNow Radio, Gary McKenzie
qTargeted Market Awareness, Robert Bobby Kraft
q Therakine Tunable Toolbox
qTrouble is Opportunity, Jonathan Hornik, Esq.
qWallStreet Chicken Cartoon
qWhy IR?, Keith Lippert
q World Wide Stock Transfer
qwww.black-nose.org
1. would you invest in a private company?
q Only knowing it was going public
q Yes, under new Jump Start for Jobs Act
q No, I only invest in public companies
q Yes, I am an accredited investor
3. do you understand the Jump Start for Jobs Act?
q Yes
q Never heard of it
q Send me information
q I am skeptical
5. what is you biggest worry about the micro-cap
stock market?
qLack of Liquidity to sell shares
qHard to fnd a broker who/buy/sell them for me
qOver-regulation by regulators
qA Reverse stock split of shares
2. would you donate money to a company on a crowd
funding website?
q Yes
q No
q Yes, less than $1,000
q Yes, less than $100
4. will you invest more money in micro-cap companies
in 2013 than you did in 2012?
qYes
qNo
qWill just hold what I have now
qLooking for good ideas
please take the time to answer some simple survey questions so that we may provide the most
comprehensive information, stories of interest, investment ideas, and industry analysis in future issues of
Micro-cap review. we thank you in advance for your participation.

Send completed surveys to: SNN Incorporated or respond to survey online at: StockNewsNow.com
4766 Admiralty Way #13004 Marina del Rey, Ca. 90295
6. what sector of the market seems most attractive to
you for investment in the coming year?
qTechnology
qBiotech & Life Sciences
qManufacturing
qMedia
qMining & Exploration
qSoftware

q Other_______________________________

8. which stock market(s) do you buy stocks?
q United States
q Canada
q Australia
q India

12. I would like to read more information about?
q Micro-Cap companies
q Real Estate
q Market commentary
q Hard money lending
q Private placement investing
q Commodities
13. when you read Micro-cap review, do you read the
print or web version?
qPrint q Web

7. How did your portfolio do in 2012?
q Winner
q Loser
q Broke even
q No comment
9. How many fnancial conferences will you attend in 2013?
q 1-10
q Under 3
q None
q More than 10
11. what was your favorite article(s) in this issue?
please list.
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
13. which company in this issue would you invest in?
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
All participants in surveys receive a Free lifetime subscription to Micro-cap review Magazine.
Name: ____________________________________________________________________
Address: __________________________________________________________________
email: _______________________________ phone: ______________________________
qAdd me to Ask Mr. wallStreet Free Newsletter
q Aerospace
q Accounting
q Alternative Energy
q Ask Mr. WallStreet
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q Auto
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q China
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q Consumer Services
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q Digital News
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q Junior Gold Developer
q Junior Gold Producer
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and Services

q Web Software
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check off areas of interest:
q Brazil
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n BY DON CALVIN
market experts. ISEEE lists as members
former global stock exchange Chairpersons,
CEOs and other experts from Austria,
Australia, Brazil, Canada, Egypt, France,
Germany, Hong Kong, Hungary, Italy, Israel,
Kazakhstan, Luxembourg, Malaysia, Netherl
ands, New Zealand, Peru, Russia, Slovenia, S
weden, Switzerland, Turkey, United Kingdom
and the United States.
Since the first ISEEE Meeting in Orlando,
What is the International
Stock Exchange Executives
Emeriti?
T
he International Stock Exchange Executives Emeriti, Inc. (ISEEE) is a col-
legial not-for-profit educational corporation of former and current securi-
ties exchange officials and other global market experts and professionals.
The ISEEE meets to discuss and ana-
lyze issues affecting the global community
of securities exchanges, the state of SMEs
(Small and Medium Sized Enterprises), make
recommendations and address the issues and
provide proposed actions to be taken.
The ISEEE currently has more than forty
Members and Special Guests participating in
the Discussion Sessions which include for-
mer and current exchange officials and
Florida in March 2008 , the ISEEE has
issued an Orlando Declaration follow-
ing the meeting which has been distributed
to the press, regulatory authorities, legisla-
tors and other interested groups.
The Orlando Declaration 2012 includes
a Summary of Eleven Actions for Balanced
Global Reform and is available on the
ISEEE website: www.capitalmarketexperts.
com.
At the ISEEE meeting in Orlando in 2010,
a Small Business Financing Crisis Task
Force was created to formulate and recom-
mend practical and positive steps to
improve access of small and medium
sized enterprises (SMEs) to equity financ-
ing. The Task Force has made recom-
mendations and a draft report to the ISEEE
Members which was presented at their meet-
ing in Madeira, in September 2012, and a
final report is soon to be issued. The Report
titled:
Opening the Worlds Equity Markets to
Small and Medium Sized Companies will point
out changes needed as SMEs produce a
greater portion of gross domestic prod-
uct and more jobs than the large-cap Blue
Chip companies.
The Report proposes a recommended
general carve out of a regulatory frame-
work tailored more for SMEs than is cur-
rently available. The purpose of which is to
allow them to raise needed equity capital in
a more practical and cost effective way while
maintaining the basic needs of investor pro-
tection and regulatory oversight.
At the ISEEE meeting held in Madeira
two other Discussion Sessions were held
in addition to the Discussion of the pro-
posed Report.
Discussion Sessions focused on relat-
ed topics; Regulatory and Related
Market Developments and a Capital
Formation Roundtable, Luncheon
and Dinner Session included presenta-
tions on: Competitive Developments at
European Exchanges; Outlook
and Opportunities -The Case for Asia-Pacific
; Investment Opportunities in Madeira;
Developments in the Exchange Traded
Funds(ETFs) Market Worldwide and
The Global Economies and Markets-
Finding Order in Chaos The text of
all these presentations are available on the
ISEEE web site. www.capitalmarketexperts.
com.
At the upcoming ISEEE Meeting to be
held in Orlando, Florida in April, 2013,
among the topics to be discussed are the
Changes and Challenges to the Trad
itional Exchanges Worldwide - and new
Opportunities including such issues as
Crowdfunding, as an example for small
and medium alternative issuer financ-
ing and how it can be utilized by exchang-
es to build up the small cap issuer markets.
Other topics for the panel are projected to
be: 1. regional exchange market linkups 2.
Benefits and problems and 3. Benefits and
problems of public ownership of exchanges.
An additional panel will discuss:
The Regulatory Landscape- Recent
Regulatory Actions and Proposals Affecting
the Exchanges and the Capital Markets,
and the new Issues Raised. This includes
such issues as the regulation of hedge
funds, dark pools and high frequency trad-
ing and possible regulatory proposals.
Other panels are expected to review
Issues Facing EuropeanExchanges su
ch as: the Legal Entity Identifier issue
and a concluding session will be a
Capital Formation Roundtable Factors
Influencing Capital Formation around
the Global Markets.
Each panel will consist of former
exchange officials and other public and pri-
vate markets seasoned experts
Presentations of the ISEEE Meetings will
be made available at the full discretion of
the ISEEE and found on the ISEEE website
www.capitalmarketexperts.com.
The next meeting, after Orlando in
April, is planned to be held in Monaco
in September and possibly in Istanbul in
2014.Participation is by invitation only,
and discussion sessions are open only to
ISEEE Members and Special Guests, all of
whom are expected to participate and make
a presentation or presentations at the vari-
ous sessions.
about Don calVin:
Donald Calvin is the Chairman and Founder of the
International Stock Exchange Executives Emeriti, Inc
(ISEEE) and the Chairman of International Business
Enterprises, Inc and as such has been the Adviser
to more than twenty securities exchange Chairmen
worldwide. He also was the Chairman of the National
Stock Exchange for six years during which time it
was the second largest US exchange. Previously was
the Executive Vice President of the New York Stock
Exchange and served with eight NYSE Chairmen,
prior to which he was the Syndicate Manager
for a Chicago based investment firm. Previously
he was the Illinois Securities Commissioner and is
a graduate of the University of Illinois Law School. n
The Orlando Declaration 2012 includes a Summary
of Eleven Actions for Balanced Global Reform and is
available on the ISEEE website: www.capitalmarketex-
perts.com.
n BY LESLIE RIChARDSON
by infrastructure spending and private invest-
ment. Siam Makro (MAKRO:TB) a discount
food and consumer products store chain )
is up 109.1% YTD as the company plans to
expand throughout the Indochinese market,
starting with Vietnam in 2013.
While the Jakarta Stock Exchange
Composite Index is up only 13.0% YTD, there
are some excellent opportunities for growth
to be found. PT Ace Hardware Indonesia
(ACES:IJ) is up 91.8% YTD as the company
has been rapidly expanding adding 18 stores
in 7 cities for a total of 71 outlets in 23 cities
and also has 14 toy stores under the name
Toy Kingdom. Additional, two pharmaceu-
tical companies that are expanding access
to healthcare in Indonesia are Kimia Farma
Persero Tbk PT (KAEF:IJ) a pharmaceutical
producer and distributor is up 153.3% YTD
and Kalbe Farma Tbk PT (KLBF:IJ) which is
up 49.3% YTD.
If investing in individual stocks is not
appealing, investors can add some exposure
to their portfolios by investing in Southeast
Asian funds. A few funds that have per-
formed well this year include W&W Global
Strategies Fund - South East Asian Equity
Fund and PineBridge Southeast Asia Small
Cap Equity Fund which have one year perfor-
mance of 14.53% and 20.78%, respectively.
Two Asian small cap funds that have also
performed well this year are Aberdeen Asia-
Pacific Smaller Coms InSvc and Fullerton Lux
Funds Asian Small Cap Equities which have
one year performance of 23.12% and 34.27%,
respectively. Small caps are doing particu-
larly well as they tend to be more exposed to
domestic consumption with less exposure to
changing global demand. However, smaller
cap Asian funds also tend to be less researched
and exhibit a greater likelihood of price inef-
ficiencies.
*YTD=November 21, 2012 n
Bright Outlook for Southeast Asian Countries in 2013
D
espite continued uncertainties
and anemic growth facing many
global economies, Southeast Asian
economies are poised to experience strong
growth in 2013. An increase in invest-
ment and domestic consumption is projected
to fuel the regions growth for the coming
years as the region is showing resiliency from
the global turmoil. The Organization for
Economic Cooperation and Development
projects Indonesias growth will average 6.4
percent, the Philippines will expand about
5.5 percent a year and Malaysia and Thailand
will see gains of around 5.1 percent from 2013
to 2017.
Companies in Southeast Asia are benefit-
ing from strong domestic demand as the
regions middle class continues to expand,
as well as an increase in foreign investment
and public spending by governments offset-
ting weakness from the export markets. As
economic growth remains robust for the
region, two countries in particular have stock
exchanges are performing exceptionally well
this year. The Philippines (PSE Index) and
Thailand Exchanges (SET), are up 26.6%
and 24.5% from the beginning of the year
through November 21, 2012, respectively, are
the best performing equities markets in the
region. In the Philippines, the acceleration of
government infrastructure spending has con-
tributed to the strong growth performance
while Thailands financials and consumer
related stocks are performing extremely well
driven by domestic growth from urbanization
and increased domestic consumption.
Even after a strong performance this year,
there are many good companies that are
still considered an excellent value. First
Philippines Holding Corp (FPH:PH), an
energy play which is up 70.8% year-to-
date and offers a dividend yield of 2.2%.
The company is committed to maintain its
growth momentum as it enhances its power
assets over the next three year. LT Group Inc.
(LTG:PH) is up 191.3% YTD. LT Group was
previously named Tanduay Holdings Inc, and
focused on the beverage industry; however
the companys CEO, Lucio Tan, Philippines
second riches man, is in the process of con-
solidating all his business in one listing. The
companies to be consolidated are LT Group
Asia Brewery Inc., Fortune Tobacco Corp.,
Eton Properties Philippines, Philippine
Airlines Inc., Air Philippines Corp. (PAL),
Philippine National Bank (PNB), and Allied
Banking Corp. Ayala Corp (AC:PM) which
is up 66.3% YTD is one of the largest and
oldest conglomerates in the country with
operations in banking, telecoms, property
development, utilities, electronics and auto-
mobile sales. Recently, the Ayala-controlled
Bank of the Philippine Islands (BPI) and
Lucio Tans Philippine National Bank (PNB)
entered negotiations for a possible merger
that would create the countrys biggest lender.
In Thailand, beverage firm Oishi Group
Pcl (OISHI:TB) is up 130.0% YTD. Oishi
sells Japanese-style food at several restaurants
and bakeries including Osihi Grand, Osihi
Japanese Buffet, Shabushi, Oishi Ramen and
Nikuya as well as manufacturers and distrib-
utes green tea. Siam City Cement (SCCC:TB)
is up 81.47% YTD, the company is projected
to benefit from the forecasted double digit
growth in Thailands cement industry driven
new name. same great conference.
INVESTMENT CONFERENCES
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Proud Supporter:
PROFILED COMPANIES
orphanbiotec-a talented
bridgebuilder for rare Diseases
D
espite modern medicine, Rare
Diseases have been forgotten dis-
eases for decades. Over 250 mil-
lion people worldwide and more than 15
million children and their families in the
US are affected. Their suffering makes joint
action a requirement. How can society help
and modern companies position themselves
by being committed to those affected? A
review of the last year activities of the Swiss
Foundation Orphanbiotec provides some
answers.
The Zurich based international focused,
Foundation Orphanbiotec, has devel-
oped innovative solutions and alternatives
for treating Rare Diseases. Specific and
unique to the winner of the Swiss Social
Entrepreneurship Award 2011 is the business
model, targeting the needs of people and
integration into its patient empowerment
program Little Orphan Elfe. This program
started in 2012 under the patronat of the
Ministery of Health and support of the
Childrens Zoo of the Swiss National Circus
KNIE.
This unique program offers therefore a
direct exchange of people affected and will
be integrating its own innovative patient
coaching in the near future. For this pur-
pose it maintains direct contact with those
affected, patient organizations, researchers,
doctors, government agencies and partners.
In addition to the Foundations Online
Forum for the first primary exchange, it
promoted information and motivation to
thousends affected. The complete patient
empowerment program not only benefits
children and their families, and people suf-
fering from rare conditions, but also all CSR-
Supporters of the Foundation. They turn
into much more than just being our spon-
sors, the founder Dr. Frank Grossmann says.
Creating Shared Value is providing all
partners the opportunity to take responsibil-
ity for social priorities, while strengthening
their own performance. Our partners from
various fields are committed through their
social engagement at the forefront.
Short-term market interests are no lon-
ger in the foreground. Affordable and sus-
tainable innovation, knowledge sharing and
long-term partnerships based on trust and
value creation for company and society is
where its at. Therefore, it is important to
find alternative ways to encourage innova-
tion and to keep in mind the socioeconomic
costs for a healthy society and for modern
and healthy enterprises.
During the last years activities it has
become a requirement of our time, that gen-
eral society is committed to the challenges
that the state alone is not able to solve. This
is especially true in the area of health care.
Orphanbiotec is the 2012 charity of choice
for diverse partners, ministries of health,
sports clubs and society working together for
health promotion and for our international
health campaign BLACK NOSE. This glob-
al campaign is supporting those affected,
giving them a face and a voice. Everyone;
whether directly affected or not can make a
mark with a Black Nose in support for Rare
Diseases and prove that those affected are
not alone.
Companies can tailor their success for
social issues at the same time. Foundation
Orphanbiotec provides an excellent rep-
utation and convincing Corporate Social
Responsibility. A future partnership with the
Foundation will give all patrons the ability to
enhance their own economic potential and
strategic corporate communication.
Those affected by a rare disease today will
have a voice and will not forget your support.
More infos:
www.orphanbiotec-foundation.com
www.black-nose.org
Foundation Orphanbiotec
Dr. Frank Grossmann / Founder, CEO
Einsiedlerstrasse 31A
8820 Waedenswil
Switzerland
SNN Inc. is a supporter of Foundation
Orphanbiotec and applauds the work of
its Founder and CEO, Dr. Frank Grossman.
n
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Tri-State Financial Press 69256 World Stock Transfer ad Proof 2
received aggressive lobbyist letters that were
leaked from SEC - these letters and ensuing
emails from last August got the chairwoman
worried about her anti-consumer legacy and
consequently delayed it. By resigning Dec.
14, it comes to SEC Chair Elisse Walters to
bring a proposal by no later than February
for the Commissioners to vote on it. When
this is voted and passed, then the law will
stipulate how advertising can be done.
My prediction is that companies reading
this should be turning to you now to put into
place an advertising strategy with Micro-Cap
and lock into rates now as these rates are
going to rise quickly. Our investment The
Soho Loft as the leading financial innovation
media company focuses on online advertis-
ing and advertising through the 200+ annual
conferences we handle globally. We see this
as a strong media compliment to Micro-Cap
Review especially since we focus on interna-
tional funds, law firms and investors.

4. Can a private or public company place an
ad to raise money legally in SNN products
such as our Ask Mr. WallStreet Newsletter,
SNNLive Videos, or StockNewsNow Radio?
Private companies under the law cannot
advertise offerings while public companies
can advertise no different as in the past. The
law has to pass first which we expect to occur
by end of Q1 2013.
One on One with
David Drake on the
Jump Start for Jobs Act
1. When will the SEC give guidance regard-
ing the Jump Start for Jobs Act? Why the
long delay?
SEC will come up with a proposal by no
later than February 2013 with the new SEC
Chairwoman Walters in place. The initial
delay (deadline just passed Jan .1 2013)
was prompted by former Chairwoman
Mary Schapiro and her consequent res-
ignation Dec. 14, 2012. The new inter-
im Chairwoman Walters will pick up the
process in by February and the article we
wrote Obamas 10 Steps with SEC & FINRA
to Legalize US Equity crowdfunding

2. How did the change from stocks trading
in fractions to decimals affect the SMEs? Is it
probable that a return to fractions will occur
anytime soon?
The 1998 Regulation ATS allowed for deci-
mal trading via computers. At the same time
along with Glass-Steagall Act repeal 1999
we saw a decimation of new IPOs. SEC was
happy to see boiler rooms disappearing. My
friend former Vice Chair of Nasdaq David
Weild is a staunch lobbyist for fractions to
return. I dont see it as a part of upcoming
topics but it is such a simple solution that
make sense. Let the issuers pick the fraction.

3. How can a company use Micro-Cap
Review magazine for market awareness or
general solicitation without recourse?
First of all, Title 2 of the JOBS Act that intro-
duces the removal of the solicitation ban has
yet to pass. It was mandated by Congress
and President Obama to be implemented
as a law by July 4, 2012. Mary Schapiro
5. Explain what an issuer can and cannot
advertise to raise money from investors?
Im not a lawyer so I would refrain from
answering this question. All issuers should
always have legal advise on what they adver-
tise.

6. Is there differing requirements soliciting
to accredited investors or non-accredited
investors?
Certainly, the general solicitation under this
exemption Reg D, 506 c only applies to
accredited investors. Thats for investors
earning $200k per year the last 2 years
($300k for married couples) or have $1 mil-
lion net worth excluding your main home
7. Why would an issuer raise money crowd
funding if they require the same approxi-
mate financial reporting expense as going
public?
They wouldnt most likely. The argument
with crowd funding for equity (delayed even
longer - to Jan. 2014 according to us) is
that is would be inexpensive. However, if
it ends up costing $10,000-$20,000 then
cost is prohibitive. Also, Crowd funding for
stock / equity has a $1 million per 12 month
period limit. It would fit a small business
growing to open up a second store or bakery.
However, to raise capital over $1 million
would require other exemption or to go pub-
lic. Cost is always the concern with going
public. Crowd funding for equity will be a
useless law just like Regulation A+ currently
is. Reg A+ was part of the JOBS Act ad also
acts like a crowd funding raise but you need
merit based state approval and the states are
nuts. They scramble law students to review
reg A applications - it is a joke. They dont
know what they are doing and as such Reg
A is maybe used only 5-7 per year nation-
wide. There must be an expediency and
economics of scale / low cost.
8. If a company funds itself via crowd fund-
ing what are the investors exit strategies?
Investors can go public or sell the firm. We
would advise companies and investors
to make sure there are drag along claus-
es. Thus, when the owner wants to sell, the
potential of 1000s of investors are dragged
along to sell. Investors can also insist on
annual private offerings and access to the
books - maybe even insist on that share
holders annually will partake in a road show
where each owner and employee have the
right to sell 10% of their holdings. :This
creates a liquidity event and expected reset-
ting of the company value every year. This
latter is of course more applicable for larger
firms. For smaller investors, the exit would
be to sell the shares back to the owners of
the company, have an outside investor or
VC fund buy the shares when an investment
large enough comes along or alternatively
investors can have the investment being a
convertible note - debt option that gives an
investor an exit.
9. What is the aftermarket for private crowd
funded companies?
Currently SecondMarket and SharesPost will
be the market place for crowd funded com-
panies as crowd funding for equity becomes
legalized end of 2013.
10. Does crowd funding fit most companies
and what are the deciding factors?
Not at all a fit for all companies. It is
a financial tool among many investment
tools we have available - several from the
JOBS Act. Our media firm is the leader
in information on these SEC exemptions
but also other non-traditional funding. Too
many firms turn to lawyers and accountants
for advise. Their advise will be exclusively
within their knowledge and no law firm
knows it all just like now accountant knows
all of the tax code. We however know all
the experts that have conducted successful
transactions in all the financial innovation
deals available for SMEs. For instance, we
have partners and experts that for the last
30 years write Regulation D for a fixed flat
fee under $10,000 including legal, PPM and
filing. This firm even ghost writes for the
large law firms that usually add a zero to the
final bill.
This information takes years to develop
and we have found some of the leading
minds of the world thanks to the 200 entre-
preneur and financial conferences we handle
globally but also because our media com-
pany have interviewed 100s of speakers and
leading minds in all continents. We find this
information between lobbying Congress on
the JOBS Act, having former SEC Chair Cox
speak at our conference last fall or attending
the Transatlantic Economic Council in Rome
as a US Commerce delegate July 2012. This
media access gives us information globally
and this is the knowledge behind our eco
system. Our new year resolution 2013 is
to inspire entrepreneurs and SMEs globally
via removal of red tape and ease to capital
formation and capital creation.
10A. What will be your focus in 2013?
The Soho Loft as the leading financial inno-
vation media company and fortunately com-
plementing all your existing services. We are
managing 200+ financial conferences glob-
ally and increasing our writing. We recently
started writing for Forbes and Thomson
Reuters as a weekly contributor.
David Drake is the founder and Chairman of
LDJ Capital, a Private Equity firm in New York
City, and of its subsidiary The Soho Loft Capital
Creation Event Series (TSL), a global events and
media company covering education and creation
of financial innovation programs for the Private
Company Marketplace. n
PROFILED COMPANIES
kesselrun resources ltD.
Pursuing ontarios next large tonnage Granite hosted Gold Deposit
K
esselrun Resources Ltd. (KES.V)
is a newly formed, well capital-
ized Thunder Bay, Ontario-based
mineral exploration company focused on
growth through property acquisitions and
discoveries. Kesselruns management team,
led by professional geoscientist CEO Michael
Thompson possesses strong geological
and exploration experience with particu-
lar expertise in Northwestern Ontario.
Kesselrun Resources technical team is
backed by Fladgate Exploration Consulting
Corporation, the largest, full-service mineral
exploration consulting firm in Northwestern
Ontario. Fladgate has unparalleled resources
and extensive geological experience in the
area. Significant gold projects in the region
worked by the Fladgate team in past years
include both the Hammond Reef and Rainy
River deposits.
Kesselrun Resources flagship Bluffpoint
Project consists of 103 mining claims covering
22,512 hectares (55,628 acres) in Northwest
Ontarios Wabigoon Subprovince, host to
several recent large tonnage gold discover-
ies such as Osiskos (TSX: OSK) Hammond
Reef Project and Rainy Rivers (TSX: RR)
Rainy River Project. Accessible year round by
a network of well-maintained logging roads,
Bluffpoint offers low cost exploration in an
emerging prolific gold district.
Kesselrun has recently launched an inau-
magnitude of gold along the propertys main
zone. While the company only debuted
gural drilling program at Bluffpoint with
the aim of further defining the grade and
on the TSX Venture Exchange in late July
of 2012, they have achieved an impressive
number of milestones despite the difficult
market for junior resource companies over
this period.
keSSelrun reSourceS key
FactS anD FiGureS
Kesselrun announced its Qualifying
Transaction and TSX Venture listing on July
24, 2012.
Kesselrun has a clean structure with only
22.8 million shares issued & outstanding.
Kesselrun completing two equity financ-
ings in Nov. 2012 for gross proceeds of
C$3.23 million with KES directors investing
$.26 million.
The Bluffpoint project, staked in late
2010, is located in one of the leading, most
stable mining jurisdictions globally.
Previous work by Homestake Canada
Ltd. (now Barrick Gold Corporation) in the
early 1990s recognized the potential for the
Bluffpoint Project to host a large tonnage
granite hosted gold deposit. Primarily due to
the lack of road access to the project and the
low price of gold at that time, the Bluffpoint
was not drilled.
On Oct. 18, 2012, Kesselrun reported
results from an extensive trenching program
at Bluffpoint which confirms the presence
of broad, disseminated gold mineralization
extending along strike on surface 500-700
meters in length, 100-150 meters in width
and open in all directions.
On Oct. 29, 2012, Kesselrun report-
ed grab sample assay results from an area
approximately 2300 meters north along
strike from the northern extent of the Island
(Homestake) Zone included 101.80 g/t Gold
and 66.82 g/t Gold and extended the known
mineralization on surface to approximately
3000 meters.
On Nov. 22, 2012, Kesselrun commenced
an initial diamond drilling program on
Bluffpoint along the historic Homestake
zone designed to test targets identified dur-
ing the 2012 surface exploration program;
initial results from the first 9 holes were
encouraging and showed widespread altera-
tion and gold mineralization - confirmation
of the big system
Drilling at Bluffpoint is ongoing, based
on a new 3D model with continuous, fresh
rock sampling that KES can correlate to
alteration and gold mineralization.
Kesselrun Resources CEO, Michael
Thompson, is clearly no stranger to gold
exploration and mining in Northwest
Ontario. He worked with Placer Dome at
the Musselwhite mine and then ran their
regional generative office before Placer was
acquired by Barrick and Goldcorp.
The same can be said for the technical
team that is now supporting his endeavours
at Kesselrun. Our team brings a wealth of
experience to the Bluffpoint project, states
Mr. Thompson. One thing we all agree on
is that a big mineralizing event has hap-
pened here. Strong alteration can be found
through the whole property, and we can see
from our trenching work, there was a lot of
gold in that event.
Michael Thompson, P. Geo., President & CEO of
Kesselrun, is the Qualified Person responsible for the
Bluffpoint project as defined by National Instrument
43-101 and has approved the technical information in
this article. n
n BY RUSSELL C. WEIGEL, III
pertaining to liquidity, capital resources, and
results of operations. Disclosure of informa-
tion that can affect revenues can and should
include knowledge of product failures and
limitations, where applicable.
ScheDulinG oF auDit, Form
10-k PreParation, anD
eDGarization
8. Consult your EDGAR filing service as to
its anticipated workload for the 10-K season.
Calendar the date that it believes is its cutoff
for your filing to be filed timely. Mid-March
2013 could be the latest time that some fil-
ing services are able to accept Form 10-K
filing commitments in light of the additional
time required for revisions to drafts and for
completion of XBRL tagging.
9. Make sure that the audit can be complet-
ed and the Form 10-K drafted and reviewed
by the auditors within the time required.
Pick a target date for completion and request
calendar commitments from the companys
legal counsel and auditors to ensure timely
Form 10-K filing.
Getting an early jump on all of these
items, plus any other items recommended by
the reporting companys experienced legal,
accounting, and auditing team, is recom-
mended to ensure the timely filing of the
companys Form 10-K. File the Form 10-K as
soon after year end as possible.
The law firm of Russell C. Weigel, III, P.A. practices
securities law nationwide and specializes in taking
companies public, helping public companies prepare
SEC filings and stay compliant with federal and state
securities laws, preparing transaction and disclosure
documents for private capital raises, and defending
issuers and other securities industry participants from
SEC and FINRA enforcement actions and from cus-
tomer arbitrations.
Russell C. Weigel, III, was a branch chief and
special counsel at the U.S. Securities and Exchange
Commission and served during the years 1990-2001. n
COMP L I ANCE CORNE R
Annual Report Planning or
Avoiding SEC March Madness
A
chievement of a timely filed annual
report became more difficult and
riskier in 2013 due to the SECs
XBRL protocol implementation (the coding
of financial statements). Greater filing diffi-
culty is anticipated due to the additional time
(perhaps double time) required to format
financial statements according to the SECs
XBRL protocol, while at the same time the
SEC eliminated the grace period previously
available for filing a delinquent XBRL report.
This double threat, a potential March 2013
EDGAR filing bottleneck for which the SEC
promises no relief, I have named, SEC March
Madness.
However, the risk of delinquent filing can
be minimized if management takes appropri-
ate steps at an early stage of the planning of
its annual report. This Compliance Corner
identifies certain planning matters that, if
addressed early in the assembly of the annu-
al reports components, may facilitate the
reporting companys avoidance of SEC March
Madness. This list is not exhaustive, and all
companies should seek competent legal and
accounting advice as to their individual cir-
cumstances.
tax PlanninG
1. Need a tax opinion? Consult your auditor
whether it will require a tax opinion on any
new matters that may have income tax impact
before it will issue its audit opinion. Engage
a tax expert well in advance of the year-end
audit.
auDit PlanninG
2. Have a pre-audit planning meeting with
the auditor. Arrive at decisions on timing and
what the auditor will need to see in the way of
supporting documentation. If the audit firm
has changed during the fiscal year, make sure
that the new auditor has access to all needed
prior audit work files. If the audit engage-
ment partner has changed, meet with the new
engagement partner to insure proper conti-
nuity and expectations. Inform the auditor of
the names of firms providing tax opinions or
asset impairment appraisals.
3. Have inventory? Start the planning of
the physical year-end inventory count and
coordinate the timing and procedures with
the audit firm.
4. Review the auditors prior year comment
letter issued to management and determine
if all items addressed in the letter have been
remedied. Prepare appropriate documenta-
tion to support reasons why any items have
not been corrected.
5. Is an independent appraisal needed?
Examine the transactions that have added
intangible assets to the financial statements.
Determine if they are to be written off or
whether an independent appraisal will be
obtained. Have that appraisal done prior to
the commencement of audit fieldwork.
6. Determine if any unusual or infrequent
transactions exist requiring special disclosure
or special handling on the face of the financial
statements. Review the latest releases of the
FASB and be sure to include any changes in
the footnotes of the financial statements.
mD&a PlanninG
7. Identify and collect documentary support
for the MD&A discussion of known trends
StockWord Puzzle
TM

Across
2 - APO
4 - StockNewsNow Radio hosted by
7 - General solictation non-_________ protects private companies
8 - If the OTC has market makers, Exchanges have?
11 - Coffee and Nutritional Products company
12 - Orphanbiotec health campaign symbol
15 - Micro-cap company defned maximum revenue dollar value
18 - First Fidelity Insurance provides this insurance for micro-caps
23 - International Stock Exchange Executives Emerti
24 - indicate your market interests in Micro-Cap Review
25 - Symbol for Organic Alliance
27 - Gordon Chiu wrote on ________?
29 - Silver is highly recommended by this contributing author
30 - Brett Goetschius
32 - Foundation Orphanbiotec fghts
35 - What does the W in BDW stand for?
37 - there are 20 of these in the US Senate
38 - Not an IPO, Not an APO this is more direct
40 - Marksman
41 - Leslie Richardson is the _______correspondent for SNN
42 - New writer in this issue Fred
43 - Thomas Carter is an expert in helping companies arrange
this type of fnancing
44 - Mary Jo White is next chairperson of this commission
45 - GrowthCapitalist.com publisher
49 - DPO
53 - Exxon-Mobil overtakes this company for highest market cap
54 - Most important part of a public company is __________?
55 - Shoreline growth is from drilling and __________
56 - Exchange Traded Funds
58 - Closure Article written by
60 - Name stock exchange which sold for $8.2 Billion in the last
quarter of 2012
61 - according to Merriam-Webster a defition of commodities
62 - Moblie
63 - to manage risk
65 - Favorite fnancial conference of 2012?
66 - Ask Mr.Wallstreet thememe
68 - David Morgan nickname
69 - gold story
70 - Jack Leslie specialty
Down
1 - PIPE
3 - The ISEEE Orlando _________ Report on SMEs
5 - This issue WallStreet Chicken theme
6 - CMPO
8 - SEMDA
9 - Mark Shore Column
10 - Ombudsman
12 - According to Lahiji, the less shares the ________.
13 - Key to Pubco market awareness
14 - $300 Million is a ___________market capitalization
dollar amount
16 - Gregory Bowes article is about this topic
17 - Chris Lahiji compares the stock market to________?
19 - ROI
20 - CME
21 - SNN database targeted to
22 - Retired SEC head
26 - The two most heard words at yearend
28 - This Index rose over 16% in 20121
30 - Jump Start for Jobs Act signed into law by
31 - Birds of Prey
33 - Stan & Seth Yakatan expertise
34 - Jonathan Hornik is the Mayor of this place in New
Jersey
36 - RDO
39 - fnancial advice to broker dealers
44 - cover story about oil
46 - January 24, 1848
47 - SNN targeted market awareness article writer
48 - Erick Nelsons article focused on?
49 - Leading Crowd Funding Activist
50 - Name of Leonard Rosens Conference
51 - 2012 Hurricane hits Wall Street
52 - the world expert on crowd funding
57 - fnancial mountain edge at yearend
59 - general solicitation no...
64 - Sarbanes
67 - Small and medium sized companies acronym
Answers in the classifeds
The average deal size rose 38% to $39.83 mil-
lion, sharply reversing a four-year trend in
falling deal size.
The increasing deal size in 2012 reflects
a surge in convertible debt and convertible
preferred stock by large cap issuers seeking to
literally capitalize on ultra-low interest and
dividend rates. A dozen large cap companies
raised $400 million or more in convertible
debt or equity private placements, including
four which raised more than $1 billion in
convertible offerings: Sony, Sprint Nextel,
ASML Holdings, and Credit Suisse Group.
Selecting out these mega-deals brings the
average size of unregistered PIPEs in 2012
down to $19.3 million, and the total capital
raised in non-mega offerings to $11.7 billion.
The role of registered offerings in the
make-up of the equity private placement
market continued to grow in the fourth year
since their emergence in the liquidity crisis
of 2008. Registered direct offerings (RDOs)
and confidentially-marketed public offerings
Growth Equity Investors
Dominate 2012 PIPE Market
F
undamental investment-oriented growth equity investors increasingly replaced trad-
ing-oriented funds as leaders in the equity private placement market in 2012, marking
a changing of the guard in an area of the capital markets critical to the development of
emerging growth companies.
For the first time since the dawn of the
PIPE (private investment in public equi-
ty) market in the mid-1990s, a long-only
mutual fund manager led the market in
total deals and total investment among active
investors, usurping the fast-money hedge
funds that had long dominated the market.
Fidelity Management & Research invested
$190.7 million in 45 growth equity private
placements in 2012, making the mutual fund
behemoth the leading active investor in the
market in both number of deals and total
investment, according to PIPE market moni-
tor PlacementTracker. But Fidelity was not
alone among fundamental-oriented investors
making their way up the PIPE ranking lists
last year. Of the top 25 investors in the mar-
ket, at least 10 are generally regarded as long-
only, fundamental-focused mutual and ven-
ture capital fund managers, including insur-
ance and annuity giant TIAA, Wellington
Management, Columbia Management, T.
Rowe Price, and Orbimed Advisors.
The evolution of the PIPE market away
from the arbitrage and structured invest-
ment funds that long dominated the market
was reflected in last years investment bank-
ing and legal counsel leaders as well. Roth
Capital led the agent rankings as long-dom-
inant Rodman & Renshaw imploded, its
hedge fund investment clients continuing
n BY BRETT GOETSChIUS
their now four year-long retreat. Another
top banker in growth equity private place-
ments, Cowen & Co., led dealmaking in the
healthcare sector, closing 28 deals that totaled
$1.5 billion in capital raised.
Among law firms serving the PIPE
market, Cooley, with its deep experience
representing venture and private equity-
backed companies, dislodged long-reign-
ing Sichenzia, Ross, Friedman Ference as
top issuer counsel.
Overall, PIPE deal-making was down over
2011 while total capital raised was up, reflect-
ing a trend toward bigger, higher quality deals
with larger market cap companies, especially
in the area of registered private placements,
which have been a rich source of capital for
small cap emerging growth companies over
the past two years. Almost $32.75 billion of
capital was raised in 822 equity private place-
ments in 2012, compared to $26.6 billion in
924 deals in 2011, a 23% increase in total
investment amid an 11% fall in deals closed.
GRAPHIC#1 Rank InvestmentAdvisor Deals AmountInvested
1 FidelityManagement&ResearchCorpora>on 45 $190,685,292
2 HeightsCapitalManagement,Inc. 33 $140,566,841
3 MillenniumManagement,LLC 33 N/A
4 HudsonBayCapitalManagementL.P. 29 $115,356,242
5 UBSO'ConnorLLC 26 $14,318,746
6 TeachersInsuranceandAnnuityAssocia>on 26 N/A
7 D.E.Shaw&Co.,L.P. 25 N/A
8 BakerBrothersAdvisors,LLC 24 $139,095,699
9 DeereldManagement 24 $49,786,201
10 IroquoisCapitalL.P. 23 $12,144,508
GRAPHIC#2
GRAPHIC#3
(UseSVGleifneeded).
TopRankedInvestorsinPIPEDeals2012
Source:PlacementTracker
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2009 2010 2011 2012
M
i
l
l
i
o
n
s
AveragePIPEDealSize
Source: PlacementTracker
(CMPOs) made up a significant segment of
the equity private placement market with
$6.33 billion or 19% of the total capital
raised, a 21% increase over 2011.
But it was the buoyant market for at-the-
market (ATM) offerings that really made
2012 the year of the registered equity offering,
with 122 offerings announced, an increase
of 42% over 2011, raising $3.27 billion of
over $20 billion in best-efforts commitments
made during the year. Of those 65 issuers that
reported capital raised through ATMs by the
end of the year, the average proceeds topped
$50 million per offering.
As the ATM market grew, it expanded from
its typical mid-cap issuer base to include
many more small cap issuers. ATM issuance
by emerging growth companies with market
caps of less than $1 billion increased 43% to
69 deals in 2012.
The 2012 PIPE market was buffeted by
headwinds both figurative and literal. The
end of the fourth quarter, traditionally the
strongest issuance period of the year, was
restrained first by Hurricane Sandy, which
depressed deal making in the New York-
New Jersey region for several weeks as Wall
Street slogged through a crippled New York
City, and then by political intransigence in
Washington over a resolution to the fis-
cal cliff crisis that threatened to throw the
countrys economy back into recession just as
signs of resurgence began to appear.
As we entered 2013, Sandys floodwaters
had receded and the physical recovery of
the New York tri-state region was underway.
But little had been resolved in the fiscal cliff
stand-off. A short 11
th
-hour reprieve had
averted immediate economic catastrophe but
much more difficult political decisions were
simply put off a few weeks or months. The
ongoing uncertainty over how and when
they might be resolved cast a pall over the
capital markets that is likely to depress capital
formation by emerging growth companies at
least until the second quarter.
However, presuming a compromise is
reached between the deficit hawks and the
spending doves in Washington that neither
guts the federal budget nor explodes the
national debt, the underpinnings of an eco-
nomic revival are in place to accelerate cor-
porate growth in the second quarter that
should allow high-growth companies to tap
the equity private placement market for low-
cost, high return-on-investment capital. If
that scenario unfolds, 2013 could be a robust
year for PIPE and growth equity capital rais-
ing in particular, as the markets shift towards
fundamental investment over liquidity arbi-
trage continues to align private placement
investors with shareholder equity growth.
Brett Goetschius is the editor of Growth Capital
Investor, the journal of emerging growth company
finance. He has covered the emerging growth capital
market since 1999 and is the former editor and publisher
of The PIPEs Report, The Reverse Merger Report, and
The Registered Offerings Report. This article is excerpt-
ed from the January 21 issue of Growth Capital Investor.
Interested in the full report with complete data on
activity in the emerging growth capital market?
Download a complimentary copy at http://www.
growthcapitalist.com/mcr n
Or scan this with your cell phones QR reader:
Annual Deals
(All PIPEs and Reg S Deals)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(Est.)
0
500
1,000
1,500
2,000
2,500
3,000
$0M
$25B
$50B
$75B
$100B
$125B
$150B
Deals
Amount
GRAPHIC#1 Rank InvestmentAdvisor Deals AmountInvested
1 FidelityManagement&ResearchCorpora>on 45 $190,685,292
2 HeightsCapitalManagement,Inc. 33 $140,566,841
3 MillenniumManagement,LLC 33 N/A
4 HudsonBayCapitalManagementL.P. 29 $115,356,242
5 UBSO'ConnorLLC 26 $14,318,746
6 TeachersInsuranceandAnnuityAssocia>on 26 N/A
7 D.E.Shaw&Co.,L.P. 25 N/A
8 BakerBrothersAdvisors,LLC 24 $139,095,699
9 DeereldManagement 24 $49,786,201
10 IroquoisCapitalL.P. 23 $12,144,508
GRAPHIC#2
GRAPHIC#3
(UseSVGleifneeded).
TopRankedInvestorsinPIPEDeals2012
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2009 2010 2011 2012
M
i
l
l
i
o
n
s
AveragePIPEDealSize
Introduction of the
Commodity Markets
COMMODI TY CORNE R
A mass produced un-specialized product.
1
In todays global markets both large and
small firms will trade and hedge commodi-
ties as part of their daily business as either
a producer or end-user of the commodity.
For example a chocolate candy producing
firm will need to purchase cocoa, sugar and
of course energy to fuel their factories. If
they do business in foreign countries they
may need to buy and sell foreign curren-
cies for hedging or delivery purposes. (See
Currencies in Your Future Portfolio? of the
One could argue commodities have been
around since the beginning of civilization.
People have produced, paid or bartered for
commodities to use for either production
or to consume. Some of the uses of com-
modities include food, energy, construction,
manufacturing, and clothing.
According to the Merriam-Webster dic-
tionary, commodities are defined as: 1) an
economic good. 2) A product of mining
or agriculture. 3) An article of commerce
especially when delivered for shipment. 4)
A
s the introductory Commodity Corner column I found
this to be a good opportunity to introduce commodities
and futures.
n BY MARk ShORE
Spring/Summer 2012 issue).
To manage their price risk, a commodity
producer, such as a farmer may sell a futures
contract to lock-in their selling price. An
end-user, such as a coffee chain may buy a
futures contract to lock-in their purchasing
price. Keep in mind commodity markets
tend to be mean-reverting markets as they
spike or decline from an average price and
then revert back towards that average price
overtime. This is often due to shocks in the
system such as increased demand, reduction
of supply, weather concerns, disruption of
distribution channels or possibly political or
regional events. If a commodity becomes too
expensive, the market participants behav-
ioral mechanism will appear as they seek
less expensive substitutes. This is known in
economics as the substitution effect and one
of the differences to note between commod-
ity and equity trading.
Commodities are traded in two com-
mon locations: either the spot/cash market
usually reserved for industry or sometimes
known as commercials such as produc-
ers, distributors and end-users as the actual
physical commodity is traded. Or the prod-
ucts trade on an exchange such as one of the
futures exchanges found around the world.
The futures exchanges are often utilized
by both commercials and speculators. An
exchange offers commercials the opportu-
nity for immediate offset of their commodity
risk by speculators offering liquidity to take
on the risk. If a commercial has a loss from
hedging, it often means they profited in the
underlying cash market, because they are
holding the opposite direction in the cash
market. One can think of the loss on the
hedge as a premium on an insurance policy.
The Merriam-Webster dictionary defines
a commodity exchange as an organized mar-
ket where future delivery contracts for a
specified grade of a commodity (such as
grains, cotton, sugar, coffee, or wool) are
bought and sold.
2
Many historians point to
the Dojima Rice Exchange in late 17
th
cen-
tury Japan as the first commodity futures
(forward) exchange. The exchange operated
for over 230 years ending just before World
War II.
3
Commodity exchanges often seek com-
modity products to list on their exchange
that tend to have price volatility and/ or
seasonality. Why list a product that has little
or no volatility? This would imply no or
little risk. Futures are founded on the basic
concepts of price discovery from supply,
demand and the movement of pricing.
A listed contract offers standardization of
grade, size and delivery point as a method
of risk management for both the producers
of the commodity as well as the end-user of
the commodity. As the exchanges clearing-
house takes the opposite side of each trade,
it reduces the potential for default risk of the
commodity contract.
In America, many commodity exchanges
appeared around the country in the 1800s.
However, one can point to the Chicago
Board of Trade (CBOT) in 1848 as the begin-
ning of commodity exchanges in America as
a method for commodity producers and
end-users to hedge their commodity risk. It
is also considered to be the oldest existing
commodity exchange in the world.
Prior to the CBOT there was a lot of price
volatility in agricultural markets. Farmers
would bring harvested crops to the Chicago
markets. If they couldnt sell the crops they
were stuck with it and some farmers were
known to dump the unsold crops into Lake
Michigan. It was this price volatility that
prompted the need to hedge agricultural
markets and the introduction of the CBOT.
In 1898 the Chicago Butter and Egg board
was founded and renamed the Chicago
Mercantile Exchange in 1919.
4
Some of the commodity markets include:
Energy markets: Natural Gas, WTI (West
Texas Intermediate) Crude Oil, Brent Oil
Grains: Corn, Wheat, oats and the soy-
bean complex of soybeans, soybean oil and
soybean meal Softs: Coffee, Cocoa, Sugar,
Orange Juice (as noted in the movie Trading
Places they traded: Frozen Concentrated
Orange Juice Livestock: Live Cattle, Feeder
cattle Metals: Gold, Silver and copper. By
the early 1970s, futures exchanges began
trading financial futures as they were per-
ceived as commoditized products beginning
with currency futures and later bond futures
and stock index futures.
Moving forward since the recent financial
crisis, commodities have taken on a new
importance as a non-correlated asset class
for an investors portfolio. As many emerg-
ing nations gain wealth, the demand for
many commodities continues to gain impor-
tance on the world economic stage.
(Endnotes)
1 Shore, M. (2011) DePaul University 798
Managed Futures Lecture notes
2 Shore, M. (2011) DePaul University 798
Managed Futures Lecture Notes
3 West, M.,Private Ordering at the Worlds First
Futures Exchange, Michigan Law Review, Vol. 98, No.
8, Symposium: Empirical Research in Commercial
Transactions (Aug., 2000), pp. 2574-2615
Published by The Michigan Law Review Association
4 Shore, M. (2011) Why Are Congressional
Agricultural Committees Given Oversight of the MF
Global Hearings?
Copyright 2012 Mark Shore. Contact the
author for permission for republication at info@
shorecapmgmt.com Mark Shore has more than 20
years of experience in the futures markets and
managed futures, publishes research, consults
on alternative investments and conducts educa-
tional workshops. www.shorecapmgmt.com

Mark Shore is also an Adjunct Professor at DePaul
Universitys Kellstadt Graduate School of Business in
Chicago where he teaches a managed futures / global
macro course. Mark is a contributing writer to Reuters
HedgeWorld and the CBOE Futures Exchange.
Past performance is not necessarily indicative of
future results. There is risk of loss when investing
in futures and options. Always review a complete
CTA disclosure document before investing in any
Managed Futures program. Managed futures can be
a volatile and risky investment; only use appropriate
risk capital; this investment is not for everyone. The
opinions expressed are solely those of the author
and are only for educational purposes. Please talk to
your financial advisor before making any investment
decisions. n
PROFILED COMPANIES
Graphite one resources:
number one Graphite resource in north america and perhaps the world
M
icro-Cap Review Magazine recent-
ly met Graphite One Resources at a
regional resource conference in of all places,
sunny Palm Springs, California. Graphite One
Resource, from Nome, Alaska, is indeed a very
interesting emerging growth story. Looking
for gold and finding graphite may turn out to
be one of those stories that legends are made
from.
As the story goes, Mr. Anthony Huston,
President of Graphite One, was in Alaska inves-
tigating a gold prospect, when a local geologist
happened to mention that he had done a study
of Graphite Creek while working for the U.S.
government, and had gotten to know the Tweet
family that held the mining rights.
Mr. Huston recalls the geologist saying:
Theres this amazing property that I believe
could be world class.
Mr. Huston and Mr. Charles Chebry,
Chairman and CEO of Graphite One, made
the connection and were instantly impressed.
The Tweets are great partners says Huston.
The founder of the clan, Mr. Nicholas
Tweet, of Norwegian heritage, came to Nome
from Minnesota, must have liked the weather,
in 1899 at the age of 23, when the gold-rush
settlement consisted only of tents, a saloon
built of driftwood and a lone log cabin. Mr.
Tweet prospered, successfully exploiting the
rich deposits of gold that were then strewn
along the beaches of Cape Nome.
Joined a year later by his wife, Evinda, and
their two sons, the family went on to found
N.B. Tweet and Sons, a company still in busi-
ness today and which has operated placer
gold mines on the Seward Peninsula for over
110 years.
As they all got to know each other while
visiting, the deal was settled the old-fashioned
way, with a friendly handshake in Nome,
Alaska.
The parties to the deal were a group of
Canadian entrepreneurs and the descendants
of one of Alaskas foremost pioneer families.
Now, around two years later, the ground-
work has been laid for what has the potential
to become the worlds largest, richest graphite
mine. Calgary-based Graphite One Resources
released an NI43-101 compliant resource esti-
mate that is reverberating through the mining
industry. The full Technical Report describing
the resource was filed on SEDAR January 18,
2013 and can also be found on the Companys
website: www.GraphiteOneResources.com.
Its still dawning on people that the poten-
tial production at Graphite Creek on the
Seward Peninsula could dwarf the combined
output of the rest of the worlds leading
graphite producers.
Based on the size of the resource, flake
content and potential, we believe this to be
the largest reported flake graphite deposit
in the world. We will look to take an aggres-
sive approach in 2013 to advance the project
towards production in the near future, says
Mr. Anthony Huston, President of Graphite
One.
Gold has always been the Tweet familys
major preoccupation. But in 1914, the outbreak
of World War I triggered a surge in demand for
graphite. The existence of high-grade graphite
deposits in the Kigluaik Mountains 65 km
north of Nome had been known since 1900,
and Mr. Nick Tweet had staked claims there.
During the war years, the claims produced
some 500 tons of graphite, which was hauled
three kilometers down to a barge in the bay by
one of the first gasoline-powered tractors seen
in the territory. That same HoltTM tractor is
now on display in Taylor, Alaska.
Writing in 1919, geologist G.L. Harrington
described the Kigluaik deposits as very high
grade (up to 98 percent carbon), and compa-
rable to high quality flake graphite deposits
produced elsewhere; even the poorest mate-
rial is regarded as good ore as compared to
many commercial locations.
When the war ended, the market for graph-
ite shrank and the Tweet family claims went
largely un-worked for decades. The claims
were still in good standing when Mr. Huston
and Mr. Chebry approached the family in
2011.
We spent over six months getting to know
them, says Mr. Huston. It was not unusual
to have 16 members of the family in the
room, all wanting to understand the future
partnership.
Its extremely important to recognize that
we did close to 12 months of due diligence
before we even closed the deal, added Mr.
Huston.
The deal as concluded gives Graphite
One a 100 percent interest in the claims on
payments to the Tweet family trust totaling
$425,000 by March 2014. The agreement also
allows for a five percent production royalty
that can be reduced to three percent on pay-
ment of $2 million for each one per cent cut,
according to Mr. Charles Chebry, Graphite
One chairman, CEO and director
Part of the due diligence Mr. Huston men-
tions included a 2011 report stating that the
Kigluaik graphite deposits were in an excel-
lent configuration for open-pit mining and
represented an excellent exploration oppor-
tunity.

Mr. Dean Besserer, Vice President of
Exploration at Graphite One, recalls: We
used some geologists with local knowledge to
do a 10-day program. We did some mapping
that showed a strike length extending along
5 kilometers and the schists were about 100
meters thick. We had a good feeling, based
on the grades we were seeing and we became
increasingly excited.
Subsequent events have more than justi-
fied the early optimism and indications, Mr.
Chebry added: The deal with the Tweets also
required Graphite One to spend $1.525 mil-
lion on exploration over a three-year period.
To date, the company has spent more than
$4.5 million, partly to fund an aerial survey
in which a helicopter picked up electromag-
netic evidence strongly suggesting that the
strike length in fact extends for 18 kilometers,
more than three times as long as previously
mapped.
The NI 43-101 report states: an important
conclusion of the SkyTEM survey is the likeli-
hood that high-grade graphite mineralization
at the Graphite Creek Property extends con-
tinually for a distance of at least 18 km.
An 18-hole diamond drilling program,
totaling 4,248 meters, was begun in June
2012 and the NI 43-101 results included an
impressive inferred resource of 165.5 mil-
lion tonnes at 4.61 percent graphite with a
potential resource of between 235 and 492
million tonnes of 4.2 percent to 7.9 percent
graphite. The resource also
includes 25.44 million tonnes
of 9.69 percent graphite and 7.8
million tonnes of 13.5 percent
graphite which is all at surface
according to Mr. Besserer.
As good as these results are
Mr. Besserer notes that the
potential for 492 million tonnes
relates to only a small part of the
entire 6,799-hectare Graphite
Creek property less than 30
percent.
The deposit is scalable to meet any future
demand. With our inferred resource and our
potential, we are already far larger than any-
body else and could easily exceed 1 billion
tonnes.
Mr. Besserer lists other positive aspects of
the Property, including the size and grade of
the coarse flake graphite and the relative ease
with which it can be extracted.
Undoubtedly, we will have the best strip
ratio of anybody, says Mr. Besserer. Our high
grade deposit is exposed along the face of the
mountain, unlike most deposits. With us, its
day one.
Even putting a conservative estimate of
US$1,200 a tonne on the price of graphite,
Graphite One could earn some US$60 million
producing only 50,000 tonnes a year.
Prices for graphite are constantly fluctuating.
They crashed to as low as US$600 in the 90s as
Chinese producers flooded the market. Prices
recovered and in 2005, premium product was
selling at close to US$3,000, but the global
recession has seen those levels cut by half.
Nevertheless, industry watchers note that
current supplies are tight and that very few
new graphite mines have come on line. They
say the supply problem could become more
acute as economies recover and new, high
growth applications for graphite, such as
lithium ion batteries, fuel demand and con-
sumption.
Ceasars Report, a popular online site cov-
ering junior mining companies, noted last
year that Graphite One is standing out in
the crowd as the only successful graphite
explorer in the USA.
Mr. Ken Chernin, Equity Research Analyst
with Jennings Capital Inc., in Toronto, said of
Graphite Ones Alaska prospect: We found it
very interesting the first time we spoke with
Anthony (Huston) prior to the NI 43-101.
Its obviously very sizeable and the logistics
appear very workable. And, of course, theres
the fact that its situated in the United States in
a mining-friendly jurisdiction.
Mr. Huston, whose background is in tech-
nology, says he foresees a multitude of new
uses for graphite as new technologies emerge
in the booming economies of Brazil, India
and China, as well as in developed economies
such as the U.S. and Japan. This is a unique
opportunity for Graphite One and all stake-
holders which merit a fast-track to produc-
tion, says Mr. Huston. The company
fast-track to-do list is an 8,000-meter drill-
ing program, metallurgy, engineering and
permitting.
Decisions yet to be reached include how
to get the ore from the mine to its custom-
ers. Graphite Creek can currently be reached
only on foot or by helicopter, even though
its only a stones throw from open water and
two roads.
People say, Well, how are you going to get
the graphite out of there? says Huston. If in
the early 1900s they figured out how to get
graphite on to a barge and ship it to Seattle
and San Francisco, I think that we will figure
something out.
One thing is certain: Once
the graphite gets to the deep-sea
port in Nome, it will be conve-
niently close to prime custom-
ers in the U.S. and along the
Asia-Pacific seaboard.
In conclusion, being in the
right place at the right time can
sometimes lead to a treasure
trove of great riches. n

cial conferences we attend and you only pay
to access and distribute to the SNN database.
SNN products are all designed to be user
friendly and efficient. Why not try video or
a radio sound bite or article from micro-cap
review magazine or newsletter banner ad? Or
even your link to your website or 10q, 8k, a
research report or all of the above. Lets see
what works for your company, I would try
every possible combination until I achieved
the best bang for the buck. SNN distribu-
tion is to an opted in audience, no spam. You
simply choose your wish list from our buffet
menu apply your credit card payment and
send us your link message for distribution.
Compare your past years return on invest-
ment from your investor relations expense.
Calculate and answer the following four
questions: How many new shareholders?
What is the growth in daily average vol-
ume? Are your current shareholders happy?
Could you have accomplished a capital raise?
My guess is your ROI could have been better.
Do not make the common mistake of cutting
back on investor relations when you need it
the most; simply deploy your budget differ-
ently. Continue to do what works and begin a
reach and frequency market awareness cam-
paign with SNN as your service provider. n

Targeted Market
Awareness & Pinpoint
Investor Visibility
O
ne of my trusted colleagues
recently texted me the follow-
ing comment: SNN has so
much distribution we are going to burst.
I read his text and realized how right and
spot on he was! It was as if we had reached
distribution critical mass. After years of
development, hard work and the best cre-
ative team on the planet the SNN mar-
ket awareness program is ready for sale
to a market ripe and ready for affordable
modern methods of new investor acquisi-
tion. Now any company, public & private,
can pick and choose digital distribution
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tor, geographic region, accredited inves-
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send SNN products such as SNNlive vid-
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In comparison: using SNN is like fishing the
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lure. When you fish with a net, chances are
a great deal better for a good catch, even a
whale catch could be possible. For example
send an SNNLive interview link to 5,000
RIA or 10,000 accredited investors opted-in
as investors interested in micro-cap compa-
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and confirm that your message is actually in
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video interview is complimentary at finan-
n BY ROBERT BOBBY kRAFT

Once Cash was King,
Then Content was King,
TodayDistribution is King!
Over 40 milliOn targeted database
n Over 45,000 US and Global Media Outlets
n 23 Online Video Social Networks
n Reach Targeted Individual and Institutional Investors
Accredited Investors
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Financial Advisors
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Fund Managers
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email: info@snnwire.com
Phone: 213/706-3000
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istribU
tiO
n

Ask Mr. WallStreet is much different from other newsletters.
They are short in length, flled with innuendo and puns, and humorously
sensible about topical subjects like the Facebook IPO, Obamacare and the
Jobs Act to mention a few.

The Ask Mr. WallStreet Newsletter began as my chicken scratch notes
and simple commentary inspired by my reaction to events taking place in
the stock market, observations from reading market news and current events
plus I needed to vent both my frustrations and give advice. Once I fgured
out how to use my iPhone I was able to use time on planes and waiting
areas to quickly spew my thoughts digitally without losing my own self
proclaimed pearls of wisdom. The frst ten I wrote and sent to friends,
family and associates got wonderful feedback and they started to get
sent around and suddenly the world was turned on to Ask Mr. WallStreet.
You may ask why Ask Mr. WallStreet? So my answer is because the Mr.
WallStreets URL was taken and I like the moniker so why not Ask Mr.
WallStreet. The other reason for Ask Mr. WallStreet is because I am asked
more questions about things regarding Wall Street whether at a fnancial
conference, cocktail party or sitting on a panel or airplane. Answering
questions is fun unless so ridiculous they shouldnt be answered.

From its humble beginning, Ask Mr. Wallstreet now has over 100,000
subscribers and is growing every day. With almost 30 years of experience
on Wall Street under my belt I do my best to refect the nature of things on the Street as well as my perception of the world. Although
fully ensconced in the micro-cap world I have morphed from stockbroker into a story teller and now I get to combine my interests with
my experiences and shout it out to anyone willing to subscribe, and its FREE to subscribe. No worry we arent starving, we make money
allowing our sponsors and advertisers to try and sell you something.

So hopefully you get the picture and please send me your questions to send me a question please send it to askmrwallst@gmail.com
and subscribe at StockNewsNow.com. Lastly the graphic of Ask Mr. WallStreet comes from the cartoon and comic strip, the Wall Street
Chicken, whos main character, was a young Wall Street guy like me. The AMWS graphic is an older and wiser character. Okay tacky
but we think it works and makes some sense. I used to love creating jokes when I sat on a trading desk believe me when I tell you Ask Mr.
WallStreet is a joy to write and great to share. So if you have a smile on your face after checking out the newsletter I did my job!
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Ask Mr. WallStreet is published by SNN Incorporated. Copyright 2012 & Trademark of SNN Incorporated. All Rights Reserved.
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Email: info@snnwire.com Phone: 213/706-3000 |
| gmckenzie@snnwire.com Phone: 910/255-0336
Hosted by Former
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Gary McKenzie
Print
Radio
Newsletter
Distribution
MARKET AWARENESS & INVESTOR VISIBILITY PROGRAM
Digital Versions:
or StockNewsNow.com MicroCapReview.com
818-983-5500
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www.SNNwire.com
www.microcapreview.com
Robert Bobby Kraft
V.P. Communications and
Business Development
Start Spreading Your News
@StockNewsNow

Once Cash was King,
n Over 45,000 US and Global Media Outlets
n 23 Online Video Social Networks
n Reach Targeted Individual and Institutional Investors
Financial Advisors
Fund Managers
CEOs/Companies
Phone: 213/706-3000
sn
n
is tH
e Kin
g
O
F d
istribU
tiO
n

Ask Mr. WallStreet is much different from other newsletters.
They are short in length, flled with innuendo and puns, and humorously
sensible about topical subjects like the Facebook IPO, Obamacare and the
Jobs Act to mention a few.

The Ask Mr. WallStreet Newsletter began as my chicken scratch notes
and simple commentary inspired by my reaction to events taking place in
the stock market, observations from reading market news and current events
plus I needed to vent both my frustrations and give advice. Once I fgured
out how to use my iPhone I was able to use time on planes and waiting
areas to quickly spew my thoughts digitally without losing my own self
proclaimed pearls of wisdom. The frst ten I wrote and sent to friends,
family and associates got wonderful feedback and they started to get
sent around and suddenly the world was turned on to Ask Mr. WallStreet.
You may ask why Ask Mr. WallStreet? So my answer is because the Mr.
WallStreets URL was taken and I like the moniker so why not Ask Mr.
WallStreet. The other reason for Ask Mr. WallStreet is because I am asked
more questions about things regarding Wall Street whether at a fnancial
conference, cocktail party or sitting on a panel or airplane. Answering
questions is fun unless so ridiculous they shouldnt be answered.

From its humble beginning, Ask Mr. Wallstreet now has over 100,000
subscribers and is growing every day. With almost 30 years of experience
on Wall Street under my belt I do my best to refect the nature of things on the Street as well as my perception of the world. Although
fully ensconced in the micro-cap world I have morphed from stockbroker into a story teller and now I get to combine my interests with
my experiences and shout it out to anyone willing to subscribe, and its FREE to subscribe. No worry we arent starving, we make money
allowing our sponsors and advertisers to try and sell you something.

So hopefully you get the picture and please send me your questions to send me a question please send it to askmrwallst@gmail.com
and subscribe at StockNewsNow.com. Lastly the graphic of Ask Mr. WallStreet comes from the cartoon and comic strip, the Wall Street
Chicken, whos main character, was a young Wall Street guy like me. The AMWS graphic is an older and wiser character. Okay tacky
but we think it works and makes some sense. I used to love creating jokes when I sat on a trading desk believe me when I tell you Ask Mr.
WallStreet is a joy to write and great to share. So if you have a smile on your face after checking out the newsletter I did my job!
Subscribe to FREE Newsletter
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to subscribe go to:
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StockNewsNow.com
Ask Mr. WallStreet is published by SNN Incorporated. Copyright 2012 & Trademark of SNN Incorporated. All Rights Reserved.
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Hosted by Former
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Radio
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Distribution
MARKET AWARENESS & INVESTOR VISIBILITY PROGRAM
Digital Versions:
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Robert Bobby Kraft
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Business Development
Start Spreading Your News
@StockNewsNow
no longer dedicated solely to new pools of
hydro-carbon deposits, but on new ways to
monetize hydro-carbon reservoirs that have
existed for decades if not hundreds of years.
As a result of an ever changing industry,
PROFILED COMPANIES
marksmen energy
the best Place to look for oil is where its already been Found.
Ticker symbol: MAH.V
A
ccording to Archie Nesbitt,
President & CEO of Marksmen
Energy; 2013, is set to be an excit-
ing year for oil and gas exploration and
development as the industrys attention is
shale has received a lot of media attention
in recent years. In particular, notice has been
brought to Ohios Utica shale deposits, a
region in which major oil companies drill
deep horizontal wells. These wells typically
include the costly expenditure of many mil-
lions of dollars in order to frac and develop
resources that may not be economically via-
ble due to the current global price of natural
gas.
As public opinion shifts demand to a more
efficient management of the worlds natural
resources, scientists and industry experts,
have been hard at work to develop new
methods of oil and gas exploration; drill-
ing and completion techniques which can
provide more efficient extraction methods
of hydro-carbon resources around the world.
While industry and media attention has
shifted towards the more glamorous contro-
versial oil markets, it should be noted that at
the most recent turn of the century, Ohio`s
Lima-Indiana region was the world`s larg-
est oil field! In fact it is controlled by none
other than the Rockefeller family whose
vast wealth was built in this very region.
Production records indicate that close to one
billion barrels of oil were extracted from the
vast reserves of the Lima-Indiana field alone.
These fields were so enormously productive
and they were also responsible for creating
some of the world`s best oil (42 API) with
production taking place very near to the sur-
face reducing the cost of drilling leading and
providing rapid return on investment (ROI)
and tremendous profits for the producers
and their investors.
The discovery of oil gushers like Spindletop
in Texas, wildcatters abandoned Ohio in
favor of greener pastures. Local operators
continued to explore Ohio on a hit and miss
wildcat basis, without the benefits of mod-
ern scientific and technical expertise, nor the
high-tech computer animated technologies
that modern scientists have discovered and
refined over time.
So interestingly, in Ohio, without
the advantage of modern technology, oil
fields as large as 127,000,000; 50,000,000
and 40,000,000 barrels of light recoverable
Pennsylvania Crude and high BTU gas,
with associated and value liquids, were nev-
er-the- less discovered.
Modern Ohio remains an economically
sound region for oil producers looking to
explore and develop lucrative reserves with
associated natural gas and liquids potential.
Many operators continue to drill without
2D Seismic interpretation and data at costs
of $200,000 - $300,000. These processes and
their associated costs typically yield 100,000
to 200,000 barrels of oil, making for excellent
economics.
Marksmen Energy Inc. has assembled a
proven team of experienced public company
management and resource executives for its
management and Board of Directors.
In addition, Marksmen is using the ser-
vices of top flight technical professionals,
geologists, engineers and geophysicists to
direct projects and land acquisition in Ohio.
The Marksmen team has been responsible
for identifying and developing roughly two
hundred drill locations using its own pro-
prietary technical information over the last
twenty years.
Mr. Archie Nesbitt, President and CEO of
Marksmen Energy Inc. started his career in
public company resource exploration well
before he had even obtained his business
and law degrees some forty-three years ago.
Archie has the following to offer about
Marksmen and its future in the Ohio region:
I am very excited about what really can
be said to be a once in a lifetime opportunity
and the potential we have to build a signifi-
cant oil company in Ohio. I have assembled a
talented, professional team of proven indus-
try experts and together, Im convinced we
will create very significant shareholder value
for our investors. Marksmen has developed
joint ventures with a number of family
owned Ohio based operating teams that have
been in the business for generations and
have significant land positions ready for
immediate exploration and development.
What we will bring to the table are the
financial resources and the proven techni-
cal and engineering expertise thats just not
otherwise available to them.
The Best Place to Look for Oil is Where
its Already Been Found. n
While industry and media attention has shifted
towards the more glamorous controversial oil mar-
kets, it should be noted that at the most recent turn
of the century, Ohio`s Lima-Indiana region was the
world`s largest oil field!
He currently dedicates his time to lecturing
throughout the world on the therapeutic
benefits of vitamins and minerals and lobby-
ing the U.S. Food and Drug Administration
on behalf of the dietary supplement indus-
try. Dr. Wallachs work has been published in
more than 70 peer-reviewed and referenced
scientific journals and books. Dr. Wallachs
40 year message of preventa-
tive health is the foundation
of Youngevitys 90 for Life
marketing campaign.
The 90 for Life cam-
paign, which is the largest
generator of revenue and
growth for the company,
has made it easier than ever
for Youngevitys large field
of distributors to introduce
people to the concept that
the body needs a core group of 90 essen-
tial nutrients to function at optimal levels.
These core products have undergone clini-
cal studies at Clemson Universitys Institute
of Nutraceutical Research (www.youngev-
ity.com), which is one of the most highly
regarded organizations in the field of phyto-
nutrients, vitamins and minerals. The 90 for
Life campaign is going strong and as a result
of this powerful message Youngevitys field
leaders have seen their business grow by 300
percent since the merger.
Youngevity stands by its commitment to
provide its customers with the most accurate
PROFILED COMPANIES
Direct Selling and traditional marketing
AL International, Inc. (Ticker:
JCOF) (www.alintjcof.com), is a fast grow-
ing, innovative, global direct marketer
dedicated to improving lifestyles through
vibrant health and flourishing economics.
AL International offers more than 400 high-
quality, technologically advanced products;
including nutritional products, sports and
energy drinks, health and wellness-related
services, lifestyle products (pets, spa and
bath, garden), gourmet fortified coffee, skin-
care and cosmetics. Our Nutritional and
Healthy Lifestyle products and services are
distributed through a global network of
Preferred Customers and Distributors. AL
International believes that combining the
best of the direct selling industry with the
fundamentals and capabilities of a tradition-
al business model will exponentially maxi-
mize shareholder value.
AL International is a newly created com-
pany that was formed in July of 2011, by the
merger between Youngevity Essential Life
Sciences and Javalution Coffee Company.
AL Internationals goal is to provide health
conscious consumers with nutritional and
healthy lifestyle solutions that will help them
achieve their health and wellness goals. Since
the merger, AL International has shown an
impressive track record of steady growth
and revenues. On February 12
th
, 2013 the
Company filed its Form 10 Registration
Statement with the SEC.
According to a recent research report, by
Opus Group Research http://www.alintjcof.
com/investors.php, AL International has
had impressive revenue growth in a short
period of time and is now past the half-way
mark of becoming a $150 million annual
revenue company by 2014. Revenues have
doubled each year since 2010 and continue
to exceed market expectations.
multi-FaceteD
aVenueS oF
SucceSS
younGeVity
Youngevity Essential Life
Sciences is the direct selling
division of AL International
and offers nutritional and
lifestyle products and services
through a global consumer
cloud of direct selling networks. Youngevity
is headquartered in San Diego, Ca., and was
founded in 1997 by Dr. Joel Wallach, DVM,
ND and Dr. Ma Lan, MS, MD. The world
headquarters, in Southern California, has
grown to 58,000 sq. feet and within five years
AL International has a global network of dis-
tributors and preferred customers, including
offices in Canada, Australia, New Zealand,
Singapore, and Japan.
A biomedical research pioneer, Dr. Joel
D. Wallach, DVM, ND is renowned for
his groundbreaking research on the health
benefits of selenium and other minerals.
where the new economy
meets the best of the old
economy!
and thorough information needed in order
for them to make comprehensive decisions
regarding their health. Youngevity man-
agement feels so strongly about this that
they have successfully petitioned the U.S.
Food and Drug Administration to establish
Qualified Health Claims for Selenium and
Omega-3 Essential Fatty Acids.
Youngevitys Scientific & Athletic Advisory
Boards comprises some of the most respect-
ed names in nutrition and athletics. Working
together with the Companys founder, Dr.
Joel Wallach, DVM, ND, the Boards respon-
sibility is to keep the Youngevity products
on the cutting edge of performance science
and continue its relevancy in highly stressful
conditions such as professional sports.
On May 2
nd
2013, Youngevity will hold
its national convention in Las Vegas, Nevada,
where Marilu Henner (www.Marilu.
com), the companys new celebrity brand
ambassador will be the key note speak-
er. Marilu Henner further substantiates
the companys mission in promoting active,
healthy lifestyles.
clr roaSterS
CLR Roasters represents the traditional mar-
keting side of the company, based out of
Miami, Florida it is a wholly-owned sub-
sidiary of AL International. CLR Roasters
produces coffees under its own boutique
brands, Caf La Rica, Josies Java House,
and Javalution, as well as manufactures a
variety of private labels throughout vari-
ous tiers of distribution. Industries served
include major national sales outlets, hos-
pitality, cruise lines, health and wellness
facilities, office coffee service providers, and
convenience store distribution.
CLR Roasters created a unique line of cof-
fees with health benefits under the JavaFit
brand, marketed through Youngevity, and is
the first entrant in the highly unique niche
market of fortified coffee. CLR Roasters
is one of the largest coffee suppliers to the
cruise line industry in North America and
provides private label blends to a variety of
cruise lines in South Florida.
CLR Roasters, which represents 12% of the
companys total revenues, has grown 160%
since the merger in July of 2011. Recently,
CLR Roasters executed a lease agreement to
increase the size of its plant by 60% and has
expanded its roasting, grinding, and pack-
aging capacity to meet increasing demand.
CLR Roasters has secured distribution with
Publix, Winn Dixie, Wal-Mart, Sedanos,
and several large independent operators.
(INSERT PIC OF CLR ROASTERS)
beinG an eFFectiVe Direct
SellinG comPany
AL International is dedicated to bringing
people the finest array of nutrition and life-
style-related services to enrich lives and help
people Live Younger, Longer! The Company
has provided health-conscious consum-
ers and independent business owners with
innovative lifestyle solutions since 1997.
The Company continues to grow its
unique product line by continuously launch-
ing new and innovative products. One of the
newest items launched through direct selling
is called Root Beer Belly, a probiotic supple-
ment, which has already shown great inter-
est from Youngevity consumers and is sure
to add to AL Internationals sales for 2013.
On the traditional marketing side of the
business, CLR Roasters recently inked a deal
with Norwegian Cruise Lines that will begin
generating revenues in the first half of 2013.
AL International is committed to grow-
ing aggressively through direct selling, tra-
ditional marketing, mergers and acquisi-
tions, and organic growth. The Companys
direct sales model and international roll
out strategy is ideally suited to fully lever-
age the significant upside potential in high
growth emerging markets. AL International
is dedicated to improving lifestyles through
its unique nutritional and healthy lifestyle
solutions that enhance the quality of life of
each customer and help people achieve their
health and wellness goals.
hiGhliGhtS anD key
FeatureS
AL International is now well past the
half-way mark of becoming a $150 million
annual revenue company by 2014.
International Markets represent the
greatest future opportunity. Currently only
7% of sales revenue is derived from outside
the United States.
The senior management team behind
AL International commands decades of
experience in the core components of the
firms business model.
The company has completed 10 acquisi-
tions and/or marketing alliances since 2010.
Marilu Henner is the new celebrity
brand ambassador in its effort to continue
promoting active, healthy lifestyles.
Exciting results of a series of clinical
research studies performed by Clemson
University - Institute of Nutraceutical
Research
400-plus unique Health and Wellness
products
Distinguished Medical and Sports
Advisory Board
Well Capitalized and Profitable n
2012TotalofNewFirms:
127firms
2012TotalShuttered:
269firms
2012NetLoss:
142firms
TheratioofNEWformations
vs.BDW'sis47%,andthe
averagenetlosscontinuesat
about12firmspermonth.
NewBDFormations&BDWithdrawalSummary
15Jan2013,asof31December by DAVID ALSUP www.fishbowlstrategies.com
December:8NewFormationsand18Withdrawals.
(Thethree-yearaverageis14NewFormationsand25Closurespermonth.)
This14monthchartshowsthetypesoffirmsadmitted.
2011173Newfirmsvs:317Withdrawals.2010:177Newfirmsvs:325Withdrawals.
==================================================================================================
105equitiestradingfirmsclosedin2012.Thenetlosswas74firms.
This14MonthBDWChartshowsthetypesoffirmsthatareclosing.
Thereare4391FINRAMemberfirmCRDNumbersasofDec31,2012.(Note:TherearesomebankruptfirmsstillcarriedinCRD,such
asLehmanBros,&StanfordGroup.)
The above data has been sourced from regulatory agencies publications' and statistics, along with some independent third parties. While it is believed to be reliable there
can be no guarantee of the accuracy of the data. The numbers have been cross-checked for accuracy, and they should be within plus/minus two percent.

David Alsup david@fishbowlstrategies.com
949-468-0111 A Detailed analysis (or Customized) is available by Subscription.
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Securities Regulatory Counseling since 2005
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www.anslowlaw.com
Anslow + Jaclin serves diverse clients worldwide on
unique and sophisticated securities and corporate matters,
including IPOs, PIPEs, corporate finance, reverse mergers
and M+A. Anslow + Jaclins clients are publicly held
corporations which include well-established and other
business entities across a broad range of industries.
Anslow + Jaclin has consistently been ranked as one of the
top law firms in the United States by SEC New
Registrations Report for the number of pre-effective IPO
registrations advised. In addition, Deal Flow Media, Incs
The Deal Flow Report ranks Anslow + Jaclin as one of the
top Issuers and Investors Legal Counsel for number of
placements advised.

195 Route 9 South, 2
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475 Park Avenue South., New York, NY 10016 Tel 646 588 5195
www.anslowlaw.com
Trouble Is
Opportunity
interest, points, and fees; rather than going
through a costly foreclosure and becoming
an owner of the property.
The next threshold question that must be
answered is, what I call, skin in the game.
Skin in the game refers to the equity
contribution of the borrower towards the
purchase and/or real estate project. For pur-
poses of clarity, all private money loans will
be secured by either a Deed or Mortgage and
should be in the First Priority Lien position,
with equity behind it. The more equity that
is required to be contributed to the project
by the borrower, the safer the real estate
loan. That is because in a properly struc-
tured secured private money loan transac-
tion, 100% of the equity will be lost prior to
any debt being lost. This is reflected in the
Loan to Value Ratio (LTV) of the property
or Loan to Cost Ratio (LTC) (in a develop-
ment project). By way of example, a loan
of $1,000,000.00 at a 50% LTV would have
the borrower contributing $1,000,000.00 in
equity. Skin in the game not only protects
the debt, it also indicates the level of com-
mitment the borrower has to the property. It
is important to point out that when under-
writing a private money real estate deal, you
want to see real dollars put toward the real
n BY jONAThAN hORNIk, ESq.
The fact is, we are still recovering from
the worst economic crisis since the Great
Depression. While values of real estate in
2012 are substantially less than they were
in 2007, the demand for capital is increas-
ing in order to fund real estate transactions
throughout the country. Yet the ability to
get loans from conventional lenders remains
difficult, it creates a tremendous opportunity
for those who want to be in the private/hard
money lending market.
This article will touch a little on what it
takes to be successful in todays private lend-
ing or hard money world. It is important
to note that the private lending world has
changed dramatically since the credit crash
of 2007 and subsequent deep recession that
the United States has suffered. Careful and
meticulous underwriting and due diligence
needs to be performed on each hard money
deal being considered for a loan.
Lets begin by underwriting a private loan
transaction. There are threshold questions
that must be answered before one is to con-
sider moving forward on a private money
transaction. The first is understanding the
borrowers exit strategy. The borrower
must have a realistic vision on how they plan
on repaying the lender. Will they sell out
the property if its a construction project,
or bulk sale multiple properties in a col-
lateralized package? Are they hoping for a
refinance from a conventional lender. In
such case, you must have some assurance
the refinance will take place. Those enter-
ing into the private lending business must
understand that you are a lender and not a
real estate owner of property. This under-
standing is important as your intention is
always, for each loan, to be repaid with
2013
appears to be beginning the same way 2012 ended. A divided President
and Congress fighting about going over a Fiscal Cliff and raising our
countrys debt ceilings. An uncertain economy. Conventional lenders unwilling to provide
credit to fund real estate acquisitions and projects because of the economic uncertainty.
estate (which increases the value of the real
estate as opposed to soft costs (which are
paid to professionals and do not increase the
value of the real estate). Be wary of those
borrowers that do not want to contribute
equity to their own project.
The ability for any lender to lend against
real estate depends on the lenders permis-
sible LTV and LTC as discussed above. The
various types of Real Estate types carry
various risks. Types range from residen-
tial to commercial to industrial properties.
The below matrix gives some indication of
market LTVs for specific types of real estate
assets. As a general rule, the less risky the
real estate, (i.e., the less suspect the value of
the real estate), the higher the LTV the lender
is typically willing to go to in order to close
any loan transaction.
As a general rule, lenders should never
take uninsurable risk. Therefore, a full
review of Title, Survey, and Environmental
on the real estate that will be collateral for
the loan must be performed. Purchasing
a Title Policy to insure that the lender has
a First Priority Lien with nobody ahead
of the lender, will protect the lien priority
of the loan. An environmental review of
the real estate is strongly recommended, as
an environmentally contaminated property,
requiring costly remediation, can substan-
tially impact the value of the property and
the yield on the investment. It is important
to note that one must not only do desk
underwriting, but also must visit each and
every real estate property that is the subject
of a loan. Everybody in the private lending
business has too many stories indicating how
potential borrowers have misrepresented the
condition of a property that can only be dis-
covered by a property visit.
Careful Pricing is another aspect of private
lending that needs to be fully understood.
Pricing usually consists of a combination
of interest rate, points and fees paid at the
closing. The pricing matrix for private loans
is directly impacted by the LTV and any
other circumstance which in the analysis
of the underwriter would make the loan
more risky. This could include the risk of
approvals not being in place, infrastructure
and other similar issues which may impact
the viability of any real estate project , bor-
rowers background and past experience.
Pricing on private loans can range from 8%
to 14% interest and 1 to 10 plus points. As
you can see by the range of pricing, being in
the private lending business can be lucrative
to say the least.
Should you have any questions regarding
this article or to acquire further information
about the private lending business, please do
not hesitate to contact me at my law firm at
732-409-1144.
Jonathan Hornik is a founding partner in the law
firm of LaRocca Hornik Rosen Greenberg & Blaha
(LHRG&B) where he serves as co-chair of the Real
Estate and Finance Department. His practice con-
centrates in the financing, investment and acquisi-
tion and generation of mortgages, mortgage pools
and other real estate and commercial transactions.
Mr. Hornik has successfully handled many significant
financing, real estate and other corporate transac-
tions over his career. He has advised his clients in
all aspects of transactional real estate and corpo-
rate matters, including, private placement memo-
randums, subscription agreements, limited liability
companies, the acquisition and disposition of prop-
erties, businesses and other assets, operation and
financing of projects, stock and asset purchases,
institutional investments, credit facilities, joint ven-
tures, partnerships, commercial lending and leasing.
Jon has developed a specific expertise in workouts
and the restructuring of loan transactions, frequently
advising clients on the restructuring and disposition
of loans and distressed real estate in and out of the
foreclosure process. Prior to joining LHRG&B as
partner, Mr. Hornik was Vice President and General
Counsel of one of the nations largest direct private
lenders. Mr. Hornik is an acknowledged expert in
deal structuring and negotiation.
Mr. Hornik has been admitted to the Bar in New
York and New Jersey. LHRG&B is a business oriented
full service Wall Street law firm with offices in New
York and New Jersey.
Mr. Hornik is also serving his second term as
Mayor of the Township of Marlboro, New Jersey. n
TroubleisOpportunity
2
tocommercialtoindustrialproperties.ThebelowmatrixgivessomeindicationofmarketLTVsfor
specifictypesofrealestateassets.Asageneralrule,thelessriskytherealestate,(i.e.,thelesssuspect
thevalueoftherealestate),thehighertheLTVthelenderistypicallywillingtogotoinordertoclose
anyloantransaction.
Asageneralrule,lendersshouldnevertakeuninsurablerisk.Therefore,afullreviewofTitle,Survey,
andEnvironmentalontherealestatethatwillbecollateralfortheloanmustbeperformed.
PurchasingaTitlePolicytoinsurethatthelenderhasaFirstPriorityLienwithnobodyaheadofthe
lender,willprotectthelienpriorityoftheloan.Anenvironmentalreviewoftherealestateisstrongly
recommended,asanenvironmentallycontaminatedproperty,requiringcostlyremediation,can
substantiallyimpactthevalueofthepropertyandtheyieldontheinvestment.Itisimportanttonote
thatonemustnotonlydodeskunderwriting,butalsomustvisiteachandeveryrealestateproperty
thatisthesubjectofaloan.Everybodyintheprivatelendingbusinesshastoomanystoriesindicating
howpotentialborrowershavemisrepresentedtheconditionofapropertythatcanonlybediscovered
byapropertyvisit.
CarefulPricingisanotheraspectofprivatelendingthatneedstobefullyunderstood.Pricingusually
consistsofacombinationofinterestrate,pointsandfeespaidattheclosing.Thepricingmatrixfor
privateloansisdirectlyimpactedbytheLTVandanyothercircumstancewhichintheanalysisofthe
underwriterwouldmaketheloanmorerisky.Thiscouldincludetheriskofapprovalsnotbeinginplace,
infrastructureandothersimilarissueswhichmayimpacttheviabilityofanyrealestateproject,
borrowersbackgroundandpastexperience.Pricingonprivateloanscanrangefrom8%to14%interest
and1to10pluspoints.Asyoucanseebytherangeofpricing,beingintheprivatelendingbusinesscan
belucrativetosaytheleast.
Shouldyouhaveanyquestionsregardingthisarticleortoacquirefurtherinformationabouttheprivate
lendingbusiness,pleasedonothesitatetocontactmeatmylawfirmat732-409-1144.
JonathanL.Hornik
TypeofRealPropertySecuringLoan LoantoValueRatio
(asis)
LoantoValueRatio
(asimproved)
Non-owner-OccupiedSingleFamily
Residential
60% 80%
Commercial,industrial,orRental
Property
60% 70%
UnimprovedLand 50% 70%
n BY GREG BOWES
What I Learned
About Graphite
2. For commodities that China imports,
such as iron ore and coal, its policy is to over
stimulate new supply from the rest of the
world to a point where there is excess capac-
ity and low prices. For commodities where it
is the dominant producer, such as REEs and
graphite, China is consolidating very inef-
ficient, fragmented industries, improving
labor and environmental standards, curtail-
ing illegal mining and moving toward more
professional management of its resources.
China does not want to sell scarce resources
cheaply to the rest of the world as it has done
for years, especially while incurring a huge
environmental cost to do so. In graphite we
have seen export duties, the formation of
an amorphous graphite monopoly that will
reduce the number of mines from 210 to 20
and serious restrictions on new and existing
mines and processing plants. This trend will
continue and new graphite mines outside of
China are needed.
3. Graphite prices flat lined for over 15 years
due to excess production capacity in China
and economic cycles had little effect. After
that excess capacity was used up, prices
more than tripled due to growth in emerg-
ing economies. However, it also meant that
graphite prices are now subject to economic
cycles and slower growth in China has since
resulted in them falling by about a third. So
graphite is now a bet on a recovery but it is a
good bet as no new mines were built during
the last cycle. The supply problem will be
more acute in the next cycle.
I
n 2008 Gregory Bowes became a direc-
tor of the predecessor of Northern
Graphite Corporation (NGC:TSXV,
NGPHF:OTCBB) and in 2009 became the
CEO. At the time, graphite was a sleepy indus-
trial mineral that no one new anything about.
Like REEs and Lithium, everyone has had to
get up the learning curve including Greg who
probably did more than anyone to publicize the
graphite story. Now there are over 60 companies
but he remains one of the most credible sources
in the industry and NGC is widely regarded
as the leading company. It is the only graphite
company to have completed a bankable fea-
sibility study and is in the advanced stages of
permitting. NGC has a large flake, high purity,
scalable deposit that is located in Canada, close
to infrastructure, and has very competitive
operating costs. We asked Greg to share some of
what he has learned in the last four years.
1. Well, a major difference is that with
base and precious metals everyone gets the
same price. In industrial minerals prices
vary greatly according quality. With graph-
ite, prices are a function of flake size and
purity (carbon content of the concentrates).
Graphite deposits can contain little or no
battery grade material. Or, a very large
percentage of the graphite may be low
purity, micro-flake with no commercial
value or at the very least, serious marketing
challenges. Impurities can also affect mar-
ketability. Grade is always important but
with industrial minerals, metallurgy is often
more important.
4. When gold, copper and other metals first
broke out of historical trends, everyone was
concerned about where the new price bot-
tom would be in an economic downturn.
The same is true of graphite prices which are
in uncharted territory. However, it appears
the bottom has been reached as prices have
stabilized and may even be edging upward.
We are close to the marginal cost of Chinese
production when export duties, VAT and
transportation costs are factored in.
5. While there are over 60 public graph-
ite companies, there are very few serious
development stage stories that can come on
line in the next three or four years. This is
enough to meet growing industrial and bat-
tery demand and replace aging production.
There have been some very interesting new
discoveries but still a lot of questions to be
answered on metallurgy and infrastructure.
Greenfield projects typically take 5-10 years
get into production and that is in a best case
scenario.
6. Our Bissett Creek deposit will produce
about 20,000 tonnes of graphite per year
for 23 years based on probable reserves
only. We have another 50 years of inferred
resources and the deposit is open on surface
and down dip so it could conceivably pro-
duce in excess of 50,000 tonnes per year. A
couple new discoveries have over 100 million
tonnes of resources and could also produce
at this level or higher. However, it would be
suicide to bring on a mine at this rate as the
market could not absorb the production and
prices would crash. So in effect, size does
not matter. Large deposits cant really take
advantage of economies of scale. Being first
to market is much more important. This
will enable us to establish our markets and
our customer base and expand as the market
grows. It is much easier to expand a mine
that is located close to infrastructure in a
favorable jurisdiction than it is to build a
new mine in a third world country. These
big, new projects really require the EV mar-
ket to take off which could very well happen.
7. The rise in graphite prices was really
the result of the ongoing industrialization
of emerging economies and its affect on
traditional steel and automotive markets
which are still the most important ones for
graphite. However, much of the interest in
graphite is the result of lithium ion batteries
and their use in EVs and HEVs. Both the
US and China have set a goal of one million
EVs on the roads by 2015. One million EVs
will need about 80,000 tonnes of graphite
or approximately 15% of the current flake
graphite market. If EVs gain only one per
cent of the new car market and HEVs 5%, it
would require 286,000 tonnes of graphite to
make the batteries. This is almost half the
current market. Clearly, EV/HEVs will have
a substantial effect on the graphite market
even if they are only modestly successful.
8. Graphite is not dependent on lithium
ion batteries for future success. In addition
to growing industrial demand, applications
such as fuel cells, vanadium redox batteries
and pebble bed nuclear reactors are all big
graphite users and will find increasing com-
mercial traction.
9. Graphene is also bringing a lot of atten-
tion to the graphite space. There is still a lot
of work to be done, especially to develop a
commercial process to economically make
graphene in scale and it remains to be seen
how much it will affect graphite demand in
the foreseeable future. If a 1mm thick flake
of graphite contains three million layers of
graphene, then a few tonnes of graphite are
enough to make a blanket that would cover
New York city.
10. Graphite is a wonder material with very
many attractive qualities. As reliable, high
quality sources are developed outside of
China it will attract many new uses.
Gregory Bowes, B.Sc. (Geology), MBA has over 30
years of experience in the resource and engineering
industries. He holds an MBA from Queens University
and an Honours B.Sc., Geology degree from the
University of Waterloo. Mr. Bowes was previously
Senior Vice President of Orezone Gold Corporation
(ORE:TSX) and President and CEO of San Anton
Resource Corporation. n
The rise in graphite prices was really the
result of the ongoing industrialization of
emerging economies and its affect on tradi-
tional steel and automotive markets which
are still the most important ones for graphite.
The Evolving Direct Public
Offering Market Shows Promise
for Early Stage Companies
lenges for the DPO company was where to
take the deal.
While investment banks, venture capitalists
and investment professionals possess respec-
tive abilities to syndicate a transaction, and
move clients through the going to market
process with roadshows, presentations and
related ballyhoo, companies going it alone via
DPO had to knock on the doors of prospec-
tive investors that presided in their own, much
smaller database. Or, still worse, cold call.
And while investment banks, venture capi-
talists and investment professionals also bring
investment packaging resources, assisting
companies in tightening up the pitch, refining
the business plan and clients value proposi-
tion, companies going it alone via DPO have
to just do their best to fine-tune their presenta-
tions and pitches.
It isnt hard to see why the DPO market
hasnt been grabbing much attention histori-
cally.
But the really good news for smaller,
off-the-wall-street radar companies is the
emergence of a couple key trends that are
changing the game:
Enabling technologies and social net-
working trends are democratizing the early
stage investment landscape, creating greater
The environment for raising capital is
extremely tough,
Investors are more risk averse than ever,
Your deal is too small to attract an invest-
ment banking firm,
It is extremely difficult finding an invest-
ment banker willing to engage without sig-
nificant up-front fees, or
If you are trying to attract VC inter-
est, for every 100 plans submitted, 10 get
reviewed and only 1 is funded.
These points are all true - and depressing.
Especially when you consider the fact that
there are more than 27 million small busi-
nesses in the United States and it is probably
safe to assume that on any given day, at least
a few million of them are thinking about
how to access third party capital.
The good news for small businesses,
whether they are not getting VC or invest-
ment banking attention because they are
too small, too immature, too Main
Street, or doesnt measure up on some
other measure, is that there is a tried and
tested way to do it yourself.
To be sure, self-underwritten offerings, or
direct-public offerings (DPOs) have been
around for years. But the process was not
exactly efficient. One of the primary chal-
I
f you are a small or development stage business and are planning to raise
capital, chances are pretty good that you have either heard one, or a com-
bination of the following cautionary statements:
n BY ThOMAS CARTER
B of I Holding, Inc.
NASDAQ: BOFI
BofI Holding, Inc. is the holding company for BofI Federal
Bank, a nationwide branchless bank that provides nancing
for single and multifamily residential properties, small-to-
medium size businesses in target sectors, and selected
specialty nance receivables. With over $2.8 billion in assets,
BofI Federal Bank provides consumer and business banking
products through its low-cost distribution channels and
anity partners.
www.boholding.com
The Worlds Largest Independent Investor Relations Firm
New York Chicago San Diego Atlanta Vancouver So Paulo
Hong Kong Beijing Shanghai Mumbai Perth Sydney Taipei
www.mzgroup.us
For more information, please contact us at info@mzgroup.us or call 212-301-7130
Miller Energy Resources
NYSE: MILL
Miller Energy Resources, Inc. is an oil and natural gas explora-
tion, production and drilling company operating in multiple
exploration and production basins in North America. Miller's
focus is in Cook Inlet, Alaska and in the heart of Tennessee's
Appalachian Basin including the Mississippian Lime and the
Chattanooga Shale. Miller is headquartered in Knoxville,
Tennessee with oces in Anchorage, Alaska and Huntsville,
Tennessee.
www.millerenergyresources.com
ENSERVCO Corporation
OTCQB: ENSV
ENSERVCO through its various operating subsidiaries, has
emerged as one of the energy service industry's leading
providers of hot oiling, acidizing, frac heating and uid
management services. The Company owns and operates a
eet of more than 245 specialized trucks, trailers, frac tanks
and related well-site equipment. ENSERVCO operates in
Colorado, Kansas, Montana, New Mexico, North Dakota,
Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West
Virginia.
www.enservco.com
Stellar Biotechnologies
OTCQB: SBOTF
Stellar Biotechnologies, Inc. is the world leader in sustainable
manufacture of Keyhole Limpet Hemocyanin (KLH). KLH is
an important immune-stimulating protein used in wide-
ranging therapeutic and diagnostic markets. Potent, yet
proven safe in humans, KLH operates as both a vital compo-
nent for conjugate vaccines (targeting cancer, autoimmune,
and infectious diseases) as well as an antigen for measuring
immune status.
www.stellarbiotechnologies.com
C
M
Y
CM
MY
CY
CMY
K
MicroCap Magazine Ad v3.pdf 1 2/14/2013 10:09:43 AM
awareness of small and development stage
companies seeking capital and greater par-
ticipation; and
Regulatory developments are creating
pressure on the SEC to update pre-Internet
rules for companies raising capital.
the emerGence oF Social
networkS, Social inVeStinG
anD eQuity marketPlaceS
Technology is enabling the emergence of
online platforms for investors to learn about
investment opportunities, more efficiently
vet deals and pitches, and to gain access to
other informed investor opinions as part
of a community. These emerging platforms
will enable small and early stage companies
in the DPO process to more efficiently and
effectively market their value proposition to
prospective and better informed investors.
Technology will enable average investors
to compete with institutions. Historically,
information about issuers was accessible
only to investment banking patrons. The
DPO community platform will enable Joe
and Jane Six-pack to access issuer infor-
mation like never before - at the tip of the
browser - and being able to process that
information in a community setting, with
discussion and input from other investors,
can be far more valuable than the feedback
of a broker and a static research report.
In addition, an important consequence
of the more successful, higher-trafficked,
online DPO sites will be that companies will
be able to better plan for a secondary market
- which has historically been a shortcoming
of the DPO process. More investors will be
aware of the DPO companies story, and
more likely to participate in the business as
an investor in a post-effective registration
statement world.
Small buSineSSeS matter
- they neeD caPital - anD
conGreSS GetS it
According to the SBA, small businesses rep-
resent 99.7% of all employer firms, employ
half of all private sector employees, pay 44%
of total U.S. payroll, generate 65% of net
new jobs over the past 17 years, and drive
more than half of nonfarm private GDP.
They matter.
However, the fact is that most small busi-
nesses fail. The SBA reports that while the
estimated 552,600 new employer firms
which opened for business in 2009, 660,900
firms closed (average an turnover of about
10%). Seven out of ten new employer firms
survive at least 2 hears, five out of 10 at least
5 years and slightly more than three out of
ten survive at least 10years. One of the pri-
mary causes is lack of sufficient and ready
access to capital.
In response to this state of affairs, Congress
passed the Jumpstart Our Business Startups
Act (JOBS Act).
The JOBS Act is generally anticipated to
be a prospective game-changer for small
businesses seeking capital, describing a spe-
cific framework (equity-based crowdfund-
ing) which will enable companies to solicit
smaller financings online, through funding
portals. The idea is, that if crowdfunding
takes off, small businesses will have access to
capital that historically has been either non-
existent or prohibitively expensive.
Chances are, however, that the crowd-
funding market will likely develop at a pace
much slower than the JOBS Act legislators
and its advocates want, as the Securities and
Exchange Commission still needs to finalize
the rules, and participants will still need to
get comfortable with those rules and confi-
dent in the crowdfunding process.
DPOs, on the other hand, are better
understood and the rules are clearly defined.
Unlike proposed rules for equity crowdfund-
ing, DPOs allow companies to raise more
than $1 million and in certain cases (SCOR
and California 25102(n) exemptions) adver-
tise the offering, selling stock directly to the
public without the registration and report-
ing requirements of a conventional IPO and
without the higher costs.
While the JOBS Act is ostensibly legisla-
tion geared to crowdfunding, not DPOs, its
being passed into law is in itself a major shift
in regulatory acknowledgement that small
businesses need better and more efficient
access to investment capital and acknowl-
edgement that the status quo is not accept-
able. We think that a byproduct of this
shift in mindset will only benefit companies
undertaking the DPO process going forward.
In fact, under the proposed rules of the
JOBS Act, in August, the SEC proposed the
elimination of the prohibition against gen-
eral solicitation and general advertising to
offer securities under Rule 506 of Regulation
D of the Securities Act and Rule 144A of the
Securities Act.
At Equity Round Services Co., we believe
that with an improving regulatory trend
to promote transactions to accredited and
institutional investors in an online environ-
ment where the social networking technolo-
gies are enabling a more transparent, effi-
cient and informed marketplace, the outlook
for the DPO financing structure has never
been better.
Our focus is to work with small and early
stage companies, helping them structure and
position their businesses to more efficiently
accept capital (equity and debt), providing
them with an experienced team and deep
set of financial and operational resources at
outsourced economics, and access to a broad
pool of qualified and actionable investors, is
an immense one. n

Once Cash was King,
n
Over 45,000 US and Global Media Outlets
n
23 Online Video Social Networks
n
Reach Targeted Individual and Institutional Investors
Financial Advisors
Fund Managers
CEOs/Companies
Phone: 213/706-3000
snn is tHe King
OF distribUtiOn
I NSURANCE CORNER
Micro-Cap Company Insurance
impairment of all underlying insurers, claim
denial due to a materially false warranty made
by any person or organization (other than the
insured person), or if all underlying insurance
is rescinded.
Why consider a PDL policy? If youre a
Director or Officer of any company, its defi-
nitely worthwhile to consider this type of
program, especially if you have assets worth
protecting. Here are few of the common
scenarios that a D and O can encounter with
their traditional D&O policy:
Ds and Os run the risk that large claim(s)
settlements can exhaust D&O limits
Entity or individual directors can erode
coverage protection for Ds and Os
D&O program can be tied up in bank-
ruptcy estates and defense costs may not be
provided for many years (i.e. a U. S. bank-
ruptcy court has ruled that all underlying
insurance and its proceeds are assets of a
bankruptcy estate and unavailable to pay any
covered loss)
The D&O policies can be rescinded by the
carrier for various causes
Poorly structured severability provisions
can expose innocent directors
common inSurance
miStakeS:
When providing insurance reviews, I often
find that a great deal of time was spent on
D&O insurance, but very little time was
spent on the other coverages. If not struc-
tured properly, these other coverages may
not respond to a claim, which can have a
significant impact on the companys balance
sheet, income, and if severe enough, can even
result in bankruptcy. Carriers are unforgiv-
ing when it comes to using the fine print in
their policies to disclaim coverage. Someone
needs to make sure that you have the right
M
ost articles written about the
insurance needs for Micro-Cap
companies focus on changes cre-
ated by The Sarbanes-Oxley Act of 2002, the
resulting additional responsibilities and the
shift in corporate protective measures. This
column, however, aims to inform C Suite
executive officers, company board members,
and shareholders regarding important and
often overlooked insurance aspects of corpo-
rate well being and financial protection. I will
be highlighting important insurance prod-
ucts, going over some common mistakes, pro-
viding general insurance strategies, and also
offering some dos and donts of coverage.
Directors & Officers (D&O) insurance is
purchased to protect personal assets of direc-
tors and officers as well as to protect the assets
of the firm. It serves to provide reimburse-
ment to the organization, to indemnify Ds
and Os for their losses, and to help the firm
monitor and provide defense costs associated
with responding to lawsuits or investigations.
The basic D&O policy includes coverage
for the entity as well as the Ds and Os on an
aggregate basis, but can leave the Ds and Os
exposed should the entity use up the limits of
liability and not have the means to indemnify
the Ds & Os for their defense and indemnity
expense. A popular D&O derivative product
is Side A DIC policy. This is basically the
same D&O coverage, except it only applies to
Ds and Os (no entity) and is non-rescindable
n BY EUGENE B. PODOkShIk
by the carrier. Many SMEs and Micro-Caps
already purchase this type of a program,
however, Id like to introduce another D&O
derivative product, the Personal Directors
Liability Insurance (PDL).
ProDuct hiGhliGht-
PerSonal DirectorS
liability inSurance (PDl)
PDL is essentially an individual personal
liability policy for independent directors serv-
ing on one or more boards. Its unique as the
limits are not shared with other directors or
with the organization and the policy can be
tailored for the individual to cover one, all, or
any combination of boards a director serves
on. Insured directorships can be with pub-
licly traded, privately owned, or not-for-profit
organizations.
This policy is an excess policy over any
other D&O coverage that may be available
containing drop-down and limited differ-
ence-in-conditions (DIC) features. In other
words, PDL activates when indemnification is
not available from any source, and losses are
in excess of other D&O liability insurance, or
losses are not paid by underlying D&O liabil-
ity insurance and certain drop down or DIC
features of the policy are triggered. Limits
available are generally up to $10 million.
Some positive features of PDL policy are:
No deductible
Freedom to choose defense counsel with
carriers consent
Spousal coverage included
Bilateral extended reporting period
Dedicated PDL claims professionals are
available to guide insureds through the claims
process even if the policy is not triggered.
PDL responds as primary Insuring Clause
1 coverage if a loss is not paid under the
underlying insurance because of financial
coverages, and that they are written correctly
from a technical standpoint. Take a look at
your insurance program to see if you can find
some of these common insurance mistakes.
Missing names on the named insured
schedule
Missing locations
Limits are too low (building, contents,
liability)
No flood or earthquake insurance, no
utility service interruption coverage
Insufficient business income
No hired/non-owned liability coverage
Improper classifications / Exclusions for
your business activity
Professional liability definition of your
services is too narrow or incorrect
Your broker, or a lower level employee
completed your insurance application
The excess policy does not follow from the
primary or underlying policies
You didnt purchase the proper cover-
age -you can see a listing of common cover-
ages purchased by Micro-Cap companies
here www.ffbinsurance.com/microcap
General inSurance
Procurement aDVice:
Here are some of the generic takeaways
that might be of benefit to know relating to
insurance procurement.
If your insurance premiums are over
$200,000, ask your broker to net out their
commission and instead negotiate a service
fee with them.
The name of the game is to be prepared.
You need to dedicate a professional to be
responsible for risk (insurance) manage-
ment. For most Micro-Cap companies, this
falls on the shoulders of the CFO. Whoever
it is, please make sure that adequate time
is spent on exposure review and analysis.
Hire a consultant or engage your insurance
broker to perform this service if you can-
not dedicate the time or do not possess the
expertise. Your broker relies on the informa-
tion you give him/her, and your insurance
carrier can use the submitted application to
deny coverage if they find misrepresentation.
Engage an insurance broker who can
provide risk management services and act as
an extension of your firm, rather than just be
an insurance vendor.
No matter how solid your relationship
is with your insurance provider, we rec-
ommend that you engage a third party to
check your program at least once every
three years. There may be significant gaps
in your insurance program and you may
not be utilizing the optimal risk transfer
structure for your operations. Reviews can
be confidential.
Meet your underwriter. If theres a claim,
you want to know the underwriter person-
ally. He/she is the only one (other than your
attorney and broker) that can go to bat for
you when you have a questionable claim.
Understand your indemnification rela-
tionship with your company.
Read and understand your policy. Well,
that actually may not be realistic, the under-
standing that is. It is better to hire an attor-
ney who is familiar with insurance policies
and have them liaison with your broker to
secure the appropriate coverages. This addi-
tional expense will be a tiny fraction of the
premiums you pay, but you will be in a better
position when the claim does arrive. If you
dont want to rely on your corporate counsel
who may not have this expertise and need a
recommendation, please contact us, we have
put together a panel of various insurance
attorneys.
FirSt FiDelity inSurance
rate ProjectionS For 2013:
Below is a general guide to what is expected to
take place in commercial insurance in 2013.
The actual rates will depend on the specific
exposure changes, carrier appetite changes,
carrier rate increase mandates, loss history
of the insured, class of business, and many
other factors.
I hope this information was useful. Until
next time.
about FirSt FiDelity
brokeraGe:
Founded in 1994, First Fidelity Brokerage is
a leading international property and casualty
insurance broker. First Fidelity developed and
administrates several special insurance prod-
ucts, including insurance programs for Micro-
Cap companies. Headquartered in New York
City, First Fidelity differentiates itself by pro-
viding insurance procurement and advocacy
services using experienced legal professionals.
The addition of legal expertise in insurance
procurement is what FFB refers to as The
game changer in insurance procurement.
This service model untimely leads to better
protection and less claim denials.
For more information on First Fidelity
Brokerage, please visit www.ffbinsurance.com.
bioGraPhy
Eugene B. Podokshik, CPCU, CRIS, an insurance cover-
age technician, is the Principal & CEO of First Fidelity
Brokerage, a specialty commercial insurance broker pro-
viding insurance risk transfer solutions to SMEs &
Micro-Cap companies. Mr. Podokshik has worked in
insurance product development and in various positions
servicing middle market and national accounts (ranging
from privately held companies to large publically traded
investment banks) most recently as an EVP for a national
insurance broker where he led insurance due diligence,
program placement and portfolio aggregation programs
(domestic and international) for private equity firms.
Eugene graduated from NYU with a BS in Economics
and a BA in Political Science, and holds the CPCU and
the CRIS insurance designations. He also serves as Board
President of CIDNY-ILS, a New York City not-for-profit
Home Care Agency with nearly 700 employees, and
is Treasurer of the Brighton Ballet Theater, one of the
nations largest childrens ballet schools.
If you have any questions for Eugene Podokshik, he can
be reached at (212) 933-9050 x1801 or via email epod@
ffbinsurance.com. Mention MicroCap Review magazine
to have First Fidelitys fees waived when engaging them for
a basic insurance review and rate comparison. n
needarecommendation,pleasecontactus,wehaveputtogetherapanelofvariousinsurance
attorneys.
FirstFidelityinsurancerateprojectionsfor2013:
Belowisageneralguidetowhatisexpectedtotakeplaceincommercialinsurancein2013.Theactual
rateswilldependonthespecificexposurechanges,carrierappetitechanges,carrierrateincrease
mandates,losshistoryoftheinsured,classofbusiness,andmanyotherfactors.
Coverage* %Increase
Property 7%to12%
Casualty 2%to8%
ExcessLiability 3%to12%
WorkersCompensation 3%to15%
Directors&Officers 5%to10%
Errors&Omissions 4%to6%
EmploymentPractices 3%to12%
EmployeeBenefits 3%to10%
*Assumesgoodlossexperience.
Ihopethisinformationwasuseful.Untilnexttime.
AboutFirstFidelityBrokerage:
Foundedin1994,FirstFidelityBrokerageisaleadinginternationalpropertyandcasualtyinsurance
broker.FirstFidelitydevelopedandadministratesseveralspecialinsuranceproducts,including
insuranceprogramsforMicro-Capcompanies.HeadquarteredinNewYorkCity,FirstFidelity
differentiatesitselfbyprovidinginsuranceprocurementandadvocacyservicesusingexperiencedlegal
professionals.TheadditionoflegalexpertiseininsuranceprocurementiswhatFFBreferstoasThe
gamechangerininsuranceprocurement.Thisservicemodeluntimelyleadstobetterprotectionand
lessclaimdenials.
FormoreinformationonFirstFidelityBrokerage,pleasevisitwww.ffbinsurance.com.
Biography
control. Whether as a young adult or as a
senior, this profound sense of loss prevents
closure and transition into the next stage of
life, fully and completely. This basic principle
of human development teaches us that no
task is ever truly completed or every really
comes to closure.
After having worked as a Rabbi and coun-
selor for over fifty years, I am conscious of all
those tasks in my life that I finished but was
never really completed, because in some way
I resisted letting them go so I could move on.
At the same time, as I resist loss and anxiety, I
embrace the moment looking forward to the
new possibilities of what the new stage in my
life, the new tasks, and the opportunity for
new growth is presented to me. It is so free-
ing to open the door onto pathways untrav-
eled. I feel so good about them, because all
the prior years have prepared me for what
is next. Even though I feel excitement and
hope, there is that part of me that is anxious
and frightened that I will not be able to do
what is expected of me and more than that,
what I expect of myself.
Do you ever find yourself replaying old
conversations, confrontations, presenta-
Closure
For each of us, leaving a stage in life in
which we have become both comfortable
and competent engenders a profound sense
of loss because the hard won competence
brought a feeling of wellbeing. It added to
our emerging identities, a sense of ourselves,
as more fully developed and able to cope
with, compete with and develop our own
place in the world. It is sad to let go off
such feelings. It also produces an anxiety of
helplessness because the next stage comes to
us whether we want it or not. Having passed
myself from adulthood into becoming a
senior it produces all of the same kinds of
emotional responses that I had as a child
moving from childhood into adolescence. I
dont like to give up the strength and agil-
ity of my physical life. I worry about my
capacity to compete in a world where youth,
energy and potential are stressed over older
age, wisdom, knowledge, and experience.
When I look in the mirror I do not see me,
but, my father and/or my mother. The agil-
ity of my mind is becoming filled with those
senior moments, where my consciousness
has become sluggish. This is the change that
happens naturally, organically and out of my
n BY RABBI STEPhEN ROBBINS
J
ust as many people have trouble beginning a new project,
or task, so do people frequently have trouble with ending
the same, or bringing closure. In developmental psychology, in
the works of Erikson and Piaget, as well as the neuropsycholo-
gists, who focus on attachment theory, from the time of earliest
childhood we have trouble moving from stage to stage in human
development.
2013 Conference
February 19-20
Georgia Tech Global Learning Center
Atlanta, GA
Register Now!
www.semda.net
Feat ur ed Speaker s
Pat Mackin
SVP & President of the
Cardiac Rhythm Disease
Management Division
Medtronic Corporation
Jon Ellenthal
President, TEDMED
Mir Imram
Chairman & CEO
InCube Labs
Managing Director
InCube Ventures
Mark Leahey
President & CEO
Medical Device
Manufacturers
Association
(MDMA)
Jeffrey Shuren,
M.D., J.D.
Director of the
Center for Devices
and Radiological
Health, FDA
The SEMDA annual conference is the premier gathering of
the Southeast medical device and MDDS industries, offering
company presentations to investors; informative programs
and speakers; partnering; and networking opportunities.
Heres why you should attend:
u Grow your medical device or MDDS company
u Make meaningful connections with leaders among the
investor and business community
u Company presentations from existing and emerging
medical device companies to investors and industry
executives
u Programming to meet the needs of entrepreneurs,
startups and established companies
u Free 1:1 partnering lets you schedule meetings at the
conference and connect before and after the conference
u Gala Dinner on February 19th to celebrate the medical
device industry and recognize SEMDA SpotLight winners
u Poster session highlighting early stage medical device
developments
2013 Conference
February 19-20
Georgia Tech Global Learning Center
Atlanta, GA
Register Now!
www.semda.net
Feat ur ed Speaker s
Pat Mackin
SVP & President of the
Cardiac Rhythm Disease
Management Division
Medtronic Corporation
Jon Ellenthal
President, TEDMED
Mir Imram
Chairman & CEO
InCube Labs
Managing Director
InCube Ventures
Mark Leahey
President & CEO
Medical Device
Manufacturers
Association
(MDMA)
Jeffrey Shuren,
M.D., J.D.
Director of the
Center for Devices
and Radiological
Health, FDA
The SEMDA annual conference is the premier gathering of
the Southeast medical device and MDDS industries, offering
company presentations to investors; informative programs
and speakers; partnering; and networking opportunities.
Heres why you should attend:
u Grow your medical device or MDDS company
u Make meaningful connections with leaders among the
investor and business community
u Company presentations from existing and emerging
medical device companies to investors and industry
executives
u Programming to meet the needs of entrepreneurs,
startups and established companies
u Free 1:1 partnering lets you schedule meetings at the
conference and connect before and after the conference
u Gala Dinner on February 19th to celebrate the medical
device industry and recognize SEMDA SpotLight winners
u Poster session highlighting early stage medical device
developments
tions etc because you were dissatisfied with
the outcome? Those replayed moments of
unfullfillment, are part of the fundamental
mind chatter of worry/anxiety that goes
on in most peoples consciousness. The other
part of that mind chatter is listing of all the
things which are yet undone and need to be
completed. One side of mind chatter keeps
you in the past, the other keeps you in the
future, both of them together keep you out
of the here and now, and therefore, nothing
ever gets completed. In this constant state
of anxiety/worry mind chatter, everything
we do is conditioned by past failures. Most
tasks are never finished because much of the
motivation that drives us is the anxiety of
dissatisfaction. To truly complete anything,
to come to a sense of closure, whether its
at work, in a project, or collegial relations,
whether in friendships, whether in family,
whether in loving or whether in spiritual
moment of insight into meaning and pur-
pose, one must always be in the present
focusing on what is in front of you.
So how does all of this apply to those of
us whose business lives are bound up in
finance, investments and/or micro-cap? First
there is the matter of closing out a year. It
may be a year that we are satisfied with or
even proud. In this case closure can bring a
sense of elation and celebration, which also
frequently is accompanied by the haunting
question, Can I do this again next year? or
is this something that others will continue
to expect of me? The inherent conflict of
emotions in such a scenario are further
complicated by the deeper uniquely personal
issues of loss, separation and anxiety that
each of us experienced as I described above.
Letting go of something successful is usually
very difficult for most people. The new level
of risk/expectation, can raise ones inner
level of self-doubt to intolerable, even panic
laden, standards. Success is a very much
double-edged sword. I remember through-
out my years in college the feeling of turning
in completed work, a paper or a project,
a thesis and/or dissertation, putting all of
that effort into the hands of others to judge
required quite an act of surrender and a
feeling of both satisfaction and helplessness
at the same time. The same is true for any
annual financial reports; year-end summa-
ries and projects which we have to turn over
to investors and our employers engender
the same feelings. In my years of experience,
doing coaching and counseling, relating to
business, companies, divisions, and proj-
ect groups, teams, leadership cadres etc. I
have seen this as a constant threat usually
expressed in those who are perpetually late
in turning their final work or who get work
in at the deadline. Those of us, who work in
a steady way, preparing reports as the infor-
mation becomes available, generally only
have a compilation and editing task at the
end. But those of us, who avoid completion,
usually have one of those classic all nighters
or all weekenders in which there is a furi-
ous panic accompanying the work, which
could have and should have been done in a
timely manor. This completion, avoidance
pattern is reflective of much earlier attach-
ment issues that probably characterize the
individuals life in so many different ways.
There are much salutary and supportive
ways to help people change their work pat-
terns than threats and punishments, which is
probably what they lived with through their
childhood. Shame is always a bad motivator!
On another level, those who struggle with
completion, especially in the closing com-
ments of making summary assessments and
recommendations may be reflecting a much
deeper issue about closure - the issues of
purpose and meaning. The psycho-spiritual
issues of purpose and meaning are not about
the work itself, but rather how the work
makes it possible for the person to find their
purpose in the world and to act meaning-
fully in a way that makes them feel that their
life is more than just a process of survival.
There are those we know who work, espe-
cially in the financial world, are driven by
material concerns. For them financial suc-
cess defines their fulfillment of their purpose
which is to prove their value by demonstrat-
ing it through their wealth and possessions.
There are those who work in the world of
finance who see it as an act of doing service
for their clients. They feel responsible for
the aggregate of their clients as a whole and
for each individual client who they know
and feel a direct responsibility for. For these
individuals finance is only the means of a
greater purpose. The satisfaction comes in
finding meaning in ones inner life through
the service that they provide for others in
caring for their financial well-being. There
are those in the industry who feel that sense
of fulfillment by being of service, but also
understand that the service they provide to
individuals and companies has an impact
on the lives of dozens, hundreds and even
thousands of more people than one can
possibly imagine. These individuals know
that their work is like a pebble dropped in a
pond, the ripple effect intersects with many
more similar choices made by others setting
up either harmonious or dissonant patterns
of financial life in all levels of market places,
from local to international. There are those
who see only the immediacy of a recom-
mendation for investment and there are
those who have the larger vision of impact
of their recommendations and actions on
the financial life of so many. For them there
is a deep moral/ethical imperative to, like the
doctors oath, do no harm, but beyond that
One side of mind chatter keeps you in the past, the other
keeps you in the future, both of them together keep you
out of the here and now, and therefore, nothing ever gets
completed.
like the physician, they know their work can
either heal or wound the people for whom
they work. Such a broad sense of vision and
impact opens for those people the under-
standing of the power they wield to impact
the lives of others who are so dependent on
them. At a higher level, there are those who
embody all the prior, knowing that their
work serves a grander purpose in moving the
world toward prosperity, harmony, growth
and expansion in a moral/ethical climate.
It is not greedy or rapacious. The way they
begin and end their projects either in an
annual or multi-year cycle, do so with all
the levels of purpose and meaning that they
now understand and to which they are com-
mitted. This turns finance and business from
the calculation of facts and risks to the level
of art and intuition driven by the need to live
a purposeful life that provides the greatest
opportunity for well-being for as many as
possible. For these people completion like
the ending of a prayer, it is a great Amen and
an expression of gratitude.
As we have come to the end of 2012 there
is a stark contrast that faces us in the com-
mitment of so many to serve the highest
purposes through their work in the financial
world. Contrasted by the horrible acts of
death and destruction that we see going on,
not in other countries, but in our cities. The
recent massacre in Newtown, Connecticut,
reminds us that there are fundamental ill-
nesses in our economic systems that make
it impossible to care for those with illnesses
mind and spirit who wish to end their lives
in a grizzly orgy of destruction that will leave
their name written across the memory of
families, communities and this nation that
says you may not have paid attention to me
when I was alive but you will never forget
me and my name and how I died, the ones
I massacred are my epitaph. At the heart of
a healthy business community is a caring
for and a protection of those whose anguish
can lead them to such twisted acts of infamy.
Their way is not a way to have closure or
complete a life, it is the way those of us who
get up every day and go to work, taking with
us the portfolio of the highest level of duty,
responsibility, creativity and intuition to
provide the greatest opportunities for those
who are in our care. So is the meaning of
these words, have a happy, healthy and pros-
perous New Year. n

Mr. Sawyer worked at ARCO and The
Superior Oil Company in the field and has
consulted for petroleum giant, Shell Oil
Company, on various field projects. Mr.
Sawyer knows oil field operations, knows
older wells, and knows where to look for
potential new reserves. To that point, Sawyer
directed Lucas Energy, Inc. in 2006, towards
the Austin Chalk properties in Gonzales
County, Texas, which eventually led to Lucas
Energy controlling more than 15,000 acres
of potentially oil rich Eagle Ford properties
in that and adjacent counties southeast of
San Antonio, Texas.
In January 2009, when Mr. Sawyer took
over as President and CEO of Lucas Energy,
Inc. when the Lucas had only 500 sharehold-
ers, average daily trading volume of less
than 20,000 shares per day, approximately
8 million shares outstanding, and an esti-
mated 2 million shares in the float. The
market cap was around $3.5 million, and
the market price range was about $0.40 a
share (about 25% of book value). During
his tenure as CEO, Lucas Energys stock price
reached above $5.00 per share, and during
his administration and through his leader-
ship led the company to greater than $50
million in market capitalization. In addition,
the number of shareholders increased to
PROFI LED COMPANI ES
For Matmown Inc.,
the Future is Now
Matmown management announced recently
that William A. Sawyer, former co-founder
and CEO of Lucas Energy, Inc. will take the
reins as new CEO of Matmown, Inc. Mr.
Sawyer brings his years of experience and
expertise in the area of oil and gas and in
the area of public company management to
Matmown.
Matmown, Inc. and its forward looking founder and Chairman,
Alex Portelli, has made a decision to move the Company into
what should be a bright future as the company has announced
the appointment of a highly recognized and respected new CEO.
In a February 21, 2013 press release:
Matmown announced the appointment of
Mr. William A. Sawyer as its President and
Chief Executive Officer effective on February
19, 2013. Mr. Sawyer brings over 30 years
of diverse experience in the energy industry
with such firms as, ARCO, Houston Oil &
Minerals, and The Superior Oil Company. He
is the former President, CEO and co-founder
of Lucus Energy Inc. Mr. Sawyer has a
Bachelor of Science in Chemical Engineering
from Louisiana State University in 1970 and
his Masters of Business Administration from
Southern Methodist University in 1976.
For a complete copy of the press release in
its entirety visit www.matmown.com
why DiD matmown chooSe
william Sawyer?
Mr. Sawyer represents the right CEO at
the right time for Matmown and provides
the company a CEO with a proven track
record of success. Mr. Sawyer is a petroleum
engineer with more than 35 years of oil and
gas experience. His expertise in the area of
micro-cap public companies and his broad
experience with oil and gas operations is a
perfect match for the position of CEO for
Matmown, According to Alex Portelli.
over 7,000 by 2011 and the daily trading vol-
ume averaged approximately 300,000 shares.
In addition, Mr. Sawyer is a licensed pro-
fessional engineer in the State of Texas and
for more than 10 years acted as a consultant
to the United States Department of Justice.
why DiD william Sawyer
chooSe matmown?
In the words of William Sawyer, the answer
to that question is quite simple, and is in
three parts. Firstly, I have not felt as com-
fortable with anyone as I am with Alex
Portelli, since the formation of Lucas Energy,
Inc. in 2005 when Jim Cerna, and Peter
Grunebaum, and I founded Lucas Energy,
Inc. Secondly, people like Alex Portelli are
rare indeed. They are the type of founders
who look out for the shareholder first and
create companies with solid fundamentals
and growth potential. Mr. Sawyer went on
to say, Thirdly, I am comfortable with the
base of Matmowns current assets, espe-
cially the oil and gas assets. Sawyer added,
The Matmown oil and gas properties are
centered in the upper part of the Austin
Chalk Trend near Giddings Field, in Texas,
with underlying Eagle Ford potential, and
I like the potential for expansion. To that
point, older Austin Chalk wells have been a
specialty of Sawyers which he exploited and
capitalized upon while at Lucas Energy.
Mr. Sawyer further stated, The position
of Matmown today is similar to where my
previous company was in 2009. Matmown
has assets, a good shareholder base, and a
potential upside beyond the current mar-
ket value Sawyer continued, The float is
good, the number of shares outstanding is
adequate, and the potential climate to raise
money for future capital operations is excel-
lent in my opinion.
According to Mr. Sawyer, he had several
substantial companies courting his leader-
ship, or consulting advice at the time he
elected to join Matmown, Inc. Portelli
added, We are impressed with the pre-
cision at which Mr. Sawyer operates and
the planning he puts forth into each step
of corporate development. Considering his
substantial track record of success, we feel
his decision to lead Matmown is one he
would only do with a very strong belief in
Matmowns growth potential.
what iS the Sawyer buSi-
neSS Plan For matmown
lookinG ForwarD?
Considering the expertise of William
Sawyer, he will most probably focus the
forward looking business plan first on the
development of the Matmown oil and gas
assets. His prior efforts concentrated on
converting low producing, and non-produc-
ing assets to cash flowing assets. In the past,
Sawyer has targeted 500 BOPD and 1,000
BOPD of operated production in an effort to
bring revenues up to the range of $3 million
to $5 million a year. We anticipate this to be
a strategy initially for Matmown. However,
the primary question many companies have
is where will the growth capital come for
the future development? Sawyer believes
that the time is right for raising capital.
The capital markets for private placements
and publicly registered offerings seem to be
ripe for investment capital into Matmown
projects quotes Sawyer. It could be the
time in the market for joint ventures and
joint participation by investment groups to
look at unique opportunities like Matmown.
Smaller oil and gas investor groups seem to
be actively seeking operator type partners
which might be of great benefit to Matmown
within the proper structure. Taking market
conditions into consideration, the timing
seems to be right for Matmown to raise
needed amounts of capital to grow the com-
pany.
We have heard about the Matmown oil
and gas properties but what about the gold?
Before joining forces with Mr. Sawyer,
Matmowns strategy was to ramp up the
gold production on its 17,000 acre conces-
sion in Peru, which was approximately 16.4
grams per ton during past limited beta
test production. As Mr. Sawyer vision the
potential assets in Peru and the structure for
further development, he is cognizant of the
values and benefits to Matmowns growth.
However, considering his expertise and
development history on oil and oil project
fundings, Matmowns initial concentrated
focus will be on rapid expansion in the oil
and gas area of the company and plan for the
development of the gold assets of Matmown.
What are the future goals of Matmown?
As a part of the corporate strategy for
Matmown Mr. Sawyer stated, Matmown
will continue to seek out joint venture part-
ners starting with smaller transactions and
hopefully move up into a larger size transac-
tion within a reasonable time period. He
also stated, I belief that when raising capital
in the public markets and seeking joint ven-
ture partners it is best for the company to go
to the individual investor market and stay
away from hedge funds and debt conversion
capital transactions. It is his opinion that
this approach allows for better probabilities
for increased shareholder values.
If you followed Mr. Sawyer at Lucas Energy,
you know that when he took over as CEO in
2009, in addition to his corporate duties, he
also focused on stock market awareness and
investor visibility. He believes that trad-
ing volume through corporate awareness in
the market place is most likely a large part
of the corporate strategy for the future of
Matmown, Inc.
With William Sawyer now at the helm, it
is anticipated that the overall goals will cen-
ter on increasing shareholder value. Steady
growth in stock value, an increasing market
cap and liquidity is the key to shareholder
loyalty and confidence according to Sawyer.
In conclusion, Mr. Sawyers vision, pas-
sion and capabilities combined with the
Matmown assets, could provide existing and
future shareholders a very good opportunity
for success in the future. n
The SEC has replaced Mary Shapiro with Elisse B. Walter, a commissioner, as interim
chairman. Mary Jo White has been nominated as a candidate for the position of chair-
man. She is a former United States attorney from New York. Currently a white collar
defense attorney, she has been involved in a number of high profile cases. The obliga-
tion in this position is to assure impartial and appropriate oversight of the rules while
enforcing them.
What is necessary in this position is a fair individual that works to the benefit of
investment in the United States free market system. We cannot allow individuals to
destroy the liquidity of our markets. We also cannot over regulate our system to the
extent of paralysis. There must be a common ground for the good of our economic
survival.
It is absurd that litigation of many of the class action suits is instigated by collusion
of many of the initial parties without consideration of the harmed investors. More often
than not, the lawyers make more money than investors. The establishment of a maxi-
mum allowable legal fee, if adopted, would serve to insure a more appropriate return
to those actually losing money. The trustee has an obligation to carry out the duties
instructed by the court. Why are the attorneys allowed to solicit lawsuits in states they
are not registered in? How do they get the names of the investors of a private placement
in the first place? Somewhere along the way investors money is diluted. This process
needs to be changed. In some cases, the encouragement to litigate costs the investor
more money than if he or she settled in a fair and impartial arbitration. I have been
an arbitrator and an expert witness and have seen an investor misled on what the final
payment to them will be.
The State Department of Securities in each state needs to censure the unsavory actions
of these miscreants who are creating this unfair practice. To be certain, there are a num-
ber of good and qualified Trustees as well as attorneys. The regulation needs to make
sure that the return of ones investment, if warranted, is done in a more efficient manner
than we are currently doing.
Limiting the legal costs is a fair and judicious start in appropriate regulation reform.
To all the Broker Dealers that may face extinction in the next few years from over regula-
tion, use the office of the Ombudsman. Contact your local congressman, the Senators
in your State, and urge them to instill a fair practices act limiting legal costs that are
sacrificing jobs in their State.
If you are having trouble contacting the Ombudsman, email us at Investor Consultants
and we will offer our assistance. Standing on the sidelines encourages more apathy, do
something for you and the entity you own. n
ombudsman
V I E W P O I N T S
W
hat is
ahead for
the New Year?
n BY jACk LESLIE
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