Micro-Cap Review Winter 2011

quarter 4 2011 microcapreview.
com
@StockNewsNow
$5.00
Grizzly Discoveries [60]
Inovio Pharmaceuticals [78]
Investor Targeting Q & A
with John Vigliotti PR Newswire [10]
New Merriman Capital [37]
DYNAResource [47]
ICVrx A Transformative Drug
Company [82]
Atossa Genetics [90]
Ask Mr. Wallstreet: When Did I
Become a Contrarian [42]
Chinese Public Companies in the
U.S. [32]

Micro-Cap
Allstars
SNN Is to Micro-Caps what CNBC is
to Large Caps [30]
Anatomy of a Biotech: Advaxis Inc. [7]
Anatomy of a Junior Exploration
Company: Cream Minerals [88]
OTCBB: IFIX [17]
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developingthenextgenera0onofcancerimmunotherapies
OTCBB:ADXS
www.advaxis.com
www.stocknewsnow.comwww.snnwire.comwww.microcapreview.com Micro-Cap Review Magazine 3
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
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I
have this vivid memory from my youth
of watching Star Trek, one of my favor-
ite TV shows and one of the best motion
picture franchises in film history. Captain
Kirk was cool but the best character was
Bones, the doctor, the late, great DeForest
Kelly. I remember Bones had two med-
tech devices, one which first diagnosed an
ailment and another one that could treat
anything from deep space chills to a moon
virus. Although fiction and supernatural in
scope, todays scientists and biotechnologists
are on the cusp of inventing incredible diag-
nostic, life saving, life extending devices, and
discovering molecules, cures and treatments,
to raise the quality of our lives, the common
message here is that these geniuses need to
be funded to fruition.
At each biotech, medtech, life sciences
and healthcare conference that SNN attends,
I am no longer amazed at what I see and
hear. The global scientific talent community
is tearing down barriers to treatments and
doing so by thinking outside the beaker, and
inside the cell and genes.
When a CEOs passion hits a crescendo
on camera with me during my SNNLive
interview I often capture their eye gleam
talking about their dream becoming a reality
and its not about the money! Its about their
goal. Ask a CEO why they do what they have
chosen to do and you will find a story about
someone in their family or a friend that ill-
ness became their personal inspiration!
Todays Biotech, Med-Tech, Life Sciences
and Healthcare companies are in a financial
sector of the market that has evolved like
no other sector in the stock market. This
sector is filled with start-ups, companies cre-
ated by grant funding, others from rounds
of friends and family check writers, and
others tied to the University systems and
teaching hospitals. Investing in this sector
requires an investor to have patience for a
long term hold. The investor faces huge risk
as a lab molecule must go through all the
necessary phases of pre-clinical and clinical
trials as the company is faced with funding
the enormous cost of research and develop-
ment without a guarantee of success or of
receiving an FDA approval. Investors need
to become believers in a companys science
and management and once involved, inves-
tors then become cheerleaders filled with
hope and when the long awaited little break-
throughs and small positives happen they
become gigantic events for investors.
Often times investor hope may not be
enough, add in prayer which cant hurt, and
of course sprinkle a lot of luck into the mix
and the chances of success are still miniscule.
In the U.S. 80% of start-ups fail and 20%
become success stories. This four to one ratio
stymies the best and causes more broken
hearts than cholesterol. One out of five com-
panies succeed but as investors know success
can take years barring setbacks and the pain
of enduring rounds of financing and stock
dilution, board disputes, failed FDA results
and delisting issues. Investors waiting for
public announcements on biotech compa-
nies resemble a nervous expectant parent
because each announcement is nerve racking
and monumental.
So with all this risk, uncertainty and brain
drain why invest in this sector of biotech,
med-tech, life sciences and healthcare?
Because one day we will all be patients! n
www.stocknewsnow.com
Follow us: @StockNewsNow
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Teresa Touey
Bobby Kraft
Lance Jon Kimmel
Dr. Gordon Chiu
Sheldon Shelly Kraft
Eleanor Vera
Jeb Handwerger
Richard D. Hastings, CCE
Chris Berry
Dr. Frank Grossman
Lindsay Hall
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4 Micro-Cap Review Magazine www.stocknewsnow.comwww.snnwire.comwww.microcapreview.com
C
M
Y
CM
MY
CY
CMY
K
C O N T E N T S
WWW.MICROCAPREVIEW.COM
QUARTER 4 2011
10 Capital Markets Visibility Program
Drives Investors Engagement for
Small-Cap and OTC Companies
13 Talk to thousands of Active Investors in
Real-Time. (in Your pajamas)
15 Q & A with Doug Jamison on Venture
Capital State of The Market
22 Micro Cap Investing is Not a Strategy
By Ian Ellis
25 The Odds and the Opportunities in
Junior Metals Explorers By Brent Cook
28 Biotechnology Supermen and
Superwomen By Teresa Touey
30 SNN is to Micro-Caps what CNBC is to
Large Caps By Bobby Kraft
32 Chinese Public Companies in the U.S.
Restoring Condence
By Lance Jon Kimmel
34 Is Anything Predictable for 2012 and
Beyond By Dr. Gordon Chiu
37 The New Merriman Capital
By Sheldon Shelly Kraft
40 Caregiving: Ready or Not or Tag Your
It! By Eleanor Vera
44 Whats Really Going On With The Rare
Earth Exports? By Jeb Handwerger
52 The Top Down Opportunity for Micro-
Caps in 2012 By Richard D. Hastings, CCE
54 Metal Market Overview 2011
By Chris Berry
56 Value Beyond Prot
By Dr. Frank Grossman
62 How to Hedge Your Micro-Cap
Portfolio by Using Options on Dow
Futures By Lindsay Hall
72 International Stock Exchange
Executives Emeriti to Meet in Orlando
By Jim Schnorf
74 Do You Wrap?
77 Are You DTC Eligible? By Lisa Lowe
82 ICVrx A Transformative Drug
Company for the Treatment of Epilepsy
and Other Brian Disorders
By Virginia Grantier
FEATURED ARTICLES
Finance
42 Ask Mr. Wallstreet: When Did I Become a
Contrarian? By Sheldon Shelly Kraft
Financial Puzzle
59 SNN StockWord Puzzle
Financial Books
65 Caveat Emptor or Buyer Beware
Written by Sheldon Shelly Kraft
Opinion
67 Beginnings and Endings By Rabbi Stephen Robbins
94 Ombudsman By Jack Leslie
Comic Strip
92 WallStreet Chicken - Episode 5
Legal, Tax & Accounting
85 The Compliance Corner By Chet Hebert
Proled Companies
7 Advaxis - Anatomy of a biotech
17 Internal Fixation Systems Orthopedic
Implants
47 DynaResource Ready To Shine
60 Grizzly Discoveries Potash Properties &
Diamonds in Alberta & Gold, Copper & Silver in
British Columbia
66 Brazil Resources - Brazils Next Big Gold Story
78 Inovio Pharmaceuticals - An Emerging
Revolution in Vaccine Development
86 Maril Mines Ltd. A Junior Mining Company
88 Cream Minerals Ltd. The Anatomy of a Junior
Resource Exploration Company
90 Atossa Genetics New Pap Test for Breast
Cancer Launched
in cooperation with
Hosted by the city of Haifa
Where global investors and industry executives
meet Israel's Medtech and Biopharma companies to talk business
BioInvest Israel 2012
March 5-6, 2012 - Dan Carmel, Haifa, Israel
www.bioinvestisrael.com
info@thetbngroup.com
in cooperation with
in cooperation with
TheAnatomyofaBiotechCompany
Itstartedwithawomanwhogotbreastcancerandshegotmadaboutit.
WhenDr.YvonnePaterson,thenasinglemotheroftwo,contractedbreast
cancer, and beat it, she resolved to focus all her scien0c research on a
beDerwaytoghtcancer-byusingtheimmunesystem.Thiswasnotanew
idea.Inthe1800s,itwasobservedthatcancerpa0entswhocontractedan
infec0on during their illness had temporary tumor shrinkage. In fact, the
immunesystem,whetherexcitedbythecancerorbyaninfec0on,isableto
destroy cancer cells and does so several 0mes in our lives. And then
some0mes it doesn't. No one knows exactly why, and aDempts to turn on
the immune system by injec0ng targets--Tumor An0gens--had resulted in
puzzlingfailures.Theimmunesystemturnedon,
Ra=onalDesign:TheBugintheMachine
Instead of hit or miss tes0ng of new poisons
or new an0gens, Dr. Paterson designed a
novelsystemtos0mulateanddirectimmune
aDack. She started with one of the most
potent natural immune s0mulators known--a
bacterium called Listeria monocytogenes.
Ea0ng Listeria for centuries in fruits and
vegetableshas given humans a hard wired
immune memory against this pathogen- a
response developed over thousands of years
with over a dozen components more
comprehensive than any new or ar0cial
immunes0mula0on.
Designing Life to Save Life: Making It Safe to

Man,DeadlytoCancer
Dr. Paterson created less virulent strains of
Listeriatomakeitover10,0000mesweaker.She
also redesigned its protein factories to secrete
two kinds of proteins: an0gens that are designed
todirectanimmuneaDacktowardsthecancerof
her choice and a protein called LLO that could
help Listeria infect immune cells. LLO is the
second key element of ra=onal design. Because
LLOcandissolve&killimmunecellwalls,thereis
aseparatesysteminsideimmunecellstograbLLO
and immediately use it for iden0ca0on by killer
T-cells as targets. Dr. Paterson reasoned that
fusingthisproteintothean0genwouldcreatean
even more urgent and profound immune
responseandwhenstudiedinmice,itdid.
Dr.YvonnePaterson
ProfessorofMicrobiology
UniversityofPennsylvania
SchoolofMedicine
but the immune aDack had liDle eect. Dr. Paterson believed this could be improved through
ra=onaldesign:beDerusingwhatweknowabouthowtheimmunesystemworks.
Lm-LLObeingdigestedbyacellandescaping
LLObeingshownasatargettokillerTcellssothey
canaDackaspeciccancer
PRoFILED ComPAnIEs
To help companies simultaneously address
all those issues, PR Newswire - the global
leader in news and information distribution
services for professional communicators
has launched Capital Markets Visibility 365
, their newest service SPECIFICALLY built
for small-cap and micro-cap companies. To
explain the program, Micro-Cap Review sat
down with John M. Viglotti, VP of Investor
Relations and Compliance Services at PR
Newswire.
M-CR: What was the genesis of Capital
Markets Visibility 365?
F E ATURE D ARTI CL E
Capital Markets Visibility Program
Drives Investor Engagement for
Smallcap and OTC Companies
PR Newswires New 12-month Calendared Investor Relations
Strategy Is Easy and Affordable to Implement
M-CR: Consistent and contiguous man-
ner thus the 12-month program?
JMV: Yes. Capital Market Visibility 365 is
a calendared strategic marketing plan. Once
it is set-up, it almost runs on auto-pilot.
M-CR: The program addresses three tar-
geted audiences. Why?
JMV: Without exaggeration, our clients
shareholder messages will reach a targeted
audience of hundreds of thousands.
Each of the targets delivers different value
to small-cap and OTC companies:
Individual investors for immediate liquid-
ity and (hopefully) buy & hold loyalty.
Institutional investors for dramatic vol-
ume activity and Wall Street visibility.
Financial and sector media (and bloggers)
for third-party validation.
M-CR: Will institutional investors have
interest in companies under $100 million
market-cap?
JMV: Smart buy-side and sell-side ana-
lysts keep an eye on all companies within
their sector, even if a specific company is too
n By shELDon shELLy kRAFT
I
f youre reading this Micro-Cap Review, chances are, you are well aware of the
devastating impact the financial environment has had on small and micro-cap com-
panies. Simply: money is harder to raise, investors are hard to indentify and getting
any notice from the financial press and portfolio managers is beyond challenging.
JMV: Most professional investor relations
tools are not created for smaller listed com-
panies. We have identified that, across the
entire capital markets landscape, thousands
of small-cap, OTC and TSX listed companies
are being underserved and ignored by many
investor relations service providers.
M-CR: Why are small companies under-
served and ignored?
JMV: In my opinion, most large IR service
providers have placed all their sales focus
exclusively on mid to mega-cap companies
and big-ticket products like stock surveillance.
They have neither the sales bandwidth nor
the support resources to execute a product
specially created for small-cap and OTC listed
companies. This has left an IR void that has,
unfortunately been filled by stock promotion.
M-CR: What do small-cap and OTC com-
panies need?
JMV: They need investors and influenc-
ers to hear their story AND they need to
deliver their story in a consistent and con-
tiguous manner.
small today to publish an opinion or take a
position.
Small-cap and OTC companies must build
a consistent and contiguous brand presence
with the institutional investors within their
sector to clearly differentiate and distance
themselves from the inconsistent pump and
dump marketing that is pervasive.
M-CR: Will Hedge Funds take a position
in a company under $100 million market-
cap?
JMV: The answer is often yes.
To help with that, our Quantitative
Targeting algorithm will identify portfolio
managers that may prefer smaller-cap firms
matching their investment style to a spe-
cific clients exact stock attributes.
M-CR: What are the components in the
program?
JMV: There are 11 moving parts to the
program combined from six different ser-
vices and partners including PR Newswire
and RetailInvestorConferences.com.
M-CR: 11 moving parts! It sounds com-
plicated!
JMV: Its not complicated, its calen-
dared. We give clients an entire plan, month-
by-month plan. Theres nothing else like it.
M-CR: What is the cost? Or is that a
secret?
JMV: Like the program itself, were very
transparent. Capital Market Visibility 365 is
$3,000 per month. Its a huge value.
M-CR: Are there variations or options?
JMV: The only Capital Market Visibility
365 variation, for this launch, is clients may
substitute one of the two live virtual con-
ference events (RetailInvestorConferences.
com) with an IR Room - investor rela-
tions website. Companies MUST have an IR
Room its where investors go AFTER they
receive your news.
M-CR: Why arent SEC files included in
this program?
JMV: This is a visibility / marketing
package. We are keeping the product focused
on that rather than the compliance aspect of
investor relations.
M-CR: What do companies need to do to
begin their Capital Markets Visibility 365?
Do you have a sample strategic calendar
people can see?
JMV: Yes. Normally, Id say click here for
more information, but as this is a printed
interview, I invite anyone to simply call me
directly at 201-360-6767. My email is john.
viglotti@prnewswire.com.
M-CR: Thank you, John.
JMV: Thank you. I appreciate the
opportunity to introduce Capital Markets
Visibility 365 to your readers. n
John is responsible for
the development of PR
Newswires products and
services to help public com-
panies communicate with
their key stakeholders.
Viglotti has 25 years
experience in the develop-
ment, management and
marketing of financial con-
tent and delivery platforms
including Thomson One Investment Banking ,
StreetSight, BondWatch, IRtrack, and Amex
IR Online. These platforms and associated pro-
prietary content sets are market leaders serving over
6,000 institutional and corporate clients worldwide.
In 2009, John formed Quantitative Targeting
LLC (QT), focused on the creation of algorithms
that measure the compatibility between a public
company and institutional investors to aid investor
relations professionals in their buyside targeting
efforts. Prior to QT, John was VP of Content Strategy
for Thomson Reuters and Managing Director of
Georgeson Shareholder Analytics. At Georgeson,
John was responsible for the global stock surveillance
and shareholder analysis team as well as building
dashboards for investor relations and institutional
sales and trading.
Prior to Georgeson, John spent 14 years with
financial media companies in content, product and
business development roles. John began his career
in the financial media industry with a SEC based
newswire, Federal Filings, which was acquired by
Dow Jones.

JohnViglotti
VP, Investor Relations Products and Services
PR Newswire/MultiVu

350 Hudson Street | 3rd Floor | New York, NY 10014
Phone 201 360 6767 | Mobile 212 729 8350
Fax 201 942 7013
john.viglotti@prnewswire.com
www.prnewswire.com
Investors are able to get the information they
need in order to make an educated decision
about potentially adding our stock to their
investment portfolio, Roberts finished.
The appeal to attracting retail investors is
not limited to small companies. Large and
mega-cap companies also present at the
monthly events, bringing their own investor
and media following, eager to hear directly
from companies RetailInvestorConferences.
com provided a way for me to be able to
reach out to individual investors in a cost effi-
cient manner, commented Delia H. Moore,
Manager Investor Relations, Aflac. I was
able to reach a group of investors that I likely
would have normally not been able to do if it
were not in a virtual format.
Building credibility begins with vis-
ibility. Live virtual events are a highly effi-
cient and affordable media to get your CEO
directly in front of targeted investors without
the burden and stress of travel. n
Talk to Thousands of Active Investors
In Real-Time. (In Your Pajamas.)
No Travel! Virtual Webcast Conference Series Brings Companies and
Investors Together, LIVE, Month After Month
R
ecognizing a need for consistent
and engaging communications,
three of the worlds leading organi-
zations focused on education and disclosure
to individual investors - BetterInvesting, PR
Newswire and MUNCmedia - have aligned
to create RetailInvestorConferences.com.
Retail investors ownership of stock is
decisively vital for many companies that need
to develop new liquidity to raise capital and...
Have little or no Wall Street interest and
activity
Need a retail investor base to comple-
ment their institutional presence
Want to forge deeper relationships with
retail investors in context to Dodd-Frank
reform and ongoing proxy access regulations
Issue regular dividends
Can leverage their marketing brand and
generate Investomers
Small and micro-cap companies, in partic-
ular, need more accessible, timely and afford-
able opportunities to transparently tell their
story to a potential audience that can buy
their stock. Furthermore, retail investors can
be a solid and loyal ownership base for com-
panies as they are apt to trade less frequently.
Each month, Retail Investor Conferences.
com showcases 10 public companies to pres-
ent their growth vision in an engaging vir-
tual conference environment. We selected
a monthly schedule as the market is too
dynamic and there are too many companies to
limit opportunities on an annual or even
quarterly basis.
RetailInvstorConferences.com surveys the
audience each month, to qualify their invest-
ment style.
Since its launch, RetailInvestorConferences.
com has help thousands of individual inves-
tors find exciting new investment opportu-
nities and, of course, small and micro-cap
companies discover a new audience.The
depth of quality engagement with prospec-
tive investors during our presentation, the
trade booth and in the days following was
well worth our investment, said Meghan
OSullivan, PR, Regenicin. Were building
new relationships with an audience who
would have never heard our story without
RetailInvestorConferences.com. Thats pow-
erful for an OTC company.
Shawn Roberts, the Director of Investor
Relations at, TSYS offered this viewpoint his
experience with RetailInvestorConferences.
com; I believe the RetailInvestorConferences.
com allows more people to attend a corporate
presentation. Therefore, I can reach more
interested investors in a cost effective and effi-
cient way. The Q&A in my virtual booth was
very beneficial for both me and the attendees.
Shelly: What is the state of affairs in the
Venture Capital Industry? Its 2012 almost,
and things have really changed over the last
decades. Where do you think its headed?
Doug: Its been a rough decade for
Venture Capital. You can look at the
returns, the decade returns in Venture
Capital as of 2011 are negative, which
means that money went in and less money
came out of the industry. It has been very
difficult for the Venture Industry for a
couple of reasons. One, the IPO market for
early stage, smaller technology companies
really has not come back since the bubble
years of 2000. Secondly, venture capitalists
have not been able to raise money because
the asset class has not been performing
very well. And what we have seen is a
bifurcation--weve seen some of the most
successful funds being able to raise more
money, and what we see in the industry
is potentially 2/3rds of the venture firms
that existed in 2000, either are not with us
anymore or will not be with us as soon as
their funds run out
Shelly: One of the captivating situations
that venture capital funds also run into is
that theyve put initial capital into the ideas
they wanted to invest in. Over the course
of time, the companies that they invested
in needed more capital. They had to keep
money set aside to put into what theyve
already invested in, which prevented them
Micro-Cap Nanotechnology &
Venture Capital State of the Market
Q & A with Doug Jamison, CEO of Harris & Harris Group
Harris & Harris Group, Inc.
(NasdaqGM:
TINY) is a publicly traded venture capi-
tal firm exclusively focused on investing in
companies enabled by nanotechnology and
micro-systems. With over 30 nanotechnol-
ogy companies in its portfolio, Harris &
Harris Group, Inc., is one of the most active
nanotechnology investors in the world. Doug
Jamison is the CEO and Chairman of Harris
& Harris Group, Inc. since January 2009, and
has held an executive position in the com-
pany since 2002. In addition to his respon-
sibilities, he is a Co-Editor-in-Chief of the
Journal of Nanotechnology Law & Business
and Co-Chair of the Advisory Board,
Converging Technology Bar Association and
a member of the University of Pennsylvania
Nano-Bio Interface Ethics Advisory Board.
The following interview is a transcription
of an SNNLive Video Interview we did with
Doug Jamison.
Shelly: I want to get your opinion on
the state of the Venture Capital industry.
But first, talk about your firm and give your
credentials
Doug: I am CEO of Harris & Harris
Group. We are one of the few publicly traded
Venture Capital Firms. So by being pub-
licly traded, we actually raise our money from
shareholders. Our shareholders own the firm.
That gives us permanent capital. We have
been in the Venture Capital industry since
1983, for over 25 years investing in the space
O
n date, SNNLive host, Shelly Kraft, interviewed Doug Jamison. The interview
was so compelling Micro-Cap Review magazine management transcribed the
video interview to be shared with its readers. To watch the video interview go to: link
Doug Jamison
from investing into new ideas. Did you see
that as well?
Doug: Certainly. I think the valuations
for early stage companies are very low right
now because theres not a lot of investors
investing in those companies. I think you
are correct. The reason why is because we
still have portfolio companies from 7-8 years
ago that, historically, would now be public
or would have been sold that are still in the
portfolio, we still need to support. So ven-
ture capital funds are only 10 years. When
the time from investment to exit has gotten
pushed from 3-4 years to 8-10 years that
does not bode well for the LPGP structure in
venture capital.
Shelly: When should, in your opinion, a
venture capital firm cut bait or just move on?
Why put good money after bad?
Doug: In the trade, theres a saying, if
youre going to be a good venture capitalist,
you have to understand that the lemons will
ripen before the plums. The question in ven-
ture capital is if you have a good company, if
its able to attract money, if you can build it
into a large company, you should stay with
it. But I think that the discipline needs to be
there that you havent put more capital into
these companies than you will be able to
get out in the market. I think there are two
reasons for that. One, sometimes the venture
industry has an unrealistic expectation of
what the value of these companies will be
in the public markets. Thats changed, the
valuations have come down, and they think
there is greater value than there will be. The
other reason is that sometimes it takes too
much money and too much time to build
these companies to hurt returns. I think in
the venture capital industry, you are already
starting to see it switching. They are look-
ing for opportunities where they can build
their businesses faster, and they can get the
returns they need sooner. But, look, if you
are going to be successful in venture capital
today, you have to be more disciplined than
you ever have been historically. And under-
stand what the valuation you can get is at the
end of the day, otherwise you are going to
lose all your money.
Shelly: I want you tell me back in order of
their importance: the management team, the
technology, and cash flow.
Doug: I would probably say that man-
agement team, the management team, the
management team, and then in this day in
age, early access to cash flow. And finally, the
technology. We are technology investors.
Shelly: What would you advise a com-
pany thats looking to come to your firm to
have you adopt them as your client?
Doug: For our firm, you have to know
what size firm or investor you are visiting.
We are a small firm. Think of us as a $200
million venture fund. We put $5-7 mil-
lion into a company over the lifetime. We
are not looking for an opportunity thats
going to take $100 million because we will
be too small an investor. Were looking for
an opportunity thats going to raise over its
lifetime until exit or being cash flow posi-
tive thats going to raise somewhere between
$15-30 million. We are looking for a strong
management team, a management team
thats done it before, and were looking for
an opportunity in the market that we think
is early, but will be a growing multibillion
dollar industry. We need the upside. We lose
money in over 60% of the deals we do, and
thats good by venture standards. So, the ones
that win have to be in fast-growing, large,
emerging market opportunities that garner
the excitement of the public markets.
Shelly: Is the words start up a turn on
or turn off?
Doug: I think one of the reasons that we
have been successful, historically, is that you
have a contrarian attitude. I think a lot of
people have gotten out of the start-up busi-
ness, and the start up financing investment.
That means that valuations are low. The sur-
est way to make money, over time, is to buy
low and sell high. So, we think there is a great
opportunity, right now, in start up compa-
nies, but they have to be very disciplined.
A lot of the venture industry has moved to
funding later stage deals, and we think there
is some interesting opportunities now, but
when I look forward over the next 5-7 years,
I think the start up space is going to be a very
good space, but we are going to have to build
far more disciplined companies as a venture
industry than we ever have historically.
Shelly: How do you feel about investment
in companies outside of North America?
Doug: We are an early stage venture
capital firm, so we tend to believe that you
need a local sheriff on the grounds. Most of
what we do is in the US. We think there are
great opportunities outside the US in nano-
technology, where we focus. We certainly
think from a venture capital perspective that
you want to be in growing markets, so there
you are looking to Asia. Look, we also have
another saying, which is the pioneers often
get shot in the back, and you dont want
to be a pioneer not knowing what you are
getting into. That is often a sure way to fail,
but you want to be in emerging growing
markets. We still like North America, but we
think the growth markets of the future are
probably going to move overseas and to Asia
from a venture capital perspective because
they are going to be the fast growth markets
of the future.
Shelly: What is your website?
Doug: www.hhvc.com
Shelly: Thank you
Doug: Thank you n
1
For a complete list of recognized international exchanges, see: http://www.otcqx.com/qx/iQualifiedForeignExchange.
CovE R s ToRy
Orthopedic Implants
FDA requires the company to file a 510(k)
to demonstrate that the device is at least as
safe and effective, or substantially equivalent
to an existing marketed device. This allows
modifications without having to follow a
lengthy Premarket Approval (PMA) process.
IFS products are based on existing func-
tional equivalents, therefore the company
can obtain FDA approvals without incurring
exorbitant costs.
moDuLar surgicaL set
Design
IFS designs its surgical sets, to maximize
flexibility and reduce overall inventory. This
is accomplished by designing sets with mod-
ules that can be used together or indepen-
dently. Surgeons are supplied with the
implants and instruments they require for
their procedures but do not tie up inventory.
Competitors have sales representatives bring
in large amounts of inventory and corre-
spondent instruments covering any of the
surgeons possible needs. The expectation is
that more inventory is better. This method,
while allowing one to respond to almost
any situation, is very costly and requires
competitors to carry large amounts of inven-
tory which are rarely used. IFSs modular,
flexible strategy is significantly different and
beneficial given recent changes in steriliza-
I
n an era where sweeping reforms and
cost controls have become the mandate
for the medical industry, the challenge
for survival is to have competitive pricing
while maintaining a high level of quality in
order not to compromise the doctors ability
to treat the patient. Congress has proposed
a 20% decrease in payments to facilities and
physicians. Implantable device costs are being
included in payments to Hospitals and ambu-
latory surgery centers, whereas in the past the
cost was reimbursed separately. The entire
medical device field has been effected and for
the first time, the orthopedic sector is feeling
the pressure to transition from a premium
pricing model to a value pricing model.
Seeing this pressing issue as an opportu-
nity, Internal Fixation Systems (IFS) (IFIX:
OTC:BB) sought to build a company that
could effectively compete in the orthopedic
implant sector at 40-50% discounts to its
peer competitors, while delivering a pre-
mium product. Taking this a step further, IFS
also decided to include significant improve-
ments surgeons wanted to see employed, thus
creating a superior device making IFS the
choice product for the medical professional in
todays environment. Essentially, IFS has cre-
ated a model for the medical implant device
sector that delivers a higher quality product
at a discount, thus separating the notion that
premium pricing is attached to better quality.
Much in the same way that Lexus emerged
to dominate the high end auto industry
and Dell conquered the personal computer
market by delivering a high end product at
affordable prices, IFS intends to overtake the
orthopedic implant device sector and win
over the medical community.
suPerior vaLue
According to CEO Stephen Dresnick, MD
IFS is always looking for ways to efficiently
design, manufacture, inventory and sell our
products. IFSs strategy incorporates several
key elements:
Low r&D costs
IFS focuses on improving market proven
products. These include products used to
treat common fractures that occur every day.
By enhancing existing products, as opposed
to inventing a whole new class of implants,
IFS is able to keep R&D costs below 5% of
revenue. To ensure that IFSs implants are
the best on the market, each implant device
is taken to one of the companys National
Advisory Panels. Each panel is composed
of high volume users, nationally recognized
thought leaders in their respective medical
field. They recommend improvements to
existing designs which are then incorporated
into our new products, giving surgeons the
features they desire.
Low FDa aPProvaL costs
Unlike the pharmaceutical market, once
an item is off patent, the generic replace-
ment needs to be exactly like the name
brand, in the world of orthopedic implants,
improvements can be made to a product
before it is re-launched. In such cases, the
tion of surgery sets. In the past, set trays
could be used in one case and then flash
autoclaved for a case less than one hour
later. Now most facilities require that sets go
through a complete 4 hour cycle before they
can be used again. This assures that all bac-
teria have been killed during the autoclaving
process. With the small, modular sets, we can
have multiple sets for different types of cases
at the facility providing maximum flexibility
for the same cost as the competition.
stanDarDiZation oF
instruments anD
comPonents
IFS standardizes instruments and compo-
nents across its product lines which allows
the company to order and manufacture in
bulk. In addition, instruments are shared
across product lines resulting in less dupli-
cation. This allows the company to carry
much less inventory.
The IFS installed cost control methods
allows the company to deliver quality U.S.
made products at price points that Hospitals
and ASCs desperately need without sacrific-
ing profit margins.
visionary LeaDershiPiFss
roots
IFS CEO, Stephen Dresnick, MD, has been
in the forefront of other successful medi-
cal businesses with his innovations again
providing the profitable results. Dresnick
led two other publicly traded companies
and is best known for starting and man-
aging Sterling Healthcare (Nasdaq:STER).
Sterling was created to help hospitals save
money while improving the quality of their
emergency medicine programs. Sterling
provided quality, Board Certified physicians
to staff Emergency Departments across the
country. Under Dresnicks management,
Sterling Healthcare, went public in 1994,
was sold two years later for $220 Million.
During Dresnicks tenure as CEO, Sterling
rose to Number 6 on the INC Magazine 500
list, was on Business Weeks list of fastest
growing companies, was named on several
list of Floridas best companies and Dresnick
was named Florida Entrepreneur of the Year
in 1996. At IFS, Dresnick is using the same
formula in the orthopedic implant industry
higher quality and lower price.
Dresnick joined IFS in 2008 after experi-
encing decreasing insurance reimbursements
and rising prices for surgical implants at his
operating medical facilities. The challenge
for Dresnick: increase margins, reduce costs
and stop the financial bleeding. Dresnick
uncovered IFS as a solution to his dilmma.
Dresnick found a lower cost solution, ortho-
pedic implants that were 1) of acceptable
quality to the surgical staff and 2) provided
a significant cost savings; Internal Fixation
Systems.
IFS, was originally Founded by Ken West,
Chris Endara, Matt Endara and Dr. Jaime
Carbonell. During their careers in orthopedic
sales and medical manufacturing, Ken, Matt
and Chris recognized the cost control chal-
lenges faced by hospitals and Surgery Centers
like Dr. Dresnicks. This customer-supplier
relationship would soon yield an even bigger
development. Convinced that IFS was onto
something unique, Dr. Dresnick decided not
only to purchase the implants for his surgery
center, but when asked to do so, joined the
company and became the new CEO. He
invested his own capital making a commit-
ment to grow the company. Dr. Dresnick and
his new team quickly realized that the key to
success was not only providing value pricing,
but also delivering a product that was bet-
ter than what was offered by competitors.
The goal of IFS is to sell quality products at
responsible prices.
THE BUSINESS PLAN -- Moving from
small screws to a wide assorted product
portfolio
IFS began by manufacturing and selling
cannulated screws for podiatry applications.
The initial sales were made to restock inven-
tory of competitors screws. The company
began selling to Hospitals and ASCs in South
Florida. As sales grew they proved that they
could produce and deliver a quality alterna-
tive product and demand for the products
at this price point began to grow leading the
team to set out to develop surgical sets and
identify follow-on products.
IFS s redesigned cannulated screw sets
were launched in October 2011 and are
now used at facilities across the country.
To complement the standard mini can-
nulated screws (2.0, 2.4, 3.0 and 4.0MM)
the company added headless screws to the
caddies to address a larger variety of appli-
I am very excited about my involvement in IFS. This an exciting
time of improving and innovating design of orthopaedic trauma
implants and being able to use them at a responsible price point. It
allows myself, as a practicing orthopaedic traumatologist, to create
exciting new implants and also be fiscally responsible to my hospital
system in this era of ever increasing costs.
Patrick B. Leach, MD
Rye Patch Gold.indd 1 2/3/11 3:38:36 PM
cations. The company estimates that once
fully launched, each cannulated screw set
will generate $2,000 per month. IFS plans
to deliver the first 50 sets during the first
quarter of 2012.
Transitioning from elective to trauma
surgery, the company applied for and
recently received FDA 510(k) approval for
a comprehensive line of locking plate and
screw systems. The FDA approval covers
products used to treat 75% of common
fractures. These are the most common
procedures of any orthopedic trauma sur-
geon. The first module of a Locking Small
Fragment System was launched late 2011
enabling revenues to grow significantly by
year end. It is expected that sales for the
fourth Quarter will be the best on record
and more than double those of the third
quarter. Each set should generate $8,000 of
revenue per month and like the cannulated
screw sets, the initial 25 modules should
be launched by the end of the first Quarter
of 2012. With the deployment of the
cannulated screw sets and initial modules
of the Modular Locking Small Fragment
Systems, the company projects a profitable
first quarter of 2012.
IFS s strategy has been to release 25 initial
sets of locking small fragment systems used
primarily by surgeons affiliated with IFS
that sit on the IFS Advisory Panel. IFS plans
to manufacture and distribute 200 of each
module nationwide.
Additional new product modules of the
Modular Locking Small Fragment Systems
are scheduled to be manufactured for deliv-
ery by the end of the second quarter of
2012. The new modules will include calca-
neal plates, distal volar radius plates, and a
proximal humerus (shoulder) plate. All of
the products are FDA approved and in final
stages of production design. Additional
products planned for future launch are a
hip nail system and several spine implant
systems. These products are particularly
attractive to the IFS as they are big ticket
items, billing out from between $3,000 to
$8,000 per surgery.
The companys strategic plan for 2012 is
to aggressively build, market and sell more
and more product while continuing build the
product line through adding more products.
IFS has established distributors in Florida,
Georgia, New England, Southern California,
Oregon, Washington, Idaho, and Texas.
According to Dr. Dresnick, 2012 will be a
big year for IFS. We are continuing to launch
several new products moving the company
further into trauma orthopedics and spine.
We are particularly excited about our plans
for the Spine Market and believe that we
will make a big impact. In late 2010, Dr.
Art Steffee agreed to chair companys spine
panel. Dr. Steffee is considered by many to
be the father of modern spine surgery and
in 1983 he founded AcroMed, innovator of
stainless steel bone screws and plates. He
also introduced new methods to implant
screws and plates in the spine.
We are in the right place at the right time.
The market is $34 Billion a year and with the
economy like it is, we are a low cost solution,
says Dresnick.
IFS completed an S-1 SEC Registration
Statement in May of 2011, and the public
stock is traded on the OTCBB: IFIX. For more
information please call 786-268-0995 or visit
the company website at www.ifsusa.net. n
aDDitionaL inFormation
Stephen Dresnick is a well known healthcare entre-
preneur. He is best known as Founder and CEO
of Sterling Healthcare Group, Inc. (nasdq:STER) a
clinical outsourcing company which he led from its
founding in 1987 through its sale to FPA in 1996
in a transaction valued at $220 million. Dresnick
later bought Sterling back out of bankruptcy from
Phyamerica, and at the time of its second sale in 2005
the company had revenues of $350 million. During
his tenure as CEO Sterling was number 6 on the INC
500 list, was on Business Weeks list of fastest grow-
ing companies, was named on several list of Floridas
best companies and Dresnick was named Florida
Entrepreneur of the Year in 1996. Since leaving
Sterling, Dresnick has owned hospitals and surgery
centers and is a sought after healthcare consultant.
I recently had the opportunity to evaluate and use the IFS implants
for my patients. It is my conclusion that they provide an excellent
form of fixation, one that I will utilize during my operative cases. It
should be noted that the screws themselves have sharper than normal
cutting teeth, thus allowing easier facilitation during my surgical pro-
cedures. Another advantage in choosing IFS is that their implants are
extremely cost effective.
In fact, they are so cost effective that we standardized our surgery
center on IFS 3.0, 3.5, and 4.0 cannulated screws.
As an owner of a new and cost conscious surgery center, IFS pro-
vides us with the quality and cost effectiveness needed to provide
quality care to our patients as well as the savings necessary to make
our procedures more profitable.
Jamie A. Carbonell, DPM, FACFAS Jackson Memorial Hospital
South, Podiatric Residency Program Director
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
M
icro cap investing is not a strat-
egy it is simply participating
in a stratum of the stock mar-
ket (that most stock market investors over-
look). Those who find themselves attracted
to micro caps come to them for different
reasons, and therefore have some level of
strategy behind their activity. For many it
is the prospect of spectacular returns to be
gained by being early in finding unheard of
companies before they become hugely suc-
cessful. For others it is a result of a common
frustration not beating the market with
well-known stocks. Still others are simply
bargain hunters who will tell you, using
many different measures, how cheap their
favorite stock is before they tell you what the
business of its issuer actually is.
Micro-Cap Investing
Is Not a Strategy
practically, a useful way to categorize a micro
cap is if its market cap is not high enough for
most small cap managers to consider lets
call it their threshold. This is not easy to
gauge, but one can estimate it by inspecting
changes in quarterly 13 F filings. A robust
analysis of such activity would likely show
that thresholds vary by manager, by sector
(with a lower threshold for sectors in favor
versus out of favor) and over time. This last
variation is critical - over a long period of a
trending market, the direction of the average
small cap threshold will correlate with the
market (seen clearly during the 90s). But on
a shorter term basis (over several quarters)
my observations suggest that small cap man-
ager thresholds are inversely correlated with
recent market direction. This short term
inverse correlation can continue for years
in a volatile ranging period such as the last
decade. During a market decline small cap
managers become increasingly concerned
about liquidity. In a rising market they
become more willing to take on risk in order
to outperform benchmarks and peers.
The reason it is important to understand
the difference between micro caps and small
caps is there are many more buyers for small
caps than micro caps. Though there are at
least as many stocks to choose from in the
micro cap stratum as there are in small cap,
it is not economically viable to manage an
appropriately sized portfolio of micro caps
for a typical percentage of assets manage-
ment fee. Those that are large enough to be
economic are necessarily broadly diversified
to the point of mimicking the aggregate of
micro cap stocks or, very illiquid which also
n By IAn ELLIs
Write down your (micro cap) strategy
in one sentence. You might use multiple
strategies, but each one should clear. This
exercise might not come easily to you but
persevere - the micro cap stratum of the US
stock market is a jungle with as many stocks
in it as the main market. The risks of getting
off track are typically more expensive, while
the rewards of staying on the right track can
be much higher. Think about why you read
the Micro-Cap Review, where you get stock
ideas from and the characteristics of the ones
you respond to. The important thing is to
find a strategy that plays to your analytical
strengths and your personality. Your strategy
should be as comfortable as an old pair of
boots and then all you have to do is put one
foot in front of the other and stay on track.
My micro cap strategy: identifying micro
cap companies that are likely to grow into
small caps. In order to explain my method-
ology, I must explain the difference between
a micro cap and a small cap, why this differ-
ence is important for micro cap investors,
why stocks graduating from micro cap to
small cap can be an important source of
returns, and finally why deploying this strat-
egy suits me.
Since the MicroCapital Funds were
launched eleven years ago, Standard &
Poors has not adjusted its categorization of
micro caps; companies with a market capi-
talization of less than $300 million. Others
find that what is too small to be included in
the Russell 2000 Index is a more useful mea-
sure. I tend to agree with this classification,
since most small cap funds and managers
are benchmarked against this index. More
1
ACCESS. INSIGHT. OPPORTUNITY.
AVM12_StockNewsNowAdvFo.indd 1 1/31/12 4:52 PM
inhibits the potential for active management.
The better business model for a micro cap
manager is to manage a smaller portfolio
(my favorite rule of thumb is that the mean
market cap of holdings should exceed the
total value of the portfolio) under a hedge
fund structure (incentive fees). While pro-
viding a workable business model, it unfor-
tunately excludes both smaller (non-accred-
ited) investors as well as large institutional
investors (not enough capacity). As a result
there are very few micro cap managers who
have been able to raise and retain sufficient
assets to be in business at all. With very few
genuinely active micro cap managers, the
impact of small cap managers involvement
in micro caps can be dramatic, the higher
the market cap of a micro cap the more
small cap managers will consider the stock,
and other things being equal, the higher the
valuation since stock prices are determined
by competing buyers. This is why we focus
on growth companies that are likely to grow
into small caps and avoid those that are vul-
nerable to material setbacks or are too slow
growing to ever get there.
I do not want to suggest that there are
not good returns available from other micro
cap strategies. But I prefer not to hope or
wait. I prefer to use the skills and reputation
developed over years to analyze the custom-
er value propositions that companies offer
and calibrate their managements abilities to
reach the objectives of becoming bigger and
better companies. I have found companies
in this vein consistently become more widely
appreciated in the stock market over a spe-
cifically targeted period of time.
In future columns, I look forward to shar-
ing some of the lessons we have learned and
tactics we have developed to deploy our par-
ticular micro cap strategy. Additionally, we
expect to touch on topical subjects that are
particularly relevant to micro cap investors.
Meantime, happy hunting to you!
Ian Ellis President & Portfolio Manager
Mr. Ellis founded MicroCapital in
2000 and is responsible for management
of the MicroCapital Funds in all respects.
Previously, he was portfolio manager of the
Genesis Funds at New York-based fund man-
ager Archery Capital. Before joining Archery
in November 1996, Mr. Ellis worked for
GLG Partners, a London-based investment
management firm. Mr. Ellis began his career
in institutional research sales at Goldman,
Sachs in 1985 after graduating in Philosophy,
Politics and Economics from the University
of Oxford. n
The Odds and the
Opportunities in Junior
Metals Explorers
stages of the discovery. That potential, to
make five, ten to one hundred times your
investment in short order, has attracted
over $10 billion of new speculative capital
(by way of more than 4,000 financings)
over the past two years into the Canadian
junior mining sector alone.
But before jumping head first into this
high-risk venture a word of caution to
By BREnT Cook
www.explorationinsights.com
T
he discovery of an economic mineral deposit is an extremely rare occurrence
that involves a very difficult, costly and determined effort. For the few people
or companies that do succeed it is an extremely profitable occurrence as well.
Recent success stories include Aurelian
Resources, which was bought by Kinross
for $32 per share (pre-split); AuEx
Ventures, which was bought by Fronteer
for $6.00 per share (Fronteer was in turn
purchased by Newmont for $14 per share);
and, Ventana Gold, which was acquired for
$13 per share. All of these junior explorers
were trading at sub-$1 prices in the early
Fig. 1-Discoveries, spending, and total ounces discovered. Source- Barrick
Gold, w/ minor edits by Exploration Insights
the uninitiated: it is exceedingly tough to
stumble across Mother Natures buried
treasures before going broke.
How tough is it?
Barrick Gold included some telling
slides as part of their recent Investor Day
presentation. Figure 1, below, illustrates
the increasing difficulty the mining indus-
try is having in finding new gold and
gold/copper deposits. Current global mine
production is in the order of 85 million
ounces per annum; whereas, as the chart
illustrates, the last time the industry found
that many ounces in a year was 1999. For
reference, consider that 85 million ounces is
approximately the total gold produced from
Nevadas world class Carlin Trend over its
30-year history. For those not keeping track,
thats one Carlin Trend a year the gold min-
ing industry has to prove up just to stay even!
The dearth of new discoveries noted above
comes despite the significant increase in
exploration spending since 2002. Particularly
disconcerting (to the larger mining com-
panies at least) is the decline in discoveries
since 2006, notwithstanding that explora-
tion spending has more than doubled from
$2.5 billion to over $5 billion. The bottom
line is that more and more money is finding
less and less gold! The upshot of that fact is
that the very few gold discoveries that are
legitimately economic are going to be excep-
tionally valuable. That gap in production
versus discovery virtually guarantees that the
few successful junior exploration companies
will command a premium takeout price
hence our focus here at Exploration Insights
on the junior end of the spectrum
Fortunately for the gold mining industry,
the increase in the gold price has provided
a grace period for the mining companies
in which they can forestall the produc-
tion deficit. They have managed this dis-
covery versus production deficit by expand-
ing existing operations at their mines and/
or lowering the cutoff grade (value per
tonne of rock). This is documented by a
recent BMO Research report detailing the
decline in mined grade from 1997 to 2009
(Fig. 2 below). The average mined grade
over that time period decreased about 35%,
which, when combined with the increase in
material, labor, and power costs, resulted in
industry wide gold production costs more
than doubling over that same time frame.
This lowering of the cutoff grade is only
made possible by the higher gold prices that
effectively turn previously uneconomic rock
(waste), into economic rock (ore). There is a
limit to how far mining companies can push
the waste to ore strategy before their opera-
tions turn marginal or begin to lose money.
On a more positive note for the major
mining companies, the steady ten-year rise
in the gold price means the miners are flush
with cash. This excess cash flow situation
cant go on indefinitely because of the prob-
lems discussed above: declining discoveries
and declining gold grade equal declining
margins. Major gold miners now have a rela-
tively short window of opportunity in which
to act. The share prices of most of the junior
explorers (the good and bad) have seen sub-
stantial declines in share prices over the past
8 months. The share price decline means the
good can be acquired at reasonable prices.
The bad I am afraid are still worthless.
The results is that the opportunity for
speculators in the junior mining sector is the
best I have seen in quite some time. Mining
companies are making good money, and
the confluence of these two macro-themes:
declining discoveries and increasing earn-
ings, bodes well for those of us willing to
speculate intelligently in this sector. All we
have to do is buy the right penny-stock com-
pany and wait for the buyout. Problem is, the
odds of discovery are extremely low.
How low?
There are in the order of 2,000 junior
companies listed on the Canadian exchange
and maybe 1,000 more listed in Australia,
London, and elsewhere. In round numbers
they are exploring 10,000 mineral proper-
ties of which only 1 in 1,000, on an annual
basis, will produce an economic discovery.
Worse, only 1 in 10,000 will result in the
delineation of a gold deposit of greater than
4 million ounces (Stephen Enders, Society of
Economic Geologists Newsletter, July 2011).
The obvious question for reasoned specu-
lators now becomes, How is it possible that
3,000 publicly listed companies are able to
raise billions of dollars given that the odds of
success are 1 in 1,000 for an OK deposit or 1
in 10,000 for the big deposit? The simplistic
answer is that Mother Nature has been very
generous to exploration geologists and by
association, the brokers that make their liv-
Fig. 2- Change in average gold grade since 1997 in underground, open pit,
and dump leach deposits
ing selling the dreams of buried treasure to
the public by playing to human nature: greed
and the susceptibility to an easy getting rich
quick story.
What is exploration and why are the odds
so low?
The scientific basis of minerals explora-
tion is pursuit and understanding of anoma-
lies (variations) within the Earth. A mineral
deposit is a special type of anomaly in which
enough metal has been concentrated under
the right geologic conditions to make it eco-
nomically feasible to extract. The problem is
that for every economic metallic anomaly (ore
deposit) there are thousands of uneconomic
ones that, for any number of reasons, dont
cut it. The reasons for failing could include
grade, size, metallurgy, depth, strip ratio,
location, politics, community, environmental
concerns, etc, etc. Referring back to the open-
ing sentence in this paragraph, explorationists
evaluate anomalies and an anomaly is little
more than some variance from background
in the geochemical, geophysical, or geologi-
cal characteristics of a piece of Earth. There
are literally billions of these anomalies that
merely reflect and are a function of the Earths
evolution over billions of years.
So whats an investor to do?
Of the roughly 3,000 junior exploration
companies combing Earth chasing down
anomalies, maybe half can be thrown out
because of incompetent or unfocused man-
agement: management is key in the junior
sectorget to know them.
Of the remaining half, about half again
can be easily screened out based on the type
of mineral target they are exploring. I see
way too many exploration groups raising
and spending money on targets that, even
if successful, are not really valuablemost
are too small and marginal at best. Therefore
in such a high risk investment sector it only
pays to focus on companies that are explor-
ing for game changing discoveries-- ones
that can increase the share price tenfold or
more. Know what type of deposit the com-
pany is looking for and what it sells for in the
open market.
The other major issue investors face in this
sector is shareholder dilution at the company
level. Of what value is a tenfold increase in
market capitalization if it is accompanied by
a tenfold increase is shares issued? In miner-
als exploration, money only goes one way:
out. This is a capital-intensive business-- no
capital means no business. A company must
have a very clear vision of the progress they
need to see and demonstrate in order to raise
money at the next level. Make sure company
management is not only technically compe-
tent but financially literate as well.
Since we know that most exploration proj-
ects are going to eventually fail despite the
early excitement, it is critical to recognize the
fatal flaw ahead of the crowd. Junior compa-
nies thrive on news releases, so an investors
job is to interpret the drilling, metallurgical,
and sample results in the context of the tar-
get being explored. When things start going
wrong, get out and get out fast. I have found
hope and unfounded belief to be very poor
investment theses.
Finally, the money you invest in this sec-
tor should be money you can afford to lose;
but the object is not to lose it but to win big.
Take your time and wait for the right pitch.
There are no called strikes in this game and
there is no shortage of new hot stories that
will be touted by the brokerage industry. By
spending the time to research a company,
via talking to management, following results,
and getting sound advice from someone in
the industry, you are way ahead of the crowd.
In the end, that is what seems to work best. n
about brent cook
Brent Cook is a geologist and junior mining analyst
with over 30 years of mining industry experience.
For 20 years he worked as a consultant to most of the
major and many junior mining companies evaluat-
ing mineral projects. He was also involved in target
generation, grass-roots exploration, drill campaigns,
feasibility studies and bank audits involving a variety
of metals scattered across five continents and about
50 countries. In 1997 he became the mining analyst
for Rick Rules Global Resource Investments, advis-
ing two funds in which they turned ~$14 million
into well over $200 million in a five year period. In
2008 he started the junior resource investment let-
ter Exploration Insights. Brents letter discusses the
mining sector and focuses on what Brent is buying,
selling and avoiding with his own money.
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n By TEREsA ToUEy
Understanding the policy and political
implications of these cuts is required.
Firstly, the actual numbers will have to be
assessed. Secondly, bi-partisan support
is needed for industry growth over the
next decade. Figuring out the politics and
policy is the challenge. Then, the informed
advocacy begins. Each BIO cluster has its
regional group. One example is the Mid-
Atlantic BIO Symposium which meets
annually. Regional models can facilitate
information gathering on best practices
and positions in a unique, specific way for
each region as well as provide key building
blocks to a national response.
Another example is the recent town
hall meeting convened by Philadelphias
University City Science Center on Monday,
October 17, 2011. The question posed to
participants was: Is innovation scalable?
Panelist Glen Gaulton, Penn Professor
of Pathology and Laboratory Medicine,
shared a friends story. Crizotinib, a new
drug, has extended her life. Pfizer did a
multi-site trial for this drug. Penn was
one of the sites in both lung cancer and
neuroblastoma.. His friend was in the
lung cancer trial. Presently, she is nearly
Where are the Future
Biotechnology Supermen
and Superwomen?
This result automatically triggers a $1,2
billion in mandatory cuts in government
spending, beginning in 2013, with about
$600 billion cut from military spending
and the balance from entitlement programs.
How can the biotechnology industry prepare
for the impact? Recent history yields relevant
insight.
As Burrill and Companys Marketwire
reported on October 3
rd
, 2011, the fight in
the United States over the raising of the debt
ceiling and the debt crisis in Europe have
fueled turmoil in the stock market that has
taken a toll on the performance of biotech
stocks, slamming the brakes on a solid year
of financing for the sector.
T
he congressional super committee was charged with cutting 1.2 trillion
from the federal budget. An agreed consensus between six Republican and
six Democratic members never arrived.
Also from the same report, public
financing in the third quarter fell to just
under $3.1 billion compared to $9.1 bil-
lion in the previous quarter. The amount
raised through IPOs fell 72 percent, fol-
low-ons fell 79.8 percent, and PIPEs fell 53
percent. Five life sciences companies filed
in September to go public in the United
States, but it was the first month this year
that no life sciences IPOs were completed.
While 2011 remains on track to be
a year of solid performance for biotech,
global financial problems and dysfunction
in Congress have turned investors away
from risk, says G. Steven Burrill, CEO of
San Francisco-based Burrill & Company,
a diversified global financial services firm
focused on the life sciences industry.
Despite what has been an upbeat year of
developments for the sector, broader eco-
nomic worries have thwarted access to the
capital companies will need.
The automatic cuts could affect life
sciences through budgets for the
National Institute of Health, Medicare,
Medicaid, Food and Drug Administration,
Department of Defense, Department of
Agriculture, and Department of Energy.
three years into survival, feels great and is
leading a normal life.
Crizotinib works for patients with ALK
kinase protein mutations. Sub-forms of
lung cancer have a mutation in the ALK
protein as part of their cancer mechanism.
Only twelve percent of all lung cancer is
linked to mutations in the ALK protein.
However, average survival prior to this
drug for people at stage four of cancer is
a five year survival rate of less than five
percent, with continuous chemotherapy,
every six weeks, which is eliminated here.
Clearly, industry and universities part-
nering brings results to patients reminding
all attendees of the high stakes of translat-
ing science to commercial success. Stephen
S. Tang, PhD and CEO, University City
Science Center President and CEO, serves
nationally on the 15-member Innovation
Advisory Board. This US Department of
Commerce board has been directed by the
America COMPETES Reauthorization Act
of 2010 to hold a series of innovation town
halls. Participants explore the nations
innovative capacity and global economic
competitiveness. A report will be gener-
ated for the President and Congress.
Over the next year, It will become more
clear to the nations BIO clusters how
deficit reduction will impact the intersec-
tion of government, science, healthcare,
and bioengineering and its partnerships
between universities and industry. As
attendee Kenny J. Simansky, Vice Dean
for Research at Drexel Universitys College
of Medicine, commented, it will impact
training at all levels post doctorate, grad
school, undergrad, and high school for
our future scientists, doctors, engineers
and entrepreneurs.
Lastly, some history, past and present, was
included as Tang introduced US Senator
Bob Casey, D-PA, sponsor of S4018, the
Life Sciences Jobs and Investment Act of
2010, in its intial legislative stage along
with its House counterpoint, HR6165
sponsored by U.S. Representatives Allyson
Schwartz (D-PA), Bill Pascrell (D-NJ),
Devin Nunes (R-CA) and Kevin Brady
(R-TX). Our nation, founded by anti-
monarchist colonialists in Philadelphia,
like Ben Franklin, and strengthened by
waves of immigrants from Europe and
Asia, is competing globally in the twenty-
first century. The impact on patients with
cancer and all other major diseases will
hang in the balance as well as our ability
to heal, feed and fuel the world. n
E. Teresa Touey
Lumena Consulting--Founder and Principal
Suburban Philadelphia 610-733-0014
GOLD FINLAND
ROMPAS PROJECT BONANZA
TSX: MAW; Frankfurt: MRY; Pinksheets: MWSN
Issued Capital: 51,670,753
Fully Diluted: 62,014,265
For Information: Nick L Nicolaas
Tel: +1 (604) 657 4058
Email: nick@mininginteractive.com
Canadian Oce
Suite 1305 - 1090 West Georgia St
Vancouver, BC, V6E 3V7,Canada
www.mawsonresources.com
PERU AND ARGENTINA GOLD COPPER
NEXT GENERATION
SOUTH AMERICAN EXPLORER
www.darwinresources.com
Darwin formed as part of reorganisation of Mawson Resources Ltd via spin-out
of Peruvian assets
For Information: Nick L Nicolaas
Tel: +1 (604) 657 4058
Email: nick@mininginteractive.com
Canadian Oce
Suite 1305 - 1090 West Georgia St
Vancouver, BC, V6E 3V7, Canada
Subject to shareholder approval on March 30, 2012, Mawson shareholders
to receive one common share of Darwin for each three common shares of Mawson

Darwin to list on TSXv Exchange
n By BoBBy kRAFT
the big boys. Silicon Valley created social
media networks and applications making it
possible for a breakthrough Micro-Cap to be
only a click away from being viral.
As CEO of a Micro-Cap company there is
a need to get your story seen & heard. Going
to financial conferences and doing road
shows is an important spoke in the overall
exposure wheel but will fall flat without
social networking today. Having a presence
on the Internet is crucial, not only for your
tech-savvy baby boomer, but for the next
generation of investors, Generation Y, who,
like me, grew up with a palm pilot in the crib
and are now the new Microcappers .As a
CEO, you dont want to hear, Ive never or
heard of you or I havent heard much at
all from your company. There is no excuse
for this anymore. Your companys media
page should be loaded with video interviews
and filled with content for viewers to get
to you and the story of your business. Its
perplexing for me to hear that a Micro-Cap
company doesnt have a Twitter account or
a Media Page on their website. I am cap-
tivated by the stories I hear, such as: a com-
pany finding a new molecule to cure cancer,
a mining company finding a new vein with
more grams per ton than ever seen before,
or a green consumer product that I wish I
invented. For me, it doesnt make sense that
a CEO is not actively telling the story. If a
company is as exciting as you make it sound,
SNN is to Micro-Caps what
CNBC is to Large Caps
Major TV networks like CNBC, CNN and
Bloomberg will produce segments, nightly
specials, or breaking news story bulletins
to announce Apples latest iPad or iPhone
product launch or update. Apple, once a
micro-cap company is a major success story
and has now been around for long time.
Apple created disruptive technology and
revolutionizing products and notoriety, a
large shareholder base, and now is part of
everyday Americana and certainly entitled
to all the coverage they receive. Mainstream
media networks are about ratings, attaining
viewers, and advertising revenues. Not only
do people care about the next great gadget
Apple launches but as a public company its
financial information too is highly sought
N
ews stories about large cap companies flood the market place from a
multitude of news sources and re-publishers. When Apple posts a press
release, it spreads virally through social media faster than an election result.
after which is directly tied to its prod-
ucts or management statements. Traders,
stockbrokers, analysts, institutions and retail
investors, in todays digital age, pay close
attention to news; they analyze and make
decisions based on the coverage a company
gets from each and every news source it is
coming from, like the old clipping services
of yesteryear. Yahoo Finance has thumbnails
for financial blogs and message boards in
the left hand column for viewers to see ref-
erencing information about each company.
Bloggers allowed Joe the plumber to turn his
fascination with the recycling industry, into a
sought after forum of sector expertise about
his industry. Although large cap companies
flood the newswires and occupy the tape,
stories about exciting Micro-Cap companies
have to claw their way into the mix of data
available on the web. Bloggers and tweeters
understand that striking it big with a Micro-
Cap company will translate into traffic, traf-
fic translates into viewers, viewership trans-
lates into interest, interest inspires action
and ultimately actions can turn into dollars.
This vast pool of investors is widespread,
preoccupied, overloaded with tweets, blogs
and information and very difficult to target.
CNN and CNBC arent calling a Micro-Cap
any time soon for its story, thus a Micro-Cap
CEO needs to figure out how to put the
company in the spotlight; stand out from
all the others in order to share lunch with
tell others! Lack of media coverage for a
Micro-Cap company only signals one thing,
the company is underachieving market rec-
ognition. Social Media is the answer. To get
your story known without the major news
companies doing it for you; your best chance
to be seen is to do it yourself.
Im the social media and communications
director for SNN Inc. SNN is a financial pub-
lishing, media and entertainment company
located in Los Angeles and New York City.
SNN has websites stocknewsnow.com and
snnwire.com and ventures out to over 50
financial conferences annually. SNN publish-
es the Micro Cap Review Magazine (micro-
capreview.com) and records SNNLive video
interviews with CEOs and C-suite executives
of global Micro-Cap companies for dis-
semination. CNBC is to large cap companies
what SNN is to Micro-Cap companies as
SNNs main focus is Micro-Cap companies.
I personally write blogs, tweets and copy
about Micro-Cap companies. I oversee the
writing of a blog for each video interview
SNN records and the writing of coverage of
the interview with a brief overview of what
the company does. Ill be the first to admit
my blogs arent Pulitzer Prize worthy, but the
CEO is capable of telling the companys story
better than anyone. SNNs focus is to tell
each companys story and it is not about ana-
lyzing the financials; but rather retelling the
story through our social networks, broadcast
components, websites, and targeted audienc-
es. CEOs of Micro-Cap companies can have
more passion than Shakespeares Romeo and
Juliet or less excitement than listening to a
boring history lesson. In todays competi-
tive marketplace SNN distributes through
various Social Networks, such as: Twitter
and LinkedIn. Much to my surprise only a
handful of companies SNN Interviews have
accounts on these social networks, which
doesnt necessarily make my job more dif-
ficult but rather the company is at a disad-
vantage because they cant redistribute their
content to a ready audience. The more your
content is distributed, the more chances,
media, a blogger, another tweeter, an indus-
try expert, newsletter writer, potential inves-
tor will pick up the story. News travels faster
than the speed of light in the viral universe,
trends are changing all the timeyesterdays
loser is tomorrows winner or vice versa in
this world. Its not what you know, but when
you know it. Content is king, no matter who
you are. Companies like SNN Inc. are here to
help CEOs generate more of their content,
and create the media presence necessary to
survive in the information age. Social media
is not a spectator sport; its time to become
an interactive participant. When you see
SNN at the next road show, come over to our
booth, well be happy to interview any and
all CEOs and/or C-suite executives of Micro-
Cap companies even Large Cap. Cheers! We
are here to help. n
n By LAnCE Jon kImmEL
already in the U.S. to do to make sure that
their reporting has been correct and, if it
has not been, to restate and get ahead of the
problem?
A big part of the answer can be found
in Sarbanes-Oxley, now on the verge of its
10-year anniversary. A decade on, parts of
SOX provide a road map toward corporate
responsibility. It begins with the tone at the
top. Management of Chinese companies
must accept that by voluntarily accessing
the U.S. public markets, they agreed to the
complexities and rigors of U.S. regulation,
not just a ride on the market wave. Entering
the U.S. public space means that the CEO
is no longer the one and only voice of the
company, to be supported and not ques-
tioned by his management, his board and his
advisors. This in turn requires management
to be willing to work with their indepen-
dent directors and/or Audit Committees to
undertake forensic accounting and confirm
the integrity of their internal controls and
the entire disclosure controls and procedures
process. Management must be willing to
accept negative information and to improve
the entire process of gathering financial and
non-financial information, and reporting it.
The fact is that going public in the U.S.
Chinese Public
Companies in the U.S.
Restoring Confidence
I
t has been about 18 months since the SEC first signaled that its attention
was focused on smaller Chinese companies that had gone public in the
U.S., primarily through a reverse merger or similar transaction short of a
full-blown IPO.
It has been at least a year since a wave of
SEC enforcement actions began. There had
been speculation in some quarters that the
problem such as it was was limited to a
few dozen companies, which still represents
a fair percentage of Chinese companies that
have gone public in the U.S. However, a
recent second wave of enforcement activity
with impressive breadth suggests that this
story is nowhere near running its course.
As not only Chinese public companies,
but audit firms, investment banking firms,
investor relations firms and ubiquitous con-
nectors, liaisons, consultants and find-
ers find themselves drawn deeper into regu-
latory scrutiny, it is not hyperbole to talk of
a full-blown China crisis in the U.S. public
markets. Investors now approach smaller
Chinese public companies with a general
assumption that their numbers may not be
reliable; investment banks that once clam-
ored for this business have retreated to the
sidelines; auditors and law firms now pass
on transactions for which they competed
aggressively.
However, as with all things, the China
crisis will eventually pass. Companies who
have not complied with securities laws and
SEC regulations will delist, go private and
leave the U.S. public markets. Bad actors
will enter into consent decrees. Professionals
who should have been doing their due dili-
gence will be sanctioned. And some will
inevitably go back into the woodwork, wait
for things to die down and re-emerge when
the next big thing or new market emerges.
That has happened through Rule 504 offer-
ings, Reg S abuses and the reverse merger
craze. Unfortunately, it will happen again.
In the meantime, China will remain a
dynamic economy for decades to come,
with hundreds of companies who do and
will still want to access the capital markets
in the West, including the U.S. What are
these companies to do to position them-
selves for market acceptance? And what are
smaller Chinese public companies who are
done correctly is expensive and maintenance
(periodic reporting) is also expensive. For a
profitable company in the U.S. or China
this should not be a problem. But it is tempt-
ing perhaps too tempting to read on the
Internet that a company can go public from
soup to nuts for $25,000 or so and not be
willing to hire the right accountants, audi-
tors and attorneys to do the job correctly at
the beginning, help educate management on
how to set the tone at the top and then carry
it through year in and year out.
Here then is a primer on how all involved
parties can take control of the regulatory
side of public corporate life, whether the
company is already public or is thinking
about going public. It may not take a village,
but it definitely takes a lot of people:
Management must set the tone at the top
As mentioned, Chinese management must
not only support but fully embrace corpo-
rate accountability, and send an unequivo-
cal message that his CFO, the rest of the
financial department, accountants (who very
often are local and young, and therefore
unwilling to do anything that could be con-
strued as a challenge to authority or their
elders), auditors and attorneys are free to
speak up and point out areas that can be
improved. And they must be prepared with
a sizeable budget to hire not only the whole
team, but the right team. Without the right
tone at the top, everything recommended
here is at risk of failing.
Hire a knowledgeable legal team in China
Chinese counsel not only has to know how
to set up an onshore/offshore structure that
complies with SAFE regulations, but it must
be able to issue an opinion acceptable to the
U.S. investors. That narrows down the pool
of Chinese attorneys to a healthy, but rela-
tively small number.
Get really competent U.S. securities coun-
sel - Similarly, U.S. securities counsel has
to have substantial experience with public
companies, preferably smaller public com-
panies because of the particular problems
such companies seem to face again and
again. U.S. counsel must patiently counsel
Chinese management of their new responsi-
bilities once the company goes public and be
prepared to reinforce that message. For the
most part, the expectations of U.S. public
life are profoundly different and largely not
understood by Chinese management.
Bring on board the best accountants pos-
sible The single biggest current problem
with Chinese companies is a lack of reli-
ability in financial reporting. If the problem
is dishonesty, no amount of advice will fix
that. But if the problem is managements
just not knowing how to do an inventory
rollback, U.S. GAAP reconciliation, calcula-
tion of perks, etc. then the smaller Chinese
company must hire accountant consultants
to help them prepare the financial package
for audit or review. Having said that, the
bumper crop of young, enthusiastic ex-big
CPA firm accountants in China and Hong
Kong do not necessarily bring the experi-
ence and the cultural ability to respectfully
but diligently question management, rather
than just rubberstamp what the CEO would
like to present. The accountants must have
significant experience preparing financial
statements for U.S. public companies or the
process will either drift literally for months
or years or bad numbers will work their way
into the financial statements.
The auditor must be beyond reproach
Not every company needs a Final Four
auditor and the fifth one had enough prob-
lems of its own, so being one of the biggest
does not necessarily mean you are one of
the best. However, the auditor of a Chinese
public company must be able to commit the
resources and directly supervise local con-
tractors in the audit process (assuming they
are used) to make sure not a single corner
is cut. If the accountant is the first line of
defense in financial reporting with integrity,
the auditor is the last line of defense.
As a result of the current crisis with
Chinese public companies in the U.S., the
cost of going public will probably rise and
time to go public the right way will cer-
tainly lengthen, as more steps, players, and
checks and balances will be factored into
the process. But those companies whose
management is both patient and amenable
to a not inexpensive process and who take
the long view, will do what it takes to edu-
cate themselves, be flexible in adopting new
management techniques in internal controls
and disclosure procedures, and incorporate
the best elements of corporate governance.
Right now, it seems that the regulators and
investment community will accept nothing
less. Whether remedial or preparatory, the
work needs to start at once. In the Year of the
Dragon, it is possible to restore confidence. n
Lance Jon Kimmel is the founding and managing
partner of SEC Law Firm, which represents growth
companies around the globe and the regulated profes-
sionals who serve them. Mr. Kimmels practice focuses
on public and private securities offerings, SEC report-
ing, corporate governance, mergers and acquisitions,
representation of companies before the SEC and stock
exchanges, and SRO compliance for investment bank-
ers and other service providers. He handles capital
raising at every level, from seed capital to initial public
offerings, from reverse mergers to PIPEs, from equity
credit lines to bank credit facilities.
Mr. Kimmel is actively involved in alternative
public offering strategies, including reverse mergers
for domestic and Chinese companies in the United
States, and working with private and public com-
panies going public or dual listing internationally
on the AIM in the U.K., the TSX in Canada and the
Frankfurt Stock Exchange.
His clients reflect the spectrum of 21
st
century
business, from manufacturing to medical devices,
from biotechnology to green technology, from finan-
cial services to the entertainment industry, from real
estate to consumer goods.
As one of the most frequently quoted securities
attorneys in America, Mr. Kimmel has contributed
his insights to NPR Marketplace, Dow Jones, Sky
Radio, the Los Angeles Times and Bloomberg Forum,
among other mainstream and financial broadcast
and print media around the world. Mr. Kimmel
has written numerous articles and speaks often on
current legal issues in the corporate finance and
corporate governance arenas in the U.S., the U.K. and
China. He co-chairs the Growth Capital Conference
in Los Angeles, serves on the Securities Regulation
Committee of the American Bar Association, served
as a national coordinator of the SECs Small Business
Forum and has given testimony to the SECs Advisory
Committee on Smaller Public Companies on reform
proposals to ease the burdens of the Sarbanes-Oxley
Act for smaller reporting companies.
SEC Law Firm
11693 San Vicente Boulevard, Suite 357
Los Angeles, California 90049
Tel: (310) 557-3059
Fax: (310) 388-1320
www.seclawfirm.com
email: lkimmel@seclawfirm.com
n By DR. goRDon ChIU
is shrinking. If a company does not innovate,
it will not evolve and therefore may risk
extinction.
Generally speaking, 2012 will mark the
end for certain business models due to
permanent changes in demand that work
against such established business models. On
the other hand, it will be an accommodat-
ing year for four important breakthrough
technologies that are only possible because
innovation began years ago and will never
cease to stop.
#1. Lighter, tougher, Lower
cost materiaLs
Smarter companies like Dow Chemical
(NYSE: DOW) began encouraging their
employees to innovate processes and to
Is Anything Predictable
for 2012 and Beyond?
Never make predictions, especially about the future.
Casey Stengel
L
ooking back on 2011, we have expe-
rienced more turmoil in the mar-
ket than usual, to say the least. Large cap
household names have struggled including
Sears Holdings (Nasdaq: SHLD), American
Airlines (NYSE: AMR), Nokia (NYSE: NOK)
while major financial names have been dis-
counted well over 50% below 2011 highs. On
top of global protests (Occupy Wall Street)
and the world population nearing 7 billion
people (6,984,444,409 as of 29
th
December
2011; http://www.census.gov/main/www/
popclock.html), and exponentially deceler-
ating global demand, the question we are all
asking is, Will demand ever return?
After a decade of rising commodity prices,
companies are trying to push these rising
costs downstream onto the customer. One
lesson learned in 2011 is that global demand
research new materials. By starting as early as
2008, Dr. Mary Anne Leugers and her team
of scientists developed the following chem-
istry process called HIGHLY EFFICIENT
PROCESS FOR MANUFACTURE OF
EXFOLIATED GRAPHENE, patent appli-
cation #: 12/667808.
Graphene would become known as a
super strong material derived from graphite.
It won the Nobel Prize in Physics (2010)
being awarded to Drs. Andre Giem and
Konstantin Novoselov (Reference:http://
www.nobelprize.org/nobel_prizes/physics/
laureates/2010/press.html).
Disclosure: I personally have been
announced in 2011 as the Chief Scientist
with the Canadian graphite mining com-
pany Focus Metals (OTCQX: FCSMF).
#2. smarter Diagnostics
The word smart skin has been floating
around in many journals referencing the
research work of John Rogers at University
of Illinois. It is supposedly an ultra-thin
electronic platform that can stick onto the
human body as a temporary tattoo. This
work was funded by the National Science
Foundation and US Air Force. It contains
flexible transistors, sensors, bendable trans-
mitters, and receivers all packed inside and
capable of stretching with your skin with-
out ever damaging the microcircuits. While
applications are still being developed, the
advantages are significant in avoiding con-
ducting gels and adhesive tapes when col-
lecting data from the skin, muscle or brain.
#3 next generation Paints:
soLar Paints
Certain well known companies in the solar
industry have gotten decimated and some
may even file for bankruptcy in 2012. The
reason for failure is commoditization follow-
ing the slowing of innovation in the polysili-
con wafer and solar panel industry. However,
for those who are thinking innovation, youll
want to watch which company focuses on
an area called solar paints (Reference: http://
www.ncbi.nlm.nih.gov/pubmed/22147684).
Through recent advances in semiconduc-
tor nanocrystal research, one group out of
Notre Dame University has developed a
one-coat solar paint for designing quantum
dot solar cells. The above reference sum-
marizes that a binder-free paste consisting
of CdS, CdSe, and TiO(2) semiconductor
nanoparticles was prepared and applied to
a conducting glass surface and annealed at
temperatures of 473 Kelvin. The power con-
version efficiency was remarkable and solar
paint technology offers advantages of simple
design and economically viable next genera-
tion solar cells.
Another interesting example of a com-
pany focusing on next generation paints
is Dow Chemical (NYSE: DOW). The
Dow Chemical product EVOQUE Pre-
Composite Polymer Technology is revolu-
tionary for the paint industry (http://www.
dow.com/coating/hiding/20111005a.htm).
The product is receiving significant posi-
tive reviews and is another sign that certain
smart companies are dedicating research
funds to innovate new materials for growth.
#4 security, mobiLe, Privacy
anD you:
Once upon a time, Microsoft launched the
operating system called Windows and it
caught a computer virus. That began decades
of nightmares for the blue chip company:
Microsoft (NasdaqGS:MSFT). Gone are days
of the standalone personal computer and
in its replacement will be mobile products.
Everything from mobile anti-virus software
applications to other mobile related com-
merce will pave the way for the 2012 mobile
growth year. It could be mobile cloud com-
puting, mobile data analytics, mobile games,
mobile security, or mobile social media but
the common theme will be mobile some-
thing. Even televisions have become smarter
by being able to interact with your portable
mobile devices.
concLusions:
Innovation is bustling. If anything, the down-
turns have created even greater demand for
breakthrough technologies. Like any com-
pany, it must be managed correctly in order
to grow properly. The United States will
always be a leader in innovation cycles and
this recovery will prove no different.
about the author
Dr. Gordon Chiu is an execution-driven business-
man with nearly two decades 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 globally distinguished 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, developed, 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 translational background, he has inves-
tigated 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 iden-
tification of low cost solutions (i.e. non-invasive
diagnostic equipment) 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 rela-
tionships within the scientific, business, and medical
communities. Dr. Chiu has developed and owns
methodologies called directed combinatorial algo-
rithmic libraries (D.C.A.L.) that are used in various
commercial applications, composition development
and research. n
Disclosure: Dr. Chiu has been appointed as an inde-
pendent adviser to SNN.
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The story of Merriman Capital is a story
of rebirth, evolution, and determination.
Merriman Holdings, Inc. (OTCQX: MERR)
and its broker dealer subsidiary, Merriman
Capital, Inc. (formerly Merriman Curhan
Ford & Co.) was formed from the ashes of
a public company called RateXchange. The
previous business was a software matching
engine for Internet bandwidth which Jon
Merriman and MCFs founders turned into
a successful San Francisco investment bank.
birth From the internet
meLtDown
In September of 2001, just days before 9/11,
the board of directors approved a plan to
enter the investment banking industry as the
marketplace around RateXchanges technol-
ogy had disappeared when the technology
bubble burst. As CEO, Jon Merriman then
raised $3.5 million, hired two of his friends
from Dartmouth College Greg Curhan and
The New Merriman
Capital
retail broker at the firm caused Merriman
Capital to face its most difficult test.
The retail broker, Scott Cacchione, helped
Silicon Valley based venture capitalist
William Del Biaggio III to fraudulently apply
for loans from several banks and private
individuals. Cacchione emailed Del Biaggio
account statements of unknowing Merriman
customers, then Del Biaggio doctored the
statements so the assets would appear to
be his own. With fake statements and his
credibility as a Silicon Valley success story
in hand, Del Biaggio borrowed over $40
million.
After a thorough investigation by the SEC,
it was determined that Merriman Capital
and Jon Merriman had no involvement in
the Cacchione/Del Biaggio fraud. Still, the
legal fees and the global financial crisis near-
ly destroyed MCF. The firm was forced to cut
over half its staff and legal claims continued
to pile up. For many, Merriman Capital was
going to be yet another victim of the global
financial crisis and bad luck.
Then, in August of 2009, the firm unveiled
a dramatic rescue plan. It agreed to settle
$43.5 million in private legal claims for less
than ten cents on the dollar. At the same time,
led by Chicago investor Ron Chez, the firm
We started the firm in a difficult period. Then in 2008, people took us
for dead. Quite honestly, probably a more rational course of action would
have been to just fold the tent and go home but my name is on the door,
and I am proud of what we have built Jon Merriman.
Robert Ford and Merriman Curhan Ford
was born.
Headquartered in San Francisco, and
started during dark days for the invest-
ment banking industry, MCF was founded
to research, trade, advise and finance inno-
vative and fast-growing companies with less
than a billion dollar market capitalization.
The founders of MCF believed and still
do that these smaller, faster-growing com-
panies have a major role in driving global
growth and job creation and are misunder-
stood by mainstream investors.
It took roughly a year and a half for the
firm to post its first profitable quarter in
September of 2003. The momentum con-
tinued into the first quarter of 2004, with
the firm posting revenues up 500% from
the previous year. The market cap ultimately
peaked at over $200 million, with annual
revenues of $90 million and profits of $12
million in 2007.
a rogue retaiL broker anD
the gLobaL FinanciaL crisis
The firm continued to grow and attract new
talent; however, in 2008 and 2009 in the
depths of the global financial crisis a rogue
brought in new investors who invested $10.2
million to re-capitalize the company. One of
the investors who had been defrauded by Del
Biaggio and sued MCF was subsequently so
impressed with MCFs perseverance that he
decided to invest.
In a period of time where the world saw its
financial system brought to its knees, when
Bear Stearns, Lehman Brothers and a host
of smaller firms shut their doors, and a time
when wealth destruction rivaled any event in
the last 60 years, Merriman Capital survived.
In every battle there comes a time when
both sides consider themselves beaten. Those
who continue to attack win Ulysses S. Grant.
With the lawsuits settled, and capital mar-
kets righting themselves, Merriman forged
on; however, the firm had difficulty deliver-
ing consistent profits. This was not because
of a lack of will or talent, but because of
a failing business model. In the age of the
Internet, electronic trading of stocks, and the
shrinkage of the buy-side commission pool,
the traditional brokerage business model
had finally been broken. Equity research that
was once an important differentiating tool
became a commodity. The fact that so many
boutique and middle-market investment
banks have gone out of business testifies to
the brutal nature of the brokerage business
today.
a new moDeL in a
changing caPitaL markets
environment
Understanding the evolution of the mar-
ketplace, and realizing the need for a much
lower cost structure, Merriman Capital
evolved yet again. Guided by the leader-
ship of Co-Chairmen Ron Chez and Jon
Merriman, the firm has developed an
updated strategy that will enable significant
cost savings, generate recurring revenues,
and drive profitable growth; however, the
mission of helping small companies will
remain the same. The new model can be
broken down into four business segments:
1) Capital Markets Advisory, 2) Institutional
Trading Execution, 3) Investment Banking,
and 4) Financial Entrepreneur Platform.
The Capital Markets Advisory groups
mission is to close the gap between where
undervalued public companies currently
trade and where they should trade. The
small-cap segment of the market has been
orphaned for many years now more so
than ever. Closing this valuation and vis-
ibility gap assists entrepreneurial wealth cre-
ation, and helps generate the capital needed
to help small firms grow. The market to
service small, innovative public companies
is significant and speaks to a critical need in
our global economy. These small, but grow-
ing, companies have the potential to employ
millions, and yet the capital markets ignore
them. The advisory business also provides
Merriman Capital a stable base of predict-
able, recurring revenues.
Within the Capital Markets Advisory
group is Merriman Capitals success-
ful OTCQX Advisory practice. Merriman
was the first investment bank that held
the title of DAD/PAL Designated Advisor
for Disclosure/Principal American Liaison
and sponsored the first company on the
OTCQX. There are now over 300 companies
on the QX, and the number is growing rap-
idly. Merriman Capital is by far the leader in
investment bank DAD/PALs and advises over
10% of the marketplace. Merrimans success
can be attributed to the fact that it not only
puts companies in the QX marketplace, but
also actively services them. The firm writes
research on the companies it works with,
introduces them to investors, facilitates trad-
ing and liquidity for the companies stock,
and raises capital for them.
The second business segment at Merriman
is Institutional Execution Services. Merriman
Capitals trading business specializes in low-
friction equity and option execution services
for institutions and ultra high net worth
individuals. The firm hires and nurtures
the best sell-side execution traders on the
Street. Merrimans lead execution trader, Ken
Werner, is widely regarded as one of the best
in the business and has been working with
Jon Merriman for over twenty years.
Third, Merriman Capital engages in cre-
ative investment banking services for smaller
companies. Since the firm was founded, it
has raised over $9 billion for fast growing
and innovative public businesses. Merriman
Capital is focused on public companies
that have the potential to generate venture
capital-like returns. These companies are
overlooked by bulge-bracket banks because
of their size yet they have the ability to
grow rapidly, generate shareholder value,
and facilitate job creation.
Merriman Capitals fourth revenue driver
is its Platform for Financial Entrepreneurs.
The firm looks to help groups of bankers,
researchers, or execution traders to grow
their businesses by providing them with a
flexible platform with high-touch compli-
ance, legal, and operational assistance. The
best example of this is Merrimans incu-
bation of Institutional Cash Distributors
or ICD (www.icdfunds.com). Merriman
Capital enabled the entrepreneurial and tal-
ented executives of ICD to rapidly grow
their business from zero to over $20 million
in revenue and become a brand name in the
money market business.
The story of Merriman Capital is indeed
a story of rebirth, evolution and determina-
tion. It is the story of a boutique investment
bank that has reinvented itself, so that small,
high-growth companies will still have the
ability to change the world by accessing the
capital they need to do so.
Merriman Capital hosts a well known
annual investor conference for these innova-
tive and rapidly growing companies. This
year, the conference will be on February 1
st
in
New York City at the Intercontinental Hotel
in Time Square. The firm welcomes you to
meet the public company entrepreneurs that
will drive investor returns and create tomor-
rows jobs. n
PROFIT PLANNERS MANAGEMENT, INC.
Accountants & Business Advisors
A Micro-Cap Company Service Provider
We are entrepreneurs that understand
emerging growth companies
Outsourced CFO &
Controller Services
Budgets, Forecasts, Cash Flow Forecasting,
Financial Modeling
FASB/SEC Accounting Research
Management Reports
Financing
Strategy
Business Developement
Taxes
Tax Strategies for Corporations
Tax Strategies for Executives
Tax Preparation
Corporate Finance
Reverse Mergers and IPOs
M&A Deal Structuring/Due Diligence
Access to Funding Sources
(Pipes, Debt, Stock Loans, Factoring, etc.)
US Exchanges
European Exchanges
SEC Reporting &
Compliance
SEC Filing (10K, 10Q, 8K and
Registration Statement)
SEC Comment Letters
Intermediary with SEC and Auditors
Sarbanes Oxley Compliance for
Small Public Companies
Technical Research
www.ProfitPlannersMgt.com
Manhattan:
350 Madison Avenue, 8th Floor
New York, NY 10017
Beverly Hills | Ft. Lauderdale | Marina del Rey
a public company: PPMT
MANAGEMENT, INC.
My relatives wanted to put him in a
nursing home in Florida. They wanted to
drain his accounts, put him on Medicaid
and split up my mothers jewelry. When it
became evident I wasnt about to do any of
that, they insisted on taking him. Based on
their prior behavior, I was not comfortable
with that arrangement either, so I had yard
sales, gave a ton of stuff away to shelters and
non-profits, packed up what he needed and
moved him to California with me.
I will never forget my father saying that
he still wasnt sure who he was going to live
with as we boarded the plane to California.
At that moment it became clear to me how
important it is for a responsible adult to take
control of a situation concerning an aging
parent who doesnt have a clear understand-
ing of what is going on.
Non-professional caregivers, as I was, face
countless difficulties. There is an endless list
that seems to grow by the day. Making sure
medication doses and times are properly
adhered to, noting down blood sugar levels,
diets and moods plus keeping track of urine
and bowel movements are daily necessi-
ties. Then there are the legal and financial
aspects, not to mention food and living
expenses along with insurance issues plus
Medicare and Medicaid. All the work that
goes into keeping ones own life together is
more than doubled, in most cases tripled,
Caregiving: Ready or Not
or Tag Your It!
I was living in Rome, Italy working in the
film industry when I got the call that ended
my life as I knew it. My father had collapsed
with congestive heart failure and pneumonia
in his home in Beverly Hills, Florida. Yes
Dorothy, there is a place called Beverly Hills,
Florida.
A few years earlier he had collapsed in
the middle of a parking lot and since he was
alone because my mother had died 4 years
earlier, I put all sorts of safe guards in his
home, including a Help Ive Fallen & Cant
Get Up system. Unfortunately, when my
father blacked out in his home, he was so
sick and disoriented he never pushed the
button. Luckily his visiting nurse came that
day and found him unconscious but alive,
sprawled on his bathroom floor.
As soon as I found out, I dropped every-
thing and ran to be with him. It was only
then I found out how sick he really was.
When I called him every Sunday, he con-
stantly insisted he was fine and he certainly
sounded all right. But, as so often happens,
he was not fine.
The doctors told me my father had 4,
maybe 8 months, to live. It was obvious he
could no longer live on his own. He was very
frightened and sure he was dying. He begged
me to promise I would not put him in a
nursing home as all his friends had died in
nursing homes. I promised him I wouldnt.
n By ELEAnoR vERA
A
s a young girl of 5 hiding behind a tree I was surprised when my best
friend, Alice, tagged me. Our favorite childhood game of Hide &
Seek would play out again many years later. At 50 years old I would sud-
denly be tagged again, but this time it was no game.
and if there are siblings or other beneficia-
ries involved it gets even more complicated.
Add the emotional strains and youve got a
perfect recipe for trouble.
Most people dont understand. Many sib-
lings who are not involved just assume their
sister or brother (the family caregiver) is
living scott-free and taking advantage of the
situation. They have no clue about the reali-
ties of their caregiving sibling. I wish I had
a dollar for every time Ive heard Well, my
sister or brother knows Im here for them. If
they need any help with mom or dad all they
have to do is ask. But, whenever we speak
they never say anything, so obviously every-
thing is fine. These people dont understand
that their caregiving sibling will rarely admit
that they are overwhelmed and depressed.
They too believe they should be able to take
care of the situation without help, until they
have a breakdown.
In actuality non-professional caregivers
for the elderly are not prepared for, and in
many cases are not equipped to handle the
enormous array of responsibilities and pres-
sures placed upon them. Most are depressed,
isolated and become emotionally as well as
financially depleted.
Just like having a child, the duties and
needs are endless. The difference is a child
is beginning life and a parent or loved one is
ending life. To sacrifice for a child is to do so
for the future. Sacrificing for a parent is the
ultimate giving back. Its a solemn tribute
to the person who sacrificed for us when we
were weak and vulnerable.
After 12 years of caregiving various fam-
ily members and friends I understand what
goes into caregiving as well as what the
non-professional caregiver faces. It is why
I have created two new, interactive web-
sites for family and friend caregivers, called
Active Caregiving (ACG) and its sister
site, in Spanish, Ayuda A Los Que Ayudan
(AALQA.)
This special group of caregivers has
distinctive needs of their own. ACG and
AALQA are dedicated to supporting them
from the beginning of their journey to the
end. We provide access to late breaking news
and information on an extensive variety of
senior topics and issues. A safe place to dis-
cuss true feelings and interface with others
is another service we provide through a Face
Book type meeting place and interactive
support groups. Each group session incorpo-
rates apx. 6 - 8 active caregivers along with a
licensed professional leading the group.
A large Shopping Cart with a wide variety
of products and services geared toward the
needs of our caregivers helps relieve stress
while saving time and money. Its a One-
Stop-Shop with items that have been tested
and reviewed by actual caregivers. Lighten
Up has funny clips of Senior Moments.
The Senior Pets blog along with Seniors
and Their Pets addresses problems that
many families face. The Intrepid Traveler
helps families enjoy travel with their seniors.
Ellies Tips area is filled with helpful advice
and suggestions. We are Green and encour-
age our caregivers to recycle their excess sup-
plies by listing them in our Pay It Forward
Recycle section.
Every area in ActiveCaregiving.com
and AyudaALosQueAyudan.com directly
addresses a need and openly encourages
caregiver participation thereby increasing
content exponentially. We strive to meet the
needs of all our caregivers.
Eleanor Vera - Active Caregiving, Inc.
Founder and Chief Executive Officer
Active Caregiving, Inc. was conceived and
is owned by Eleanor Vera, a bilingual for-
mer television creative director, advertising
executive, and film industry special effects
associate who has 12 years of personal non-
professional caregiving experience. In the
course of caring full-time for her father,
who was ill with Parkinsons disease, amyo-
trophic lateral sclerosis (ALS), Lou Gehrigs
disease, diabetes and dementia, she was a
Talkline Volunteer Counselor and Co-Chair
for Women Helping Women Services at the
National Council for Jewish Women, as well
as serving on the organizations board of
directors. Additional years of primary care-
giving for two elderly cousins and two elder-
ly friends led Eleanor to reach out to other
caregivers through discussion and market
research studies, during which she learned
that most people providing these servic-
es informally were feeling overwhelmed,
burned out and isolated, and in some cases
were possibly suffering from post-traumatic
stress.
While serving as marketing director for
St. Liz Hospice in Los Angeles, Eleanor was
introduced to various professional senior
product and service organizations based
in Southern Californiaorganizations she
did not know even existed when she needed
them most. She identified two major prob-
lems: 1.) these organizations were having
difficulty reaching their target audience, and
2.) non-professional caregivers desperately
needed the information, products and ser-
vices these organizations offered.
Further inspired by the personal stories
of other caregivers, Eleanor conceived a
bridgea full-service online community
for family and friend caregivers that is a
conduit for promoting local business, public
education and a better understanding of
this increasingly critical topic. Eleanor has
created in ActiveCaregiving.com an online
business model that generates revenue while
assisting and empowering nonprofessional
caregivers through their caregiving journey.
This model connects caregiving industry
service providers and product distributors
directly to their target marketthe nonpro-
fessional, decision-making caregiver.
For more information go to: www.
ActiveCaregiving.com n
ing every deal similar to multiple offers on
residential homes in the California boom of
the 2,000s. So let me summarize, U.S. inves-
tor cash going into China for paper (equity)
and even more cash going to China from
selling Chinese products into the US market.
I will cut to the chase, we all know the Chinese
bubble burst. Headlines of accounting fraud
are rampant as both investment banks and
holders of Chinese paper count their billion$
lost. Law firms are closing their Chinese prac-
tices as fast as they can get to the airport and
catch a plane. Accounting firms are dropping
like flies joining lawyers in hunkering down
with their insurance carriers to review their
mal-practice and D&O policies. Board room
decisions cried abandon ship! Leave town!
Run for the hills. Lets get out of Dodge with
our boots on! The SEC investigations explod-
ed as China imploded. With all the excitement
and expectation of riches gone, hate replaced
love of China deals. Abandonment of China
caused investors to trample each other at
the exit. As usual in these matters, Chasing
Chinese IPOs, reverse mergers, PIPES and
Registered Directs was replaced by joining
class action lawsuits and searching for deep
pockets for recovery. The bad Chinese deals
infected all the deals done in China or on
the calendar to be completed. With the luster
lifted like the cash from US investors pockets,
China got real ugly, real quick to the masses.
I have heard that China is dead in the US
and no Chinese deal will get financed in
the U.S. for at least three years and all
the former China practices are scratching to
find business elsewhere to keep their doors
open and insurance payment premiums
F I n A n C E
A S K M R . WA L L S T R E E T
When Did I Become
a Contrarian?
Over the course of history the street loses its
sense of financial values resulting in pumped
up ballooning stock price valuations which
eventually get filled with too much hot air
and then burst. It happened to the dot coms,
it happened in derivatives and it occurred
in bundled and bungled mortgage baskets
leading to the fall of Lehman and the cheap
price for the Bear. Recently investment bank-
ers, desperate for fee income, after seemingly
running out of US companies to hand over
bags of money to, abandoned America for the
looming riches of China. US investment bank-
ers threw caution to the wind racing to boost
their frequent flier miles chasing Chinese
companies in places they couldnt pronounce.
I have been a fan of China and admire how
it virtually jumped from feudalism to impe-
rialism in record time. Even more impres-
sive is the level of temptation and attrac-
tion for investment bankers to see for them-
selves whether or not China is as advertised.
Ultimately like moths being drawn to light,
doing business in the new land of opportu-
nity due to population, sheer size and market
need was just too tempting for them to resist.
As the Tiger began to grow from baby cub
to adolescent, I also watched Chinese com-
pany values take off to unrealistic numbers
as troves of cash left the US and landed
in the hands of first generation entrepre-
neurial capitalists in China, from Beijing
to Xinchen, from Shanghai to Nimbo. The
competitive and comparative advantage of
China over the U.S. began with cheap labor
and ran all the way to modern science leader-
ship, market share dominance in smokestack
industries and rare earth element market
control. Over the last decade China soared
economically fueled by foreign investment
capital. China became the wild wild far east
to bankers, transactional attorneys, CPAs,
investor relations firms, financial experts
and ultimately a major cottage industry was
formed: taking Chinese companies public in
the U.S. through recycled shells and freshly
created financial vehicles. Eventually China
attracted money carpetbaggers as well as
the professionals who were competing with
one another as they stumbled all over each
other to grab deals and investment bank-
ing market share. Most notable as in other
bubbles, dependence on upside potential
and the disregard of downside risk, many
investment bankers forget to stick to their
knitting neglecting their conducting prudent
due diligence. Instead of using tried and
true forensic accounting methods, Chinese
accounting or multiple books accounting,
left a huge GAAP as the American bank-
ers received numbers they wanted to see,
and in reality who can blame the Chinese
for giving them what they asked for? Why
not? Loaded with cash and hunting for bear,
American investment banks began funneling
billion$ into Chinese company equity, chas-
paid up to date. In many ways I agree
that the ax has not fully fallen yet for sure.
As Lance Kimmel has stated in a previous issue
of Micro-Cap Review magazine, Around
June 2010, the SEC and PCAOB started send-
ing out informal inquiry letters to accounting
firms, asking for voluntary cooperation with
a fact-finding process about their practices
involving Chinese public company clients.
Now here is the shock of it all, China is still
China! I have visited China many times but
my foothold never reached more than beach-
head proportions unlike the many before and
after me who are now licking their wounds.
So why I am now a contrarian? Because
today I like China more than ever; although
in damage control mode, all the great promise
of China, the multitudes of made and lost
money from the corporate deluge replete
with forthcoming regulatory intervention
and horror stories. The over reaction will
cause the pendulum to swing China further
out of regulatory and financial favor as the
last of the Mohicans end their wild forays in
China and run with their tiger tail between
their legs back to their origins, to start over.
This abandonment is new opportunity for
the new Chinese boom to get started. Chinas
economy didnt collapse but rather it con-
tinues to flourish. Lost opportunity will give
way to new opportunities for a new cadre of
entrepreneurs who like the Chinese entrepre-
neurs witnessed a ton of butt kicking creating
scars that are healing as I write this article.
I for one am heading back to China, my
reputation intact, hope to find a welcome
mat at my feet. The carpetbaggers have come
and gone, and big lessons have been learned
by the Chinese. Today the business mood is
positive and retrenching. I have no grandi-
ose ideas just simple desire to develop part-
nerships for marketing and sales. Concepts
of reverse mergers and PIPE financings are
now ancient history like the Ming dynasty
and what will now rise in China is relation-
ship building based on mutual trust and
prudent guidance. The incredible market of
China has grown in so many ways from les-
sons learned, that the next wave of business
must be slower, more orderly, and based
on cooperation and organic methodologies.
So as all the bearishness in the marketplace
toward China prevails I have never been
more bullish on China in my entire career in
finance. This contrarian opinion of mine sets
me apart from the losers who left China in
a hurry who will not be welcomed back too
soon. Their breach of trust as well as their
breach of good conduct will make it extreme-
ly difficult for those wanting to newly enter
China today but it is also potentially filled
with amazing rewards. So this contrarian
believer will tidy this sentiment up with men-
tion of an old adage: it is not the money you
make but rather the money you keep. I am
ready to participate in the maturation process
of a nation, and the process of a new China
in history which will pride itself on mutually
cooperative relationships with solid under-
footings and long-term wisdom as its guide. n
Angiogenic Therapy:
Leading the Revolution
into New Frontiers of
Cardiovascular Medicine
GENERX
CARDIUM
MEDICAL OPPORTUNITIES PORTFOLIO
Cardio-Chant
New Global Pathways
NYSE Amex: CXM
www.cardiumthx.com
n By JEB hAnDWERgER
indeed be at the expense of co-opting foreign
intellectual properties.
Beijing has a long history of copying
trade secrets. We need to look no further
than expropriating missile secrets during
the Clinton Administration or exporting
our rare earth industries thirty years ago.
After all China possesses many American
dollars to attract hungry foreign entities
which are in a battle for industrial survival.
It would not be remiss for them to look over
the shoulders of their invitees, which may
explain partly the Chinese largesse. This
may be the hidden motivation as to why the
Chinese are allegedly unable to meet their
stated quotas.
Additionally, industrial end users from
Whats Really Going On With
The Rare Earth Exports?
I
t is possible that China is playing politi-
cal chess with its rare earth strategies.
They assert that they cant provide the
world and at the same time themselves with
this precious material. In a world of geo-
politics, what is stated may be subterfuge
for hidden agendas. China claims that
domestic, environmental concerns underlie
their decision. They are on record that they
are withholding licensing from Baotou, their
largest producer based on environmental
considerations. However, they have given
the green light to approximately eleven other
companies. It remains to be seen whether
this particular play is in fact a diversionary
tactic to control world supplies.
Instead, they are actually luring foreign
companies to relocate their plants to China.
They have recently announced that they will
be unable to follow through on their stated
plans announced at the beginning of the
year of forecasting approximately 30K tons
of rare earth exports. Instead, they exported
only half that amount claiming that there
has been a dearth of world demand.
However, this apologia does not correlate
with reality. It is interesting that they are
actively luring sovereign foreign industries
to build factories in mainland China. They
are using the enticements of cheap prices
of labor, materials and plant construction.
These inducements may come at a deceptive
cost, reminding one of the ancient story of
The Spider and The Fly, as the trade-off may

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The West are rejecting the Chinese seduc-
tion and are beginning to look for friendly
jurisdictions, in which they can participate
as stock holders, rather than supplicants
paying inflated export prices. This prece-
dence is already beginning to take place. For
example, The Koreans have partnered with
Frontier Rare Earths (FRO:TSX) in South
Africa, and the Japanese have allied with
Matamec (MAT:TSXV) in Quebec, Canada.
Importantly, the United States Department
Of Energy recently released a report which
highlights the risks of supply shortages in
specific rare earths particularly dysprosium,
terbium, europium, neodymium and yttri-
um. The report recommends that, ...taking
steps to facilitate extraction, processing and
manufacturing here in the United States, as
well as encouraging other nations to expe-
dite alternative supplies.
Likewise, the recent decision by the
Chinese to differentiate between light and
heavy rare earths in its export quotas dem-
onstrates that the Chinese are on record that
they themselves recognize the vital impor-
tance of the heavies. The world is realizing
that not all rare earths have the same supply-
demand characteristics. It is in fact the rare
earths outlined by the Department of Energy
which are most at risk of a supply shortage.
Gold Stock Trades has been constantly
reminding its subscribers that such action
on part of the U.S. government is imperative
and overdue. We have been emphasizing the
importance of dysprosium and neodymium
which are used in the permanent magnets in
wind turbines and hybrid/electric cars.
This relates to another vital development
in the rare earth saga concerning the entry
of General Electric into building what they
term as transformational offshore wind
turbines. This requires a large amount
of neodymium and dysprosium, which are
unique and inimitable. The question arises,
where will GE get these rare earths from? It
is hoped that they will approach friendly and
indigenous sources of heavy rare earths.
Two of our current buy recommenda-
tions could provide abundant, close at hand
sources of heavy rare earth supply with less
international wheeling-dealing with Beijing.
Our chosen equities are Ucore (UCU:TSXV)
and Tasman (TAS:NYSE), which could go a
long way freeing the West from the game of
Chinese checkers.
Ucore has already defined the largest heavy
rare earth 43-101 compliant resource on U.S.
soil. Similarly, Tasman is the only heavy rare
asset on the European land mass.
The purported kingpin Molycorp
(MCP:NYSE) has yet to define a heavy rare
earth asset. We await their developments
in this area. They just have begun explor-
ing and the process may take years, while in
the case of Ucore and Tasman, the 43-101
resource is a fait accompli and are contigu-
ous to advanced infrastructure with ready
access to transportation.
Both Ucore and Tasman are scheduled to
release a Preliminary Economic Assessment
by the end of the first quarter 2012 outlining
some of the specific mine development plans
and placing a value on the resource. Gold
Stock Trades will publish updated reports on
these two companies in early January.
In conclusion, important factors in the
ongoing development of the rare earths are
continuing to take shape. Certainly, the
U.S. green-lighting this sector is significant,
which we believe will help Ucore. We hope
something similar is occurring in Europe.
It is beginning to enter Western conscious-
ness that emancipation from the Chinese
hegemony is vital for industrial and military
survival. We look forward to the year 2012
and the continuing maturation of the rare
earth industry. Major industrial companies
may well seize the bit in increasing merger
and acquisition activity with our promising
rare earth candidates. n
Gold Stock Trades Editor Jeb Handwerger is a highly
sought-after stock analyst and writer syndicated
internationally and known throughout the financial
industry for his accurate, in depth and timely analysis
of the general markets, particularly as they relate to
the precious metals, nuclear and rare earth sector.
Jeb utilizes both fundamental and technical analysis,
especially daily and weekly price volume action to
understand the long term macroeconomic trends. A
true renaissance man Jeb has a strong background in
religion, politics, mathematics, education, engineer-
ing, mining, theater, film and science. Subscribe to
his FREE Newsletter at http://goldstocktrades.com.
The resource estimate also represents an
approximate 100% increase in gold resourc-
es from a previous NI 43-101 released in
late 2009, which reported 618,000 Oz. Au
Inferred and reflects the successful comple-
tion of drilling programs the past 4 years.
To date, these drilling results cover only 25%
of the most promising mineralized areas of
the property with 75% still yet to be drilled.
Senior technical personnel believe the poten-
tial exists for SJG to host in excess of 3 mil-
lion Oz. gold.
net Present vaLue
DYNRs 50% share of DynaMexico has a
net present value of $133 million, based
on projected production of 100,000 Oz.
Au per year, an 8% discount rate, $1,350/
Oz. Au, $450/Oz. operating cost, and 10
year mine life. With approximately 10.5
DynaResource (OTC BB:
DYNR) - Ready to Shine
U
nlike many other junior explora-
tion and mining companies that
seem to spend more time promot-
ing their stock than finding and extracting
minerals, DynaResource, Inc. has spent 11
years quietly laying the groundwork neces-
sary to become a successful gold producer.
DynaResource is based in Irving, Texas and
its 50% owned subsidiary, DynaResource
de Mexico (DynaMexico), possesses min-
ing concessions covering high grade gold
properties in the San Jose de Gracia (SJG)
District in northern Sinaloa State, Mexico
and recently completed $18 million in drill-
ing / exploration programs. The drilling pro-
grams have defined over 1 million Oz. gold
resource that will be aggressively pushed
towards production.
Drilling programs at SJG through March
2011 have defined an NI 43-101 compli-
ant resource estimate of 402,092 Oz. Au
Indicated and 740,911 Oz. Au Inferred using
an underground mining cut-off grade of
2 grams/ton with an average gold grade
of 5.68 g/t for the Indicated and 5.83 g/t
for the Inferred. With DynaMexico having
defined over 1 million Oz. gold resource,
DynaResource is eager to raise its profile with
the investment community as DynaMexico
moves towards production, while expecting
to expand overall resources through future
drilling and development.
PRoFILED ComPAnIEs
DynaResource, Inc. (OTCBB:DYNR) As of Jan 12, 2012
Stock Price $4.15
52 Week Range $4.95 / $3.25
Shares Outstanding 10.6 million
Market Capitalization 43.9 million
DRILLING PROGRAMS AT SJG
THROUGH MARCH 2011 HAVE
DEFINED AN NI 43-101 RESOURCE
ESTIMATE OF 402,092 OZ.
AU INDICATED AND 740,911
OZ AU INFERRED USING AN
UNDERGROUND MINING CUT-OFF
GRADE OF 2 GRAMS/TON.
mining equipment in order to commence
pilot production operations.
DynaMexico operated a pilot mining
production activity at SJG from 2003 - 2006
which confirmed metallurgy at the San
Pablo area, and produced excellent recover-
ies of up to 95% of contained precious met-
als, in a basic gravity and flotation circuit.
During that time, DynaMexico produced
18,250 Oz. Au from 42,000 tons milled ore,
at an average feed grade of 15 to 20 g/t and
believes the startup of major mining pro-
duction activities at SJG would simply be a
scaling up of the recent pilot production
activities.
Dynamexico sJg ni 43-101
resource estimate
Mr. Ramon Luna of Servicios y Proyectos
Mineros de Mexico in Hermosillo, Mexico
million shares outstanding, that equates to
over $12.50 per share. Prior to the recent
release of the updated 43-101 resource
estimate, DYNRs market capitalization
was approximately $43 million ($4.15 per
share), with the market implicitly valuing
DYNRs gold resource at less than $60/Oz.
of gold in the ground. Competitors of the
Company trade at an average of over $300/
Oz. As investors become more familiar
with the companys assets, its likely that
DYNRs market capitalization will reflect its
resource being valued more in line with its
competitors.
the ProPerty
The SJG District is comprised of 33 min-
ing concessions covering 69,121 hectares
(171,802 acres) and is located within the
Sierra Madre gold-silver belt where the
majority of hydrothermal deposits in
Mexico are located (See Map below).
The SJG District has reported histori-
cal production of over 1 million oz. gold
since its discovery in 1828, from numer-
ous underground workings; 471,000 Oz.
were reported produced at La Purisima,
at an average grade of 67 g/t; and 215,000
Oz. were reported produced from the La
Prieta area, at an average grade of 28 g/t.
The main mining period at SJG occurred
from 1890 - 1910, and prior to the Mexican
Revolution.
Since its incorporation in 2000,
DynaMexico focused on acquiring and
consolidating fragmented mining conces-
sions comprising SJG, and at year end 2003
DynaMexico had completed the acquisition
and consolidation of the SJG District. In
mid 2002, DynaMexico refurbished old mill
facilities and installed additional milling and
was commissioned by DynaMexico as
the Qualified Person to compile the NI
43-101 compliant Technical Report for
SJG, and Mr. Robert Sandefur, a reserve
analyst at Chlumsky, Armbrust & Meyer
LLC. (CAM), was commissioned by
DynaMexico as the Qualified Person to com-
pile the Resource Estimate for SJG. Mr. Luna
is also the QP for the OCampo Project in
Chihuahua State, Mexico, - a multi-million
ounce gold and silver property owned by
AuRico Gold (NYSE:AUQ). Mr. Luna was
commissioned because of his prior experi-
ence at OCampo, and because of similari-
ties observed between the OCampo and SJG
Properties. CAM and Mr. Sandefur were com-
missioned as respected industry professionals
to confirm the resources defined by recent
drilling/exploration programs at SJG. Mr.
Sandefur calculated resources at SJG consider-
ing an underground mining cut-off grade of
2 g/t Au, and reported - Indicated Resources
of 402,092 Oz. Au at an average grade of 5.68
g/t Au, and Inferred Resources of 740,911 Oz.
FROM 2003 TO 2006,
DYNAMEXICO PRODUCED 18,250
OZ. AU FROM 42,000 TONS
MILLED ORE, AT AN AVERAGE
GRADE OF 15-20 G/T AU.
San Jose de Gracia Major Target Areas and Resources
Au at an average grade of 5.83 g/t Au. The
gold resource estimate at SJG is approximately
88% of the total Au equivalent resource (which
includes silver, copper, lead, zinc).
mineraLiZation
DynaMexicos recent drilling programs at SJG
consisted of 298 core holes for a total of 68,428
meters with total drilling and related explora-
tion costs of $18 million. The majority of the
drilling was conducted at San Pablo and Tres
Amigos, and also La Union and La Purisima.
All major targets remain open for extensions
along strike and down dip. Highlights of
drilling at major target areas are shown below:
San Pablo: SJG 07-031 - 8.3 M @
48.24 g/t Au; 08-051 - 14.2 M @ 14.79 g/t
Au; 09-139 - 5.5 M @ 20.51 g/t Au; 10-203
- 5.5 M @ 332.86 g/t Au; 10-217 - 1.42 M @
89.95 g/t Au;
Tres Amigos: SJG 97-013 - 27.5 M @
9.94 g/t Au; 10-151 - 11.95 M @ 14.66 g/t
Au; 10-179 - 1.72 M @ 105.51 g/t Au; 10-
226 - 8.04 M @ 18.47 g/t Au; 10-230 - 4.54
M @ 18.09 g/t Au;
La Union: SJG 08-76 - 4.8 M. @
16.02 g/t Au; 10-216 - 2.96 M. @ 12.36 g/t
Au; 10-223 - 3.52 M. @ 10.24 g/t; 11-256 -
1.24 M. @ 144.08 g/t Au; 11-298 - .70 Meters
@ 49.39 g/t Au;
La Purisima: SJG 07-021 - 8.0 M @
20.67 g/t Au; 07-039 - 4.2 M @ 8.55 g/t Au;
10-161 - 7.6 M. @ 4.64 g/t Au.
best goLD ProJect in
sinaLoa
DynaMexicos SJG property was recognized
as the best Gold Project for the year 2010 by
the State of Sinaloa, at the June 2010 mining
conference in Mazatlan, Sinaloa. At the same
conference, US Gold was recognized as the
best Silver project for year 2010 for its El
Gallo Project.
the Future
Structure / Management
DynaMexico owns 100% of SJG, with 50%
of the outstanding shares of DynaMexico
held by DYNR and 50% held by Goldgroup
Mining, Inc. DynaMexico has entered into
an agreement with Mineras de DynaResource
SA de CV. wherein Mineras has been named
the exclusive operating entity at SJG. DYNR
owns 100% of Mineras and the Chairman/
CEO and CFO of DYNR are the President
and Treasurer of Mineras and DynaMexico.
Preliminary economic assessment
DynaMexico expects to commission
Preliminary Economic Assessment (PEA)
reports in the first quarter of 2012, which
are expected to confirm the positive eco-
nomic analysis for commencing production
activities at SJG. The PEA(s) could describe
two production options, one for high grade
underground mining and milling (using a
cut off grade of 2 g/t) and another for open
pit mining and heap leach production (using
a lower cut off grade). DynaMexico projects
the start of production at SJG within 12
months after receipt of the completed PEAs.
Once fully operational, DynaMexico should
be producing 100,000 oz gold per year at a
projected average cost of less than $450 per
Oz. DynaMexico estimates a total capital cost
for start up of the underground mining and
milling operation of approximately $50 mil-
lion, which is expected to be confirmed in the
upcoming PEA(s).
exploration - expansion of
resources
DynaMexico expects to expand and increase
resources at SJG through continued drill-
ing programs, as all major deposit areas are
open along strike and down dip. DynaMexico
estimates that it has explored only 25% of
the primary mineralized areas of SJG, and,
DynaMexico sees the potential of defining new
resource areas throughout the vast SJG District.
Potential Project value
DynaMexico has established company goals
of producing 100,000 Oz. Au annually and
expanding total resources to over 2 million
Oz. Au within the next 36 months. DYNR,
through its ownership of 50% of the com-
mon shares of DynaMexico and 100% of the
operator Mineras, believes the upside poten-
tial for its shareholders could be substantial.
Unique Opportunity
DynaResource is currently unknown and
evolving from exploration to production while
its 50% subsidiary DynaMexico continues to
develop and explore its existing property with
experienced personnel and infrastructure in
place as well as maintaining strategic alliances
and relationships with local and state officials.
Once in production, DYNRs 50% com-
mon share ownership of DynaMexico and
its 43-101 compliant resource estimate
(402,092 Indicated Oz. gold and 740,911
Inferred Oz. gold, using an underground
mining cut-off grade of 2 grams/ton) should
produce significant, steady cash flow and
profits. Importantly, DYNR management is
focused on minimizing dilution to its loyal
shareholder base and intends to implement a
high dividend payout ratio. With a resource
of over 1 million Oz. Au, with average gold
grade of over 5.68 grams/ton and with
75% of the SJG project still unexplored,
DYNR offers shareholders and investors the
opportunity for near term production of a
substantial mineral resource and the oppor-
tunity for future expansion, exploration and
discovery. n
DynaResource (OTC BB: DYNR)
Undiscovered, undervalued, and emerging as a shining gold star.
Pacific Rim chambeR of commeRce and business council

January, 2012
Te PRCC and American International Business Council has been
in business since 1996 helping SMEs (Small and Medium Sized
Enterprises) around the world relocate and/or expand their interests
through a process of legal, accounting and networking services.
During this period of time we have associated with over 15,000
SMEs and afliates in 14 countries! www.aibc.us.com
Obviously with the present focus on the relations between the USA and China,
we have been extraordinarily busy helping companies on both sides grow exponentially with
the help of our relationship with the CCPIT (China Council For the Promotion of International
Trade) www.ccpit.org
China Council for the Promotion of International Trade (CCPIT) is also called China
Chamber of International Commerce. China Council for the Promotion of International
Trade (CCPIT) comprises VIPS, enterprises and organizations representing the economic
and trade circles in China. Te aims of the CCPIT are to operate and promote foreign trade,
to utilize foreign investment, to conduct activities of Sino-foreign economic and technological
cooperation, to promote the mutual understanding and friendship of economic and trade
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2012, the Year of the Dragon, represents a tremendous
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for information: info@snnwire.com
stocks which would be the last assets to be
dumped when everything seemed so bad.
Interestingly, when things were this bad, the
volatility in micro-cap stocks was washed
out of the system, leaving very small price
points quite attractive from a risk perspec-
tive the call option idea in action.
Historical reference tells us another story
alongside the 2002 example. Firstly, we
notice that the Russell Microcap Index
bounced right back in 2003 with a powerful
66.36% return compared to the weakest rela-
tive performance form the Russell Top 200
Index which generated a 26.68% return. If
this doesnt make 2011 sound painful, then
we dont know whats worse.
When cycles turned in 2004, and all stocks
were lifted by a full-blown recovery, smaller-
cap stocks were left more vulnerable to the
interest rate upward revisions which are
very typical during the stronger years of a
recovery cycle. Looking again at the Russell
data, micro-cap stocks instantly fell to the
worst relative performance among all of
their categories in 2005, drifting lower on
higher interest rates which turned the corner
in 2004. The Federal Reserve nudged the fed
funds rate from an average monthly target
rate of 1.00% in Q4 2003, to a monthly aver-
age of 1.43% one year later, a whopping 43%
increase in the underlying cost of capital to
the entire banking system, before jumping
to a 2.47% monthly average in Q1 2005, or
a 250% jump in the fed funds rate. Simply
put, there was no way micro-caps were not
going to feel this.
The biggest pivot point in the micro-cap
stock story continues to be the battle over
trading volume in an anti-volatility, liquidi-
ty-fixated trading environment.
Thinner volume stocks seem to invite inves-
tor obsessions with single event catalysts,
looking for nuggets of news and develop-
ments that make it safe to swim in thin trad-
ing waters. The cost of hedging lower prices
stocks often makes little sense when the next
major market downturn has the power to
make a large number of lower priced micro-
cap stocks into call option equivalents, invit-
ing speculation and risk-taking with a poten-
tially lowered demand for critical company
information the lifeblood of the future price
direction of most stocks at any time, in any
industry, and during nearly any market cycle.
On the other hand, major downturns such as
the severe slump during August to October
2011 turn distressed micro-cap assets into
serious trading liquidity tests, sending lower
priced assets into a dangerous price tailspin,
throwing future operating prospects out the
n By RIChARD D. hAsTIngs, CCE
MaCro aND CoNSuMer StrategiSt
gLoBaL huNter SeCuritieS
The Top Down Opportunity
for Micro-Caps in 2012
T
he micro-cap stock universe walks into 2012 asking what should their stocks
start doing to crank up the volume.
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window in favor of stability in the markets
bid-ask equilibrium. And in the micro-cap
universe, price equilibrium plummets close
to the ground during major downturns, like a
hawk zeroing in on its tiny ground-level prey
at about 120 miles per hour.
2012 is not going to forget the August
October 2011 downturn. And this is what
micro-caps do: they reflect the outer vola-
tility bands of the market much stronger
than mid-caps, and especially stronger than
defensive big-caps.
We have to put this theme into focus in
order to determine the historical relative
performance of micro-cap stocks compared
to other stock market capitalization catego-
ries. Data obtained at the Russell Investments
website indicated a rather strong cyclical
trend, with significant sector reactions to
interest rate changes and to total market vol-
atility. During 2001, 2002 and 2003, micro-
cap stocks enjoyed the best relative perfor-
mance each year and this included 2002
during which most market capitalization
categories generated very poor year-over-
year performances. The Russell Microcap
Index was the best relative performer in
2001, cranking out a 17.58% year-over-year
increase compared to the worst Russell index
performance, the Russell Top 200 Index
which generated a -14.57% return over the
prior years close.
From this historical episode we learned
that micro-cap could outperform on a very
relative basis, when the conditions were
just downright wrong for big cap, defensive
Meanwhile, fuel prices sloped much high-
er during 2004 and 2005 before spiking in
late 2005 at Hurricane Katrina, signaling a
big jump in fuel surcharges for FedEx and
UPS ground and jet freight, in addition to
increased costs for longer-range refrigerated
ground shipments. The effect on operating
income due to higher interest rates and
transportation fuel costs signaled a change
in the foundations underneath micro-caps,
thus going far to explain why micro-caps
could have underperformed other market
cap categories in the middle of a recovery
cycle.
This is instructive to our view about
micro-caps during 2012 and 2013. We do not
expect interest rates to budge during 2012.
Global demand for easy access to central
bank credit has been engraved into the sides
of the policy pyramids, indicating every-
body on the planet with the power to make
it happen (The Fed, Bank of Japan, Bank
of England, European Central Bank, Swiss
National Bank and the Bank of Canada) will
force rates as low as possible throughout
2012. The alternative is political upheaval,
social unrest and loss of power. The inter-
est rate story takes one piece of downside
volatility for micro-caps off the table, in
our strategy view for 2012. Interestingly,
monetary policy actions have contributed
to higher monetary inflation especially since
2003. Simply put, if you crank out enough
paper money year after year, then it inevita-
bly exceeds to the number of transactions in
commodities and forces commodity prices
higher. Margins then come into focus as a
major area of concerns for the micro-cap
universe.
The prospects for margin damage from
inflation is however a serious problem for
the micro-cap universe. Higher cost of goods
means smaller companies must cover this
with a greater increase in sales growth, and
they must sometimes have to figure out
how to muscle market share away from
much bigger, existing companies without
hurting earnings growth trends. In some
cases, micro-caps come to the game with
strong innovation and strong differentiation.
Others may come to the growth game with
higher-than-peer debt-to-equity ratios and/
or higher debt-per-share metrics. This puts
the latter stocks onto a higher volatility ramp
when recovery cycles hit the interest rate
bump, and investors have to worry about
trading liquidity when and if this happens.
Within the typical micro-cap universe,
there are a few instructive sectors to talk
about which seem to describe an inter-sector
ecosystem. Looking at the iShares Russell
Microcap Index Fund (an ETF which tracks
the Russell Microcap Index), financials rep-
resented 26.79% of all holdings as of Dec.
31, 2011, followed by healthcare at 18.01%,
Technology at 13.71% and Consumer
Discretionary at 12.69% of all fund hold-
ings. During recovery cycles, assuming there
is no major interest rate bump, then some
of these financials could improve, but only
if they have the ability to create more loan
growth. If retail sales grow at about 5% in
2012, then technology could grow by about
4% in 2012 since it is very sensitive to the
retail sector. Tech firms often are major bor-
rowers from financials, offset by somewhat
weak household loan demand (yet showing
hopeful signs of growth in 2012).
Therefore, some of the overall micro-
caps performance in 2012 could depend
on the financials-household-tech ecosystem.
If the household sector can demand loans
and make them perform, then things look
brighter in this large portion of the micro-
cap world. If the consumer does not hold
up, then we would be concerned that sales
growth at micro-cap consumer names might
not cover inflationary input costs. Some of
these risk themes are non-cyclical, impact-
ing these sectors along any spot on any type
of peak-to-recovery curve. All of this points
to competitive advantage, innovation, strong
financial management and a clear vision by
management to navigate short-term cyclical
fluctuations in interest rates and costs; and
for management to explain to analysts and
investors the most important story of all:
how their firms will get through a cycle and
get to the end zone of the next cycle three to
five years into the future, long after some of
these riskier passages have been successfully
overcome.
Despite many hopeful signs, great ideas
and cyclical timing, the buyside will remain
obsessed in 2012 with trading volume right
along with curiosity about longer-term
growth prospects, seeking evidence from the
market that its safe to jump in and espe-
cially safe if they want to get out. n
This material has been prepared by Global Hunter
Securities, LLC a registered broker-dealer, employ-
ing appropriate expertise, and in the belief that it
is fair and not misleading. Information, opinions
or recommendations contained in the reports and
updates are submitted solely for advisory and infor-
mation purposes. The information upon which this
material is based was obtained from sources believed
to be reliable, but has not been independently veri-
fied. Therefore, we cannot guarantee its accuracy.
Additional and supporting information is available
upon request. This is not an offer or solicitation
of an offer to buy or sell any security or invest-
ment. Any opinions or estimates constitute our best
judgment as of this date, and are subject to change
without notice. Global Hunter Securities, LLC and
our affiliates and their respective directors, officers
and employees may buy or sell securities mentioned
herein as agent or principal for their own account.
Not all products and services are available outside of
the US or in all US states. Copyright 2012.
For Canadian Investors: Global Hunter Securities,
LLC is not registered in Canada, but has filed for the
International Dealer Exemption in each province.
The information contained herein is not, and under
no circumstances is to be construed as, a prospectus,
an advertisement, a public offering, an offer to sell
securities described herein, solicitation of an offer
to buy securities described herein, in Canada or any
province or territory thereof. Any offer or sale of the
securities described herein in Canada will be made
only under an exemption from the requirements to
file a prospectus with the relevant Canadian securi-
ties regulators and only by a dealer properly registered
under applicable securities laws or, alternatively, pur-
suant to an exemption from the dealer registration
requirement in the relevant province or territory of
Canada in which such offer or sale is made. Under no
circumstances is the information contained herein to
be construed as investment advice in any province or
territory of Canada and is not tailored to the needs
of the recipient. To the extent that the information
contained herein references securities of an issuer
incorporated, formed or created under the laws of
Canada or a province or territory of Canada, any
trades in such securities must be conducted through
a dealer registered in Canada. No securities commis-
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reviewed or in any way passed upon these materials,
the information contained herein or the merits of the
securities described herein and any representation to
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n By ChRIs BERRy
Metal Market
Overview 2011
W
ords like Fukushima, fracking, carbon tax, or resource national-
ism dont elicit good feelings. Unfortunately these are some of the
themes that came to the fore in the commodities markets in 2011. What
follows is a brief overview of the metals markets in 2011 and our thoughts
on what direction these markets will take in 2012.
Despite my highlighting some of the neg-
atives in the market place, it wasnt all
bad news in 2011. Golds secular bull run
continued in 2011 with the yellow metal
posting another year of gains despite a
marked increase in volatility due no doubt
to increased paper trading. Silvers run to
nearly $50 per ounce in April excited the
market and has many silver investors believ-
ing that that top can be broken in 2012 if
industrial demand in the developed world
recovers and some clarity emerges between
the physical and paper markets.
A number of factors pushed gold and
silver higher in 2011 including flat supply
(annual gold supply has been flat glob-
ally since the early part of the last decade),
increased interest in buying bullion in the
Emerging World (China and India are nota-
ble examples), and central bank buying.
This last factor is of particular significance
since until recently, central banks were net
sellers of gold bullion. In the third quarter
alone, global central banks purchased a net
148.4 tonnes of gold. These are forecast to
push the total amount of gold purchased by
central banks in 2011 to 500 tonnes. When
Central Banks, known for printing paper
currencies, are using this fiat money to
acquire hard assets that retain their value,
it tells us something about the precarious
state of global financial imbalances and what
the future may hold for governments beset
by an overwhelming and insurmountable
debt burden. As 2012 approaches, we believe
answers to these questions as well as what
the future of the Euro Zone will look like,
are positive for the price of gold and silver
as well.
Other metals didnt fare quite as well.
The rare earth elements appear to have
peaked and are now reverting to a new
mean level that may reflect realization of
future supply as is the case in any bubble
scenario. We made the case earlier this year
for what we call the great reset in this
industry which will be characterized by
a rapidly shrinking number of rare earth
companies exploring for these elements,
substitution (some of these elements are
not critical after all), and price mean
reversion, amongst other factors. Looking
forward, we envision only a handful of
companies outside China who are success-
ful in raising sufficient capital to further
their exploration plans and solving the
complex and unique metallurgical issues
associated with each deposit.
Other industrial specialty metals like lith-
ium, vanadium and uranium had a rough
year for various reasons (Fukushima, lower
than expected adoption of electric vehicles),
but we expect this to reverse in 2012 and
beyond as the demand for affordable and
reliable electricity mounts faster than many
think it will based on several billion indi-
viduals joining the new global middle class.
The recent takeover of Hathor by Rio Tinto
is a hopeful sign of life in a beaten down
uranium sector.
Questions around copper, the metal with
the PhD in Economics, remained as the
mounting uncertainties surrounding the
global economy, industrial production, and
growth increased. The fortunes of copper
are tied to the fortunes of China plain and
simple. We note a recent study that reported
the copper intensity per person in various
countries. This is how much copper used in
a given country per person in kilograms. It
was interesting to see that per capita copper
intensity was almost the same in China and
the United States (5 kg per person in China
versus 6 kg per person in the US). However,
with US GDP per capita roughly 10 times
as large as that of China (in 2009), one can
infer that the copper intensity in China must
increase by an order of magnitude (10 times)
if China aspires to the same quality of life
in the United States (again on a GDP per
capita basis). This is clearly bullish for cop-
per prices in 2012 and beyond.
Turning briefly to geopolitics, it was a bad
year for dictators as Hosni Mubarak, Kim
Jong-Il, and Muammar Gaddafi all saw their
reigns come to untimely ends. On balance
we think the Arab Spring and similar events
are net positives for resource investing over
the long run, but what emerges to fill the
leadership voids in these countries will add
to uncertainty in the near term. Politics
and labor strife also remained prevalent in
the resource investing world. Two notable
examples were Freeport McMoRan who
declared force majeure on its Grasberg mine
in Indonesia (one of the largest copper/
gold mines in the world) and the Malaysian
government who bowed to domestic pres-
sure over Australian-based Lynas plans to
construct and operate a rare earth element
separation plant on its soil. Many other
examples could be cited. One thing is cer-
tain these types of incidents generated by
resource nationalism are sure to continue in
the face of escalating demand.
On the political front, the US Presidential
election in 2012 promises to divert our elect-
ed leaders attention. This may actually be
a good catalyst for resource investing going
forward as gridlocked politicians are forced
to focus on the election and not on crafting
legislation that kills jobs and puts the United
States further behind the rest of the world
with no domestic natural resource policy
(think about the ban on uranium mining on
the Arizona strip).
A change of leadership in China in 2012
also has implications. The country must
maintain its breakneck pace of growth for
the sake of internal stability while encourag-
ing domestic demand. This is necessary to
lessen the reliance on internal investment
in sectors such as real estate. The calls for
this rebalancing from inside and outside of
China are growing louder and have deep
seated implications for investing in natural
resource exploration and production com-
panies into 2012 and beyond.
China is the linchpin of global demand
for commodities. Having just returned from
a two week trip to southern China for meet-
ings with investors and fund managers, the
key worry there isnt a real estate bubble
(which is what the Western press would have
you believe). It is inflation. Chinas growth
to date has depended upon an export-led
boom where jobs are created manufacturing
low cost goods for export to other coun-
tries. As wage pressures build, manufactur-
ers are in search of the lowest cost place to
do business. If jobs arent plentiful in the
Middle Kingdom for those citizens aspiring
to a higher quality of life, social upheaval is a
possibility as China has not made the switch
to an economy fueled by domestic demand.
The good news is that despite the volatility
we have seen this year, many junior min-
ing stocks are so cheap that this may be the
second great buying opportunity for shares
in recent years (late 2008 being the other
opportunity). We look for experienced man-
agement, the highest-quality assets, strong
balance sheets with ample cash, and the
capability to manage dilution - so often the
death knell for junior mining companies.
Resource nationalism is another theme that
promises to stay front and center so finding
juniors with deposits in reliable jurisdictions
is a must. We think a focus on these factors
can help insulate against what is sure to be
another turbulent year in 2012 rife with both
risks and opportunities. n
With a life-long interest in geopolitics and the
financial issues that emerge from these relationships,
Chris founded House Mountain Partners in 2010.
House Mountain firmly believes that the emerging
Quality of Life Cycle emanating from Asia is a game
changer which will affect every one of us through-
out the world for decades. With that in mind, the
firm focuses on the intersection of three topics: the
evolving geopolitical relationship between emerging
and developed economies, the commodity space,
and junior mining and resource stocks positioned to
benefit from this phenomenon. Chris spent 15 years
working across various roles in sales and brokerage
on Wall Street before founding House Mountain
Partners.
Chris is widely quoted in the press and is a fre-
quent speaker at conferences in Canada, the United
States, Europe, and Asia.
Chris co-authors Morning Notes by Dr. Michael
Berry - a complimentary newsletter focusing to the
topics mentioned above.
He holds an MBA in Finance with an interna-
tional focus from Fordham University, and a BA in
International Studies from The Virginia Military
Institute.
Value Beyond Profit
on incentives solely associated with competi-
tion and maximum profit generation. This
strategy has now been sidelined for some
time due to the absence of large investments
in the biotech sector and should have been
better evaluated in the first place. The self-
ishness cause by this approach and increas-
ing expenditures in the healthcare system
became highly visible and evident with our
latest economic crisis. Perhaps denial or
ignorance was key in many offices along
with managers hoping to weather through
this crisis easily; however, the impact and
the resulting lay-offs in the pharmaceutical
industry is now upon them.
at a gLance
There are over 7000 different types of Rare
Diseases many of which are not considered
so uncommon. Together Rare Diseases are
not rare, because more than 23 million
people suffering in the US and over 30
million in Europe all of who will tax and
challenge our future social society. These
individuals with a Rare Disease constitute
a neglected group of patients living with
major health problems and social discrimi-
nation in modern developed countries. That
75% of these individuals are children, makes
it even more imperative that we act for them
and their families. Despite Orphan Drug
Laws through the last decade nothing major
has been accomplished for the majority of
these individuals. They have to live with a
strong social disadvantage due to their lack
of networks, unreliable knowledge about
their disease and limited highly expensive
treatment options.
cutting costs
Health care costs rose incessantly in the last
decade despite, or perhaps, because of the
innovations that allowed us to develop a
greater range of therapies. Nevertheless, 10
of the top innovations created in this phar-
maceutical pallet - for example in Germany
- have never successfully hit the market due
to the fact that the benefit to the patient
is too low and the price is to expensive
for health systems to cover. Numerous
attempts have been made by the US and
European authorities to stabilize costs and
so far with little effect. This has mainly been
in relation to home-made disease such as
obesity, diabetes, cardiovascular disease and
cancer. Many patients in the US have been
excluded form health care due to the therapy
costs associated with their Rare Disease. All
entities of the service providers such as
Hospitals, Pharmaceutical Companies and
Health Care Payers are part of the system
and the question arises as to what happens
when 7000 Rare Diseases are also entered
into this equation. Will a solution to this
crisis be in sight?
traDition versus change
The tranditional approach historically based
economic activity and medical innovation
n By DR. FRAnk gRossmAnn
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investment banking firms, boutique corporate finance outfits and specialized investment brokerages, along with providing valuable
services to its Associate Members, which includes institutional investors, hedge fund managers, securities attorneys, CPAs,
regulatory consultants and other domestic and international Industry professionals.
Since 1982
UPCOMING CONFERENCE
February 22-24, 2012
Le Pavillion Hotel
New Orleans, LA
More info at www.nibanet.org
The National Investment Banking Association thanks our
2011 Las Vegas Presenting Companies
The Percipience Real Estate
Opportunity Fund
the goLDen caLF
Despite the US Orphan Drug Act in 1983 and
similar EU Legislation in 2002, Switzerlands
political and economic community seems to
have ignored Orphan Disease longer than its
neighbouring Countries. Everything seemed
to be perfect at best. Meanwhile the reality is
that 450000 patients can no longer be ignored
and isolated from the rest of the healthcare
cake. Switzerlands executives have now heed
the establishment and creation of ideas and
programs with historical and traditional gusto
to recognise Orphan Disease. This land with
the highest standards in healthcare service
and therapy received a wake-up call by the
National Courts decision in September 2011,
whereby the vested interests of the pharma-
ceutical industry must be subordinate to the
overall interests of the health and social system.
measuring success
The cost-benefit ratio is an important meas-
urement of our over-inflated healthcare sec-
tor. Creating new and costly innovations
only exacerbates this problem. An aligned and
short-term profit micro-economic approach
no longer appears to be timely especially since
macro-economic correlations and depend-
encies are better known and identified. A
marginal attempt at creating or aligning
with Corporate Social Responsibility for the
leading firms is only part of the approach.
Complex problems need creative, innovative
and well thought through solutions. Success
measurements need to be redifined.
Patient as Partner
Patients were not previously consulted or
considered in the actual therapy processes.
The patient was a good patient as long as
he was passive and faithfully consumed his
medications as instructed. Rare Diseases are
missing these therapies and networks. Thus
from out of this crisis, and a lack of organisa-
tion, affected people have begun to organize
themselves and change the status quo from
that of passive to active engagement and
action. Because patients can do much more
that just follow doctors orders; they can and
must be actively involved. All are mobilized,
committed and interested stakeholders in
understanding their own health situation in
addition helping to improve cost savings.
The patients passive approach to receiving is
transformed into a proactive self engagement.
sharing or creating vaLue?
If we succeed in generating economic activ-
ity with social needs and connecting the
needs of the customer, we create a successful
symbiosis within the principle of Creating
Shared Value. Shared Value is the enhance-
ment of competitiveness of a company while
simultaneously advancing the economy and
social conditions in the communities in
which it operates. Companies can create
economic value while creating societal value
by redefining productivity in the value chain,
reconsieving markets and products by build-
ing and supporting business clusters.
1
The needs of the Society have to be con-
sidered as the roots of global business. Value
creation and short term performance should
and can be turned into sharing created value
in a long term approach. Companies should
take the lead by bridging business and soci-
ety back together. Only a stable and healthy
society will be able to survive on a long term
basis and bring back value on a true basis of
company productivity. Shared value is much
more than philanthropy, sustainabiltiy and
social responsibility. It is a cutting- edge way
to achieve economic success. The practice
of this model by international companies
such as Nestle, IBM and Johnson & Johnson
testifies to the foresight and pioneering spir-
it. These principles should therefore be
contrary to the general understanding of
economic activity as they contribute enor-
mous economic and social potential.
beyonD sociaL anD ProFit
A whole new generation of social entrepre-
neurs with innovative business models are set
up to pioneer social needs and their products.
By eliminating old habits and trends com-
pletely, many social entrepreneurs are ahead of
established business by using new aproaches
and opportunities. Doing so they are much
more flexible with creating key products and
shared value on a quick and solid basis, beyond
profit and purely social programms.
As does Orphanbiotec, a modern Hybrid,
consisting of a tax deductible and chari-
table foundation and a for profit company.
The hybrid bridges the vested interest of
stakeholders and society to innovate their
projects and products. People affected
with a Rare Disease are included as well
are Research, Pharma, Healthcare, Insurance
and Government. Orphanbiotec is forstering
partners, business and civil society while cut-
ting across the traditional ways of business.
Broad fundraising, donations and grants
for the Foundation ensure the kick-off for
new research and development. Impact
investment with a low return allows to cut
costs for clinical development of new drugs in
order to keep the price affordable for payers.
All stakeholders and organisations within the
Competence Network agree that a percentage
of the profit is used as a Social Benefit for
the society in terms of the Foundation. All
partners and the civil society profit, while this
hybrid succesfully progresses.
1
from Harvard Business Review, Jan.-Feb. 2011.
Prof. M. E. Porter
www.orphanbiotec.com
www.orphanbiotec-foundation.com
Research Foundation Orphanbiotec
Winner of the Social Entrepreneurship Startup
Award 2011
Dr. Frank Grossmann
Founder & CEO
post:
Hochstrasse 49
8044 Zurich
office:
Einsiedlerstr. 31a
8820 Wadenswil
Switzerland
phone: +41 44 586 82 27
mobile: +41 79 246 50 69
www.orphanbiotec-foundation.com
Tax deductible and charitable foundation under
Swiss Law.
StockWord Puzzle
TM

Across
2 - NIBA
10 - Writer of Caregiving
13 - diagnostic risk assessment products for
breast cancer
14 - markets
15 - Teresa Touey
16 - @stocknewsnow
18 - currency trading
19 - wall street chicken
22 - tunnels in underground mines
23 - I can buy NASDAQ stocks for cash or_______
24 - gold
25 - micro-cap 365 for micro-cap companies
28 - Brent
29 - Micro-Cap_______Magazine
30 - 28.35 grams equals one
31 - Dodd ______ Law
33 - video press release
34 - a localized area of several calderas
36 - biology meets technology
42 - vertical
43 - Cambridge
44 - cerium,erbium, and dysprosium are a few
45 - rare______elements
48 - Stock Exchange in Asia
50 - Q&A with_______
52 - private investement into a public equity
53 - micro-cap stock _________
54 - Barbara Duck author of ________
55 - FACE______
56 - dowjonesindustrial
59 - buying calls I pay a ________
60 - Jeb Handwerger
61 - unset price of stock sale
62 - star of the Wall Street Chicken
64 - merger
65 - the rim of uppermost portion of a volcano
66 - contributing writer Ian_____
67 - newest form of wrapping email
Down
1 - .062 miles equals
3 - Mr. Wallstreet
4 - gold is calculated in
5 - Rye Patch
6 - Shelly Kraf book
7 - low sulpher content
8 - anatomy of a junior resource company
9 - whats your favorite website for micro-cap
fnancial news
11 - anatomy of a biotech company
12 - Firemans Brew
14 - internal fxation systems products
17 - N1 43-101 Canadian National Instrument
20 - Book written by Shelly Kraf
21 - orthopedic implants
26 - a zone that forms a boundary between two
or more geological structures
27 - Mr. Wallstreet china article
32 - social
35 - Writer of How to headge your Micro-Cap
portfolio
37 - new name for old Vancouver Exchange
38 - Other Canadian exchange
39 - MCR survey is a __________
40 - Frank Grossman Article
41 - stock spread
46 - this equals 2.47 acres
47 - Indicated, Measured, Probable, Proven
49 - popular SNN Blog and newsletter
51 - V Stock Transfer
53 - you sell stock by writing ______ options
57 - borrowed funds
58 - other yellow metal
61 - shapiro
63 - buy, sell _______
65 - you buy stock by writing ______ options
Answers on page 87
PRoFILED ComPAnIEs
grizzly Discoveries, inc.
G
rizzly acquired roughly 2,450,000
acres of Permits prospective for
Potash. A number of Grizzlys
permits exist in close proximity to a reported
(and confirmed) occurrence of potash min-
erals in a deep well in the Vermilion area of
east-central Alberta. Potash beds have been
confirmed to be present in a number of
cores within and adjacent to Grizzlys lands.
Historic wells were drilled by oil companies
between 1940 and 1980 which indicated pot-
ash showings of up to 21.6% K20 on Grizzly
lands and up to 25% K20 on nearby lands.
On December 12, the first test well was
completed on Grizzlys 100% owned potash
project near Medicine Hat, Alberta. Coring
commenced at 1,642 metres below surface
and visible potash minerals were observed
in the drill core for the interval between
1,650.1 m and 1,655.7 m below surface.
Split core samples will be forwarded to SRC
for full geochemical analysis and results are
expected in late January 2012.
In September 2011, Grizzly signed a LOI
with Pacific Potash Corporation (Pacific)
to commence a multiple potash test well
exploration program on the Grizzly-Pacific
50:50 owned Provost Property, near Provost,
Alberta. The first well on the 50:50 owned
Provost Permits was completed in mid-
November with split core samples sent to the
SRC for geochemical analysis and results are
expected in January 2012.
Grizzly holds four gold-silver-copper
properties totaling over 225,000 acres in
the productive Republic-Greenwood Gold
District along the British Columbia-US bor-
der. This area which has produced more than
6 million ounces of gold. Kinrosss 1.2 mil-
lion oz Buckhorn gold mine (1.2 m oz gold
with average grade of 16 g/t gold) is 7 km to
the south of Grizzlys property .
In 2011, over $2.5 million has been spent
in exploration and drilling which included
up to 4,000 m and 13 drill holes. The
first two holes on the DAYTON target area
resulted in the discovery of new low grade
bulk tonnage style gold-copper mineraliza-
tion in the area.
Past drilling in 2010 on the KET 28 pros-
pect resulted in 8.91 g/t Gold over 6.1 m and
52.18 g/t Gold over 3.35 m. Gold sulphide
hornfels/skarn similar in style and geol-
ogy to Kinrosss Buckhorn. In 2010, at the
COPPER MOUNTAIN prospect a new
gold discovery at the Prince of Wales target
yielded an intersection of 1.0 g/t gold over 30
m. The zone is open in all directions.
Numerous other anomalous targets have
been identified and drilling of these targets
will be ongoing in January 2012. Drill results
from the 2011 drill program are expected
throughout January 2012.
We are extremely excited about intersecting visible potash
minerals in our first potash test well on our 100% owned
Alberta Potash Project and are eagerly anticipating labora-
tory assay results expected in January to confirm this.
states Brian Testo, President of Grizzly.
We are also very excited about the new discovery of low
grade bulk tonnage style gold-copper mineralization inter-
sected at two targets at the Dayton area and the potential
to expand and improve upon previously identified mineral-
ization. Brian Testo
Buffalo Head Hills Diamond Properties,
North Central Alberta2007-2008
Exploration Highlights: HRAM magnetic
surveys, ground geophysics surveys, sam-
pling and drill testing has led to the discov-
ery of 3 new kimberlites in the Buffalo Head
Hills. Two kimberlite pipes are encouraging
diamond results and both pipes require bulk
sampling. n
Potash Properties,
Eastern Alberta
TSXV: GZD OTCQX: GZDIF FWB: G6H
Potash
in Alberta
Gold/Copper/Silver in British Columbia
Diamonds in Alberta

Potash Properties, Eastern Alberta:
Grizzly acquired roughly 2,450,000
acres of Permits prospective for Potash.
A number of Grizzlys permits exist in
close proximity to a reported (and
confirmed) occurrence of potash minerals
in a deep well in the Vermilion area of
east-central Alberta. Potash beds have
been confirmed to be present in a
number of cores within and adjacent to
Grizzlys lands. Historic wells were drilled
by oil companies between 1940 and 1980
which indicated potash showings of up to
21.6% K20 on Grizzly lands and up to
25% K20 on nearby lands.
On December 12, the first test well was
completed on Grizzlys 100% owned
potash project near Medicine Hat,
Alberta. Coring commenced at 1,642
metres below surface and visible potash
minerals were observed in the drill core
for the interval between 1,650.1 m and
1,655.7 m below surface. Split core
samples will be forwarded to SRC for full
geochemical analysis and results are
expected in late January 2012.
In September 2011, Grizzly signed a
LOI with Pacific Potash Corporation
("Pacific") to commence a multiple potash
test well exploration program on the
Grizzly-Pacific 50:50 owned Provost
Property, near Provost, Alberta. The first
well on the 50:50 owned Provost Permits
was completed in mid-November with
split core samples sent to the SRC for
geochemical analysis and results are
expected in January 2012.
Grizzly holds four gold-silver-copper properties
totaling over 225,000 acres in the productive Republic-
Greenwood Gold District along the British Columbia-US
border. This area which has produced more than 6 million
ounces of gold. Kinross's 1.2 million oz Buckhorn gold
mine (1.2 m oz gold with average grade of 16 g/t gold) is
7 km to the south of Grizzly's property .
In 2011, over $2.5 million has been spent in exploration
and drilling which included up to 4,000 m and 13 drill
holes. The first two holes on the DAYTON target area
resulted in the discovery of new low grade bulk tonnage
style gold-copper mineralization in the area.
Past drilling in 2010 on the KET 28 prospect resulted in
8.91 g/t Gold over 6.1 m and 52.18 g/t Gold over 3.35 m.
Gold sulphide hornfels/skarn similar in style and geology
to Kinross's Buckhorn. In 2010, at the COPPER
MOUNTAIN prospect a new gold discovery at the Prince of
Wales target yielded an intersection of 1.0 g/t gold over
30 m. The zone is open in all directions.
Numerous other anomalous targets have been identified
and drilling of these targets will be ongoing in January
2012. Drill results from the 2011 drill program are
expected throughout January 2012.
Buffalo Head Hills Diamond Properties, North
Central Alberta2007-2008 Exploration Highlights:
HRAM magnetic surveys, ground geophysics surveys,
sampling and drill testing has led to the discovery of 3
new kimberlites in the Buffalo Head Hills. Two kimberlite
pipes are encouraging diamond results and both pipes
require bulk sampling.
We are extremely excited about intersecting visible potash minerals in our first potash test
well on our 100% owned Alberta Potash Project and are eagerly anticipating laboratory assay
results expected in January to confirm this. states Brian Testo, President of Grizzly.
We are also very excited about the new discovery of low grade
bulk tonnage style gold-copper mineralization intersected at
two targets at the Dayton area and the potential to expand and
improve upon previously identified mineralization. Brian Testo
n By LInDsAy hALL, Chief
Market StrategiSt, rMB group
How to Hedge Your Micro-Cap
Portfolio by Using Options on
DOW Futures
a quick glance back at the performance of
the S&P Smallcap 600 Monthly chart per
Barchart.com. (Its not micro-cap, but it gets
you near that ballpark.)
The market decline erased almost 5 years
of growth in less than 12 months. I am
certain that most traders do not want to be
caught in a situation like this without some
type of asset that can gain from this type of
move.
Here is what 2008 looked like for the
While they might not stumble as heavily as
some of their large-cap brethren, once the
market has decided upon a direction they
do still tend to follow. Lets think back over
the last few years and evaluate where things
have gone wrong and steps that you might
consider taking to aid in such events should
they occur in the future.
In the last few years there are two stand-
out timeframes in my mind:
2008-A year not easily forgotten, lets take
A
s a micro-cap investor you probably pay quite a bit of attention to
growth potential and you may even list one of your goals as beating
the street. While micro-cap issues can be a great avenue to achieve these
aims, they may also be hard hit when Wall Street takes a tumble.
Dow Jones Industrial Average Futures per
Barchart.com:
The decline on the DJIA and the small-
cap side of the house was equally punishing.
Keep in mind that this was an election year
and the Bulls still didnt show. (Election
years typically attract the bulls but they were
nowhere to be found in 2008.)
May 6, 2010- The Flash Crash: a com-
pletely unexpected and massive sell-off. This
one had me floored. I was actually broad-
casting live when it occurred, commenting
on the FX market. I was astounded at the
flat out speed with which the currencies were
traveling. When I saw what was happening
on the stock side, the forceful volatility in
currency at that time of day and with such
measure made sense. I had never witnessed
anything as massive or as fast as these market
movements. This event showed us all just
how quickly worlds can change.
The Barchart.com chart above shows the
Dow on May 6, 2010 illustrating its fall into
a 9% loss territory in just minutes, while the
chart below illustrates an overview of the
small-caps.
The two events that I have highlighted
here are just a glimpse of the potential that
exists today in our markets for deteriora-
tion of wealth, earnings, value, and growth.
While we have been fortunate to have recov-
ered from both of these recent examples,
there is no guarantee that the next rounds
will be forgiving when/if they occur.
Here are a few things to think about as we
get ready to move into 2012:
Micro-cap investing will still be part of
your portfolio.
The bigger they are, the harder they fall.
You dont favor the big guys anyhow, so
why not be prepared to take advantage of
a big step down or market failures should
they occur?
While we are moving into an election year
(and typically they tend to be more bullish
than not), remember that 2008 did not keep
to the typical cycle and this year upcoming
could have a lot of surprises in store for
everyone. Prepare yourself by introducing
Options on Dow Futures to your aggregate
portfolio.
These limited risk, leveraged option plays
to offer some peace of mind and potential
for gains should the markets head south.
Heres your trade:
Consider buying March 11000 Mini Dow
puts while simultaneously selling an equal
number of March 10000 Mini Dow puts for
a net cost of 180 points or less. Each point
in the Mini Dow options is worth $5 so the
total cost of this trade is $900. This plus
transaction costs is all we can lose if the Dow
fails to drop.
How much can we make?
What we are doing is buying the right but
not the obligation to be short the mini Dow
futures from 11000 and partially paying
for it by receiving money for an offsetting
obligation to buy back the mini Dow futures
at 10000. We can make the 1,000 points
between our right to sell the Dow at 11000
and our obligation to buy it back at 10000.
Multiply 1,000 times the $5 multiplier and
we get a gross potential gain $5,000 for each
of this positions we enter.
This trade is a professional trading strat-
egy called a bear put spread. It is designed
to pay off should the Dow drop 4.6% to 16%
from current levels (11850 at the time of this
writing). Experienced money managers use
strategies like this to hedge their underlying
stock portfolios all the time. You can do the
same thing.
*** You may also consider similar lim-
ited risk trades using S&P Futures Options.
Timelines, contract sizes, and specific
options can all be tailored to suit your needs
best. (Remember that contracts further
out in time, June 2012 for instance, may
have lesser participation, i.e. thin markets.)
Please feel free to contact me via e-mail at:
Lindsay@rmbgroup.com for assistance with
any of your futures options needs.
Wishing you a prosperous New Year! n
This trade is a professional trading strategy called a bear put
spread. It is designed to pay off should the Dow drop 4.6% to 16%
from current levels (11850 at the time of this writing). Experienced
money managers use strategies like this to hedge their underlying
stock portfolios all the time. You can do the same thing.
LINDSAY HALL, Chief Market Strategist, Rutsen
Meier Belmont (RMB) Group
Address: 222 S. Riverside Plaza, Suite 900,
Chicago IL 60606
Telephone: 312-373-5482
E-mail: lindsay@rmbgroup.com
Lindsay is Chief Market Strategist with the Rutsen
Meier Belmont (RMB) Group. She has been an
active foreign currency trader and financial markets
analyst for over 10 years. She is a popular internet/
television moderator, logging over 2500 hours of live
television dedicated to both markets and investors.
If that werent enough, she has published thousands
of pages on the currency markets via tutorials,
international newsletters, articles, and blogs. Her
information-packed seminars set industry standards
for excellence. She has taught valuable currency trad-
ing skills not only to her broadcast audiences, but
also to conference classes with audiences numbering
up to 4,000 in one room.
The information and opinions contained herein
comes from sources believed to be reliable, but are
not guaranteed as to accuracy or completeness. The
risk of loss in trading futures and/or options is sub-
stantial. Each investor must consider whether this is
a suitable investment. When trading futures and/or
options, it is possible to lose more than the full value
of your account. All funds committed should be risk
capital. Past performance is not necessarily indicative
of future results.
PRoFILED ComPAnIEs
brazils next big gold storytargeting major
resource expansion this year
Brazil Resources Inc. (OTCQX: BRIZF; TSX-
V: BRI) is a newly-listed company led by an
unusually strong management team with an
impressive track record. Prior to joining forces,
the team had already discovered and developed
more than 10 million ounces of gold directly in
the high-growth gold districts of Brazil.
With a demonstrated ability to raise sub-
stantial capital -- and strategic relations with
exclusive access to prime gold projects to
rapidly advance gold acquisition and explo-
ration activities -- BRI is working to build
a multimillion-ounce gold resource in the
near-term. Importantly, major institutional
investors support this team, and already
control 35% of the Company.
it aLL starts with the right
team
BRI founder and chairman Amir Adnani is
also the CEO and co-founder of Uranium
Energy Corp. (NYSE-AMEX: UEC), the
newest US-based uranium producer.
Adnani has drawn together an impressive
team for rapid growth: BRI director Mario
Garnero heads one of Brazils largest private
merchant banks which controls 10% of the
Company. His firm, Brasilinvest Group is a
strategic partner in identifying large quali-
fied projects.
CEO Stephen Swatton most recently served
as head of BHP Billitons Global Business
Development and Technical Divisions for the
Exploration Department. BHP is the worlds
largest mining company. Director Enzio
Garayp was the former exploration manager
for Kinross in Brazil and directly oversaw the
8 M oz. expansion of the 18 M oz. Paracatu
Mine, Brazils largest gold mine.
BRI went public in May, 2011 at $0.65/
share, and has never traded below $1/share
despite the depressed market for junior
resource stocks.
Now Eight Months After the IPO
Resource Expansion Commencing
BRI initially focused on the Gurupi Gold
Belt in northeastern Brazil. This prolific
and underexplored region currently hosts
more than 8 M oz. of gold with multiple
advanced projects. The Gurupi Belt was ini-
tially developed by Kinross when BRI direc-
tor Enzio Garayp was exploration manager.
With Enzios oversight, Kinross developed a
+3 M oz. gold deposit known as the Gurupi
Project now in development as an open-
pit mine.
With in-depth knowledge of the dis-
trict, BRI initiated exploration last year on
its Montes ureos Project, located 20 km
on-strike from the Gurupi Project. The
Companys technical team has now discov-
ered a 2-km-long gold trend at surface and
subsequently acquired more than +50,000
acres in the Gurupi Belt. Exploration pro-
grams are currently underway to delineate
mineralization at surface.
Consistent with its acquisition-focused
strategy, BRI has also acquired two more proj-
ects totaling 260,000-acres centered on two
11-km-long gold trends in Goias State with
superb potential for a major discovery. BHP
Billiton, Anglo Ashanti and Yamana Gold are
major gold producers in Goias State.
As a result of these early advances, the
Companys stock has remained in positive ter-
ritory while its Brazilian peers lost an average
of 30% in market cap in the recent downturn.
maJor acquisition in the
works?
BRI is commencing drilling on its Montes
ureos Project and anticipates releasing
results in the first half of 2012. Aggressive
exploration programs on other projects are
already well underway with potentially three
projects to be drilled in 2012 in search of
major discoveries.
BRI is also ideally positioned to deliver
on acquisitions with a recently completed
$4.7 M financing to institutional investors at
$1.10 and with no warrants. The Company
has now established a war chest of more
than $10 M in cash and only 39 M shares o/s
to further development.
Expect Brazil Resources to build on its early
successes with major gold resource expansion
this year from acquisitions and exploration
drilling programs. This is the time to start to
track with the growth of this Company.
Brazil Resources trades on the OTCQX
under the symbol BRIZF and on the TSX
Venture under the symbol BRI. For more
information, please visit www.brazilre-
sources.com and call the Company toll free
at 1-855-630-1001. n
vI E WP oI nTs
Beginnings and Endings
because we all bring our work home with us
so that our familiesspouses, children and
extended family membershelp us metabo-
lize what weve had to ingest emotionally in
our jobs and, most specifically, in the end-
ing of them and in the search for new ones.
My own family has been affected just as so
many of yours has, with the loss of employ-
ment, the need for career reassessment, and
the change in direction and focus of our
labors. The trauma of these losses are more
profound than we have been willing to
understand and acknowledge since the Great
Depression of the 1920s. The avoidance is
natural, since we tend to metabolize these
losses of jobs as some kind of failure on our
part, when in fact it may have nothing to do
with us, in any way at all, but is simply the
fact of economics that necessitate our posi-
tions being replaced. So, while the business
decision seems to be personally dispassion-
ate, the impact is more passionately intense
than anybody has been willing to admit.
Pain, shame, anger, humiliation, confusion,
trauma, the loss of security and trust, and
the failure of belief and hope, despair, and
the profound frustration with all politics and
political figures has led to a cynicism about
the American Dream than has ever been
part of us since the 1920s.
A historical perspective is important, here.
One of the views is that all of the varieties
of theoretical programs and financial struc-
tures which were created in the politics of
the Depression ultimately failed to accom-
plish their goal of restarting the American
economy. It was the Second World War in
Europe and the Pacific that generated the
rebirth of American industry. When WWII
n By RABBI sTEPhEn RoBBIns,
pSY.D., D.D.
The end is engraved in the beginning. The Book of Creation, circa 200 B.C.E.
There is nothing more difficult for humans
than either beginning or ending. Since
humans tend to be unsure of both the
future and its outcome, the anxiety of begin-
ning something or finishing it leaves most
people with a sense of profound disquiet
about whats next. Humans use the artificial
device of calendar holiday and ceremonies
to help us through transitions of meaning
in our lives. This is very much the essence
of what the ceremonial life of religions are
about, and if we are not formally religious,
we are familiar with using secular calendars
to help us acknowledge, celebrate or mourn
the beginning or the ending of phases in
our lives.
The reason I say that these are artificial
is that there is a natural flow of existence
in which what humans call time is really
only a description of the ongoing process
of living. Whether its a new year or an old
one, a birth or a death, a birthday or a wed-
ding, or so many other examples that you
could name, we need to find a way to mark
the passage of our lives so that we become
aware of the phases of our development. We
acknowledge the ending of one phase and
the beginning of another to give us a sense of
direction and purpose, of flow and develop-
ment so that we are assured that the passage
of our days, months and years have not been
meaningless.
These transitions in our lives generally
are marked in our families, and we make an
artificial distinction between business and
family life as if they are somehow different
from each other. I think that we do this
because the world of the marketplace feels
so uncertain. In families, at least there is
the emotional tie that binds us together and
therefore provides a sense of meaning all by
itself. In the world of business and finance,
we note the passage of time in much more
impersonal, or seemingly impersonal, ways.
We do so as a means of providing a differ-
ent sense of emotional and moral values
to business than we do to family. We even
codify this process by the phrase, Nothing
personal, its just business.
The truth is that everything is personal,
and everything is family. While we seem
to want to create the illusion that what
goes on in business is driven by a series of
impersonal decisions that are done for the
sake of the business, none of that is accurate.
We feel intensely personal about everything
that happens to us in our work, because the
events in the workplace define the quality of
our family lives in so many deeply personal
and emotional dimensions. It is time for
us to begin to understand the nature of the
dynamics of our workplace and the condi-
tions under which we both live and work.
The collapse of the economy in the United
States and the attendant rise in unemploy-
ment consistently demonstrates how what
goes on at work impacts on our families,
ended and the modern atomic age began, the
United States entered it at the top of the eco-
nomic power chain, with the Soviet Union
running a distant second. American busi-
ness and finance had been the world engine
of economy until the collapse in 2008. That
almost-sixty-year history of constant eco-
nomic growth and development, with an
occasional recession here and there to read-
just for inflation, created an economy built
on an illusiona fantasy, as Ive described
in earlier articles. As the private housing
market boom occurred and wealth increased
for the middle class through the post-War
years, we did not see (or were willing to
acknowledge) that we were heading towards
a financial structure in which the illusion
of wealth would finally collapse, as it did,
plunging the world in to deep recession if
not another Great Depression.
In the incredible expansion of business
and finance, Americans began to believe that
the illusion was true. The events of 2008 left
the country divided between the rich and
the incredibly shrunken middle class, and
the unemployed or underemployed work-
ing class of American society. As a country,
we now look much more like the other
economies of the world, which are divided
between the rich and the poor without a sig-
nificant middle class. It is our middle class
that has always been the key to the develop-
ment of our country. This analysis is only
the background to the impact of the loss of
income and employment for the American
economy of post-2008. The challenge we
face is how to begin again, to rebuild our
individual lives and private fortunes so that
we avoid building towards collapse in the
beginning.
There has been a great amount of study
regarding the success of the German post-
war industrial boom and the Japanese indus-
trial recovery, along with that of the United
States, all beginning at approximately the
same time. Among them, one common
thread in both German and Japanese indus-
tries is the unique understanding that in
their culture, the business or industry is
like a large extended family, and so there
is mutual responsibility for both labor and
management to work together in order to
create a productive, economic environment.
Their economies were an extension of the
cultural development begun in the Middle
Ages in which all industry was seen as a
support for family, and all family was seen
as a support for industry. The modern
replication of that, both in Germany and
Japan, extended to a shared concern for the
well-being of the worker and the investor as
family members of the business or industry
in which they were involved. In America, the
tradition being much more individualistic
and based on the capitalistic premise of indi-
vidual competition to secure ones position,
led to the fundamental belief in this country
that you succeeded and were successful based
on your own merits, so that management
and labor were usually seen as contending
factions in which the managers had no con-
cern for the laborer and vice versa, so that we
ended up in the kind of conflictual relation-
ship between unions and industry that is
so prevalent today. The problem with this
divide is that conflict is the basis of business
relations and employee relations, and the
cooperative values which really serve both
groups are not found. Whether the subject
is health care, pension, retention of labor,
or definition of merit, most discussions are
begun in an atmosphere of conflict rather
than in an atmosphere of true cooperation.
Since the housing disaster of 08, it has
become clear that the admonition caveat
emptor (buyer beware) was not only in
full force but was fundamentally inoperable
because individual familial decisions were
not provided with adequate information to
understand the risks they faced. This has
only added to the feelings of anger and of
betrayal and mistrust that pervade so much
of American society toward the business and
government.
We are just at the beginning of a recov-
ery, and now must question how to begin
it. If we look back at the way we began in
the 1930s and 1940s, we can understand
where we went wrong and how it led, sixty
years later, to the collapse that we now
lived through. All of us who are within are
own employment and work settings need
to be conscious of how we begin to rebuild
ourselves based on the kind of model that
would lead us to be the kind of people that
we would like to be. Theres nothing wrong
with aiming towards financial well-being,
but we now should know not to do it at the
expense of either individual or business eth-
ics which will, in fact, only lead us back in
to the same trap. This means that each of
us must first look to our own housesthe
businesses of our family, and how in them,
we lost sight of the very values that would
have kept us from being trapped, while at
the same time looking at the industries in
which we work and asking the same kinds
of questions. We can tell that any return to
business as usual will, in fact, quickly lead
us back in to the same cul-de-sac that we are
in now.
There are several ways that we can begin
this reassessment process. One is to ask the
question, What are we working for? What
are the values and goals that make up our
ambitions in work? We need to find out
where they have been out of balance and
have not served the best interests of the fam-
ily as a whole and the individual members of
our family. There is frequently a large divide
between the values we say we espouse and
the way we behave. Usually, our behavior
is a better indicator of the values that we
hold rather than the words we say. It is
not an easy task to find the divide between
the words and actions, especially when we
would like to think of ourselves as people
of ideals. This is where it is important to sit
with members of the family who both can
and will talk these issues out, to arrive at a
deeper consensus of the role of work and the
way it is enacted; the role of money, how it is
acquired and spent, says a lot about what you
really hold to be of greatest value. Reviewing
family time and how it is created and spent
will also tell you a great deal about the way
you value family/personal time versus work

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 AdvaMed
qAdvaxis
qAre You DTC Eligible?
q Ask Mr. Wallstreet - When did I Become a contrarian
q Atossa Genetics
q Beginings & Endings - Rabbi Stephen Robins
q BioInvest Israel
q Biotech Supermen & Superwomen - Teresa Touey
q Brazil Resources
q Cambridge House International
q Capital Markets Visibility Program
q Cardium
q Caregiving - Elenor Vera
q Caveat Emptor
q Chinese Public Companies - Lance Jon Kimmel
q Cream Minerals
q Darwin Resources
q Do You Wrap
q DynaResources
q eCheck
q Firemans Brew
q Global Minerals
q Grizzly Discoveries
q Hard Assets
q Harris & Harris Group
q How to Hedge - Lindsay Hall
q Inovio
q Internal Fixation Systems - Cover Story
q International Stock Exchange Executives
q Investor Uprising
q Is Anything Predictable - Dr. Grodon Chiu
q Marfl Mines Ltd.
q Mawson Gold Finland
q Mergent
q Metal Market Overview 2011 - Chris Berry
q Micro-Cap Investing - Ian Ellis
q New Merriman Capital
q NIBA
q Oak Street Securities
q Ombudsman
q Omega P3
q Oppportunites in Junior Explorers - Brent Cook
q Oswald & Yap Lawyers
q Pacifc Rim Chamber of Commerce
q PR Newswire
q Proft Planners Management, Inc.
q Rye Patch Gold
q SNN is to Micro-Caps - Bobby Kraft
q SNN Micro-Cap Visibility 365
q Soltoro Ltd.
q Streetwise Reports
q Tasman Metals Ltd.
q The Compliance Corner
q Value Beyond Proft
q Virtual Retail Investor Conference
qWallstreet Chicken
qWhats Really Going on with Rare Elements
- Jeb Handwerger
1. did you sell your equity positions in stock and buy
physical gold or silver in 2011?
q Yes
q No
q Bought more equities
3. Are you an accredited investor?
q Yes
q No

5. which of these choices contributed to your biggest
win in 2011?
qGold hit new high
qSilver hit new high
qCopper traded higher
qRare earth elements traded higher
2. did you sell equities in your portfolio to buy gold or
silver common stocks?
q Yes
q No

4. did you participate in any private placements,
registered direct investments or pIpeS in 2011?

qYes
qNo
6. What was the heaviest weighted sector in your portfolio
at the end of 2011? (can be more than one)
qBiotech
qMed-Tech, Devices or Diagnostics
qResources
qOil & Gas
qAlternative Energy or Green Tech
qTechnology
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: microcapreview.com
4766 Admiralty Way #13004 Marina del Rey, Ca. 90295
7. Now that 2011 is over what would you have done
differently?
q Bought more micro-cap stocks
q Bought less micro-cap stocks
q Bought more precious metals (not the stocks)
q Sold everyhting

9. How many Free newsletters do you subscribe to?
q 1-5
q 6-10
q Too many to count
q None
11. Have you subscribed to the online Micro-cap review
magazine?
q Yes at www.stocknewsnow.com
q Yes at microcapreview.com
q No not yet
q I like to read the hard copy
13. would you participate in a virtual conference online?
qYes
qNo
qIf it had companies I was interested in
8. do you participate in the ForeX markets?
q Yes
q No
q Not familiar with FOREX markets
q I am interested and would like to know more

10. do you subscribe to paid for research or newsletters?
q Yes
q No
12. How many conferences did you attend in 2011?
q 1
q 2-5
q More than 5
14. Have you registered at www.StockNewsNow.com?
q Yes
q I will soon
q I will do so right after sending in this survey!
All participants in surveys receive a Free lifetime subscription to Micro-cap review Magazine.
Name: ____________________________________________________________________
Address: __________________________________________________________________
email: _______________________________ phone: ______________________________
q Online Social Network
q Organic
q Pharmaceuticals
q Publishing
q Rare Earth Elements
q Real Estate
q Resource Exploration
q Retail
q Security
q Silver
q Social Network
q Transport
q Travel
q Uranium
q Veterinary Products
and Services
q Web Software
q Wellness
q Wireless Communications
q Aerospace
q Accounting
q Alternative Energy
q Auto
q Banking
q Basic Minerals
q Beverages
q Biotech
q Bullion
qBusiness Services
q Chemicals
q China
q Clean Energy
q Communication
q Construction
q Consulting
q Consumer Products
q Consumer Services
q Currencies
q Defense
q Diamond Mining
q Digital News
q Digital Platforms
q Direct Marketing
q Diversifed Investments
q Drilling
q Education
q Electronics
q Energy
q Energy Products
q Entertainment
q Finance
q Financial Trade Shows
q Food
q Franchisor
q Gaming
q Gold
q Gold Producer
q Green Technology
q Healthcare
q Industrial Goods
q Industrial Metals & Minerals
q Information Technology
q Insurance
q Junior Gold De veloper
q Junior Gold Producer
q Legal
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q Metal Exploration
q Oil Drilling
q Oil and Gas
q Oil and Gas Fund
check off areas of interest:
time. Frequently, all family events are sacri-
ficed for the needs of work. This becomes a
fundamental value that leads to a habitual
treating of family needs as a distant second,
third or forth to work. Looking at what gives
you a sense of value in your lifefamily
versus workleads to an honest appraisal
of the balance between them and is usually
very enlightening, though difficult to face
at times.
These are a few simple suggestions of how
to begin the process of assessment before
you even begin to plan for the beginning,
leaving behind what is truly in the past and
not carrying it over with you in to the pres-
ent and the future.
In the business setting, a similar process
can be applied by anonymous question-
naire given to the employees, which can help
you assess the way they see the company
and its operations. Such questionnaires are
now professionally done and handled by
the internet in such a way that anonymity
is assured. This can give you a very detailed
view of the psychosocial climate in your
business. It is important in the beginning
of every new project to forecast what it will
take to accomplish the stated goals. New
enterprises are expected to be handled as
part of the regular flow of business, which
then adds enormous stress to the employees.
Preparing for this in advance will obviate
the kind of traumatic impact that new work
usually brings with it.
There are many other ways in which one
can assess the climate of your business and
work setting so that you are able to be a posi-
tive agent for change rather than being seen
as a complainer and resister to the work of
the company. Ultimately, we all must learn
that the productiveness is based not in the
product which is manufactured, but in the
workers which produce and sell it. They are
the most important asset in any business,
and therefore need to be treated as such in
a reasonable fashion. That will take care of
both the business as well as the family of
workers. Employees and colleagues have
complex social and emotional relationships,
filled with the greatest of friendship and the
bitterest of resentment. Employees who
gossip about other co-workers create a pro-
foundly unsafe environment for everyone
and engender counter-gossip that sets up
an ongoing atmosphere of conflict and mis-
trust. Ending gossip in the business setting
is so beneficial because it creates an environ-
ment in which people feel safe to do their
work, without exposing all of themselves in
order to be accepted by their co-workers.
Last of all, many employees have no per-
sonal investment in the work they do, other
than the paycheck they receive. That attitude
demoralizes even the committed workers
and creates a careless environment in which
the primary and formal relationship is one
of perceived danger. If you have a business
environment in which everybody pulls on
the same end of the rope because they feel
safe, included and cared for, then you begin
the rebuilding of your enterprise with this
perspective. I wish you all healthy, prosper-
ous and productive beginnings. n
biograPhy
Rabbi Stephen M. Robbins, Psy,D. is a psychologist
in private practice in Los Angeles. He and his wife
Cantor Eva Robbins are the clergy of Nvay Shalom,
a Transdenominational community. He is also the
co-founder of the Academy for Jewish Religion/
California in which he is a professor of mysticism
and spiritual psychology. He is a deeply profound
spiritual teacher of Jewish mysticism and ancient
traditions of healing. He is available for consultation
and coaching for individuals and businesses that seek
to expand and strengthen the work community and
corporations. He is also specialized in family and
individual counseling with an eye towards the heal-
ing of unresolved traumas and conflicts.
International Stock Exchange
Executives Emeriti to Meet in
Orlando
ation with the small cap market in this
country, Schnorf indicated. The ISEEE
website includes the Orlando Declaration
and a summary of the most recent meeting
held in March, 2011 as well as a list and short
biographies on the members of the ISEEE.
This March there will be current and
former executives from the NYSE, AMEX,
NASDAQ, National Stock Exchange, and
the Chicago Board Options Exchange from
the U.S., as well as the Toronto Exchange
from Canada. From South America there
will be attendees that have served in execu-
tive level exchange and securities capaci-
ties from Brazil (Bovespa Exchange) and
Peru. From Africa there will be officials
that have served on behalf of the Cairo
and Alexandria Exchanges in Egypt, as
well as the Johannesburg Exchange. From
Europe there will be senior exchange officials
that have served on behalf of the London
Exchange, Istanbul Exchange, Dubai and
Abu Dhabi markets, the Zurich Exchange,
the Dutch Boerse, the Stockholm Exchange,
the German markets, Malta Stock Exchange,
the Luxembourg Exchange, Vienna Stock
Exchange, the Prague Stock Exchange, and
the Borsa Italiana. In regards to Asian
exchanges there will be attendees that have
Jim Schnorf, who has served as the host of the
forum since its inception in 2008, indicated
there will be a record turnout of current and
former senior stock and derivative exchange
executives in attendance. Don Calvin, a
former top NYSE officer and Advisor to more
than 25 Chairmen and CEOs of exchanges
around the world, has been the impetus
behind starting the organization and grow-
ing the event each year, and has arranged
for a significant number of new countries
and to be represented this year in Orlando.
Wall Street Strategic Capital (www.wsscapi-
tal.com) is thrilled to have the privilege of
not only welcoming back a large number of
distinguished current and former exchange
officials who have attended in the past, but
also to welcome a large contingent of new
current and former senior exchange execu-
tives from multiple continents, said Schnorf.
The ISEEE (www.capitalmarketexperts.
net) is a New York 501(c)3 not for profit
educational organization that was estab-
lished to provide current and former stock
exchange chairmen and CEOs from around
the world an opportunity to collaborate
on matters including issues and challenges
facing the various exchanges, discuss best
practices, review trends and concerns in the
respective countries and economies, and
make recommendations that are passed
along to relevant regulatory and legislative
bodies. According to Schnorf, the ISEEE
has not only issued insightful recommen-
dations on matters such as urgent capital
market reforms that are needed, but also
launched the Small Business Task Force
which is headed by David Weild, former
Vice Chairman of NASDAQ. Both Calvin
and Schnorf are members of the Task Force,
along with a small group of other ISEEE
participants. Don Calvin once again was
the inspiration behind starting the task force,
an idea that was immediately embraced
by the entire ISEEE membership. David
Weild made a compelling presentation to
the group that stressed the decline of the
small cap IPO market in the U.S., as well
as the alarming reduction in the number of
small cap listed companies. Don felt that the
ISEEE would be the perfect group to tackle
this issue and the task force was put in place
with Dave agreeing to serve as Chairman.
Substantive progress has been made includ-
ing not only providing specific recommen-
dations to regulatory authorities, but also
creating awareness among key U.S. Senators
and Representatives about the alarming situ-
T
he International Stock Exchange Executives Emeriti (ISEEE) will
hold their fifth annual meeting March 25-28, 2012 at the Royal Plaza
Hotel in Orlando, Florida according to Jim Schnorf, President of Wall
Street Strategic Capital, Inc.
served as executives for the Hong Kong
Exchange, the Moscow and Kazakhstan mar-
kets, and from Malaysia/Kuala Lumpur. In
addition, executives that have served the
Australia and New Zealand exchanges will
also be in attendance. Two Vice Chairmen,
Robert Aber (former General Counsel for
NASDAQ) and William Foster (former
CEO of the New Zealand Exchange and
Chief Operating Officer of the Abu Dhabi
Securities markets) who is currently an
Advisor to the new Cambodian Exchange
will also be attending. Special guests will
include among others Stanley Sporkin, the
legendary Director of Enforcement at the
Securities & Exchange Commission and for-
mer Federal Judge and General Counsel to
the Central Intelligence Agency. Schnorf
indicated that since the size of the group
has grown to such a significant number of
attendees, it is now impossible to schedule
dates even a year in advance that will accom-
modate all members schedules that want to
attend. For this upcoming conference the
former CEO of Eurex and the Berlin Stock
Exchange, as well as the former CEO of the
European Options Exchange, have conflicts
and will not be able to participate, he said.
The ISEEE has chosen SNN Inc. to be
the official media sponsor for the event.
In addition to covering the forum, Shelly
Kraft, SNN founder and CEO, will also be
conducting SNNLive interviews of many of
the ISEEE officials which will be aired on
www.stocknewsnow.com , and SNNLive TV.
Micro-Cap Review magazine www.microca-
preview.com will be at the conference and
will carry coverage of the event in a maga-
zine article in its quarterly issue. Schnorf
said, We are very pleased to have SNN as
the media sponsor for this prestigious event.
Given Shelly Krafts passion for the micro-
cap and small cap markets, as well as his
knowledge of both U.S. and foreign markets
and his relationships with thousands of pub-
lic company executives over the years, we felt
SNN was the perfect choice for our event. I
know I speak on behalf of all of the ISEEE
attendees in expressing our excitement of
having SNN serve in this capacity.
Last year Schnorf arranged for the newly
elected Governor of Florida, Rick Scott, to
attend the event and meet with the ISEEE
participants. Among topics discussed was
the prospect of potentially creating an
international financial center in Florida.
The Governor was extremely interested in
not only meeting this highly distinguished
group of international financiers, but in
also hearing recommendations as to how
Florida could benefit from their experience,
relationships, and past successes in their
respective geographies. In addition, these
are all very influential people in their respec-
tive countries, so the opportunity to further
establish business relationships and strategic
partnerships was clearly part of the agenda.
Governor Scott, with his successful busi-
ness background, clearly recognizes that two
of the major impediments facing business
today are lack of capital access, and excessive
government regulation. He is clearly com-
mitted to resolving both of these issues on
behalf of the State of Florida, and the fact
that he changed his schedule on short notice
to come from Tallahassee to meet with this
group is indicative of his commitment to
these initiatives. Small business is where
jobs are going to be created in the future,
and these are probably the two largest issues
facing job growth. Clearly the lack of capi-
tal, especially in Florida where in years past
in excess of 95% of venture capital invested
in Florida came from outside the state, is
an urgent issue that has to be addressed,
Schnorf said.
Although the forum is not open to the
public, Schnorf has indicated there is an
opportunity for a small number of highly
relevant firms to attend one or more of the
events as a lunch or dinner sponsor, which
would include an opportunity to meet the
ISEEE attendees and make a brief presenta-
tion about their firms. The forum begins
with a welcoming dinner on March 25, with
technical meetings, a luncheon and dinner
on March 26, technical meetings, a lun-
cheon, and a reception (which will include
Orlando area senior business and political
attendees) on March 27, and technical meet-
ings and a farewell dinner on March 28. The
Small Business Task Force will also meet on
March 25. On March 26, the keynote dinner
speaker will be Professor Melvin Escudero,
the former head of the Peru Pension System
who will discuss the rapidly growing Andean
Stock Exchange. The March 27 luncheon
keynote speaker will be Mohamed Abdel
Salam, Chairman and CEO of the Egpytian
Securities Exchange and Vice Chair of the
Arab Stock Exchange. Firms that have an
interest in participating can contact Jim
Schnorf, jschnorf@wsscapital.com. n
Given Shelly Krafts passion for the micro-cap and
small cap markets, as well as his knowledge of both
U.S. and foreign markets and his relationships with
thousands of public company executives over the years,
we felt SNN was the perfect choice for our event.
Do you WRAP?
such as Outlook, Thunderbird, MAC Mail,
Entourage, and Lotus Notes and can be used
with Google Business accounts and smart
phones, including the iPhone.
Creates powerful new and incremental
revenue streams from existing or new sourc-
es by simply sending every day, routine
email.
Rich functionality that allows users to
track and analyse email campaigns
Revenue opportunities through third
party participation, via sponsored messages,
selling advertising space or pay per click
campaigns.
Targets one-to-one emails, a new unex-
ploited market
Viral service offering, where users beget
new users
growth oPPortunities
According to a Radicati Group study the
number of worldwide email users is project-
ed to increase from over 1.4 billion in 2009
to almost 1.9 billion by 2013. In 2009, 74%
of all email accounts will belong to consum-
ers, and 24% to corporate users.
Worldwide email traffic will total 247 bil-
lion (update numbers and year) messages
per day in 2009. By 2013, this figure will
Email, however, is largely ignored and NOT
being used to advertise/promote! Everybody
sends email regularly and just about every-
body has a website,
Whether corporate or a social networking
site. Ordinarily a company does its utmost
to build its brand and as an example lets
remember Gateway computer that decorated
its shipping boxes with cow skin prints. We all
remember that dont we? As the only comput-
er company that did this out of the box or in
this case on the box advertising, it miracu-
lously differentiated its computers from all of
its competitors simply through its packaging!
WRAPmail providing the wrapping of
emails is marketing outside the box or in
this inside the box marketing. WRAPmail
is a very unique cloud marketing design to
wrap average everyday ho hum email, you
know, plain vanilla bare bones into a distinc-
tive and unique advertising and marketing
venue called WRAPmail.
. WRAPmail is a revolutionary email tech-
nology platform that seamlessly allows its
users to transform their everyday emails into
an effective marketing program to promote
their brand and recognition, drive traffic,
conduct market research and potentially
increase sales.
WRAPmails patent pending cloud based
technology wraps outgoing emails with
images and links that are used to promote,
sell and advertise the senders brand, product
or services. The technology authenticates the
wrapped emails, maintains design integrity
and ensures images are securely delivered to
the recipients inbox.
WRAPmails user friendly web-based
dashboard (screenshot) allows its users to
define rules to be set such as: assigning spe-
cific wraps for specific senders or assigning
specific wraps for specific recipients, wrap
rotation, dynamic rotation of images in
a wrap and/or live data feeds. Clients can
include or exclude senders to wrap and also
exclude recipients from being wrapped.
In addition, the email owner is able to
easily track and analyze clicks through indi-
vidual text or image links and generate com-
prehensive user friendly reports containing
data of who is clicking on what and when
as well as analyze a particular links perfor-
mance. This data is also available in real time
via email or SMS alerts.
comPetitive aDvantages
WRAPmails competitive advantages are
numerous because it is the first to intro-
duce this proprietary technology to market.
These include:
Industry pioneer with patent pending
technology.
Google solutions provider
Well designed, user friendly interface
Seamlessly integrates with all major web-
based email providers and email clients
S
ocial media, branding and email are all very current topics in todays
business world. It is believed that the largest internet advertising venue
of all is emails.
WRAPmails goal is to grow revenue through imple-
menting a diverse advertising based revenue model like
Google, Twitter, Facebook, LinkedIn and Skype.
Where experts speak and investors prosper.
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Report
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Report
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Report
(*coming soon)
almost double to 507 billion messages per day.
In 2009,(update) about 81% of all email traffic is spam meaning
the remaining 96 billion emails sent daily in 2013 will be one-on-one.
For perspective, there are approximately 1 billion search queries on
Google per day. In addition, Google generated revenues of $9 billion
in the second quarter of 2011 through paid and pay per click advertis-
ing, such as AdWords and AdSense.
Revenue Model
WRAPmails goal is to grow revenue through implementing a diverse
advertising based revenue model like Google, Twitter, Facebook,
LinkedIn and Skype. In addition, WRAPmail intends to offer a rev-
enue share model, similar to Googles AdSense, for example: plan
an affiliate program to motivate students to sign up other students
under the slogan Make money with every email you send anyway.
WRAPmail projects a 0.1% market share of all daily emails by
2013. Using 2010 data this equates to 470 million emails per day. If
1% of these recipients click on a 3
rd
party advertisement, this would
represent 4.7 million unique clicks and the market rate for clicks
revenues could increase dramatically.
Please note that it is common for advertisers to pay in excess of
$1 per click using Googles AdSense and other PPC advertising plat-
forms.
WRAPmail does not focus on mass emails, but rather, WRAPmail
targets on one-to-one emails, a market that is practically untouched.
WRAPmail, Inc. is a publicly traded company and the stock sym-
bol: WRAP, and was incorporated in 2005. WRAPmail is a leading
provider of dynamic, interactive email branding and marketing
solutions.
In summary or to WRAP up, WRAPmail is a viral and user
friendly catchy method to brand email communication. CEO Rolv
Heggenhougen_developed this product with his own needs in mind.
Once developed, WRAPmail caught on from his own outbound
emailing proof positive of his products value. Now its all about mar-
ket awareness and gaining market share and according to Rolv that
too is a WRAP. n
Are You DTC Eligible?
What does it take to get DTC eligibile and what does DTC eligibility mean?
to as chills that DTC places on a relatively
small number of eligible securities. A chill
is a special restriction that can be placed
on a given security by the Depository Trust
Company. Chill restrictions are intended to
limit the potential for problems within the
financial marketplace, and can be placed
on a security for various reasons. An issuer
will often need to engage an attorney or
work with various consultants who have sig-
nificant experience in working with DTC. At
times, the solution for having a chill removed
may be providing certain documentation
and requested items to DTC while at other
times the solution may lie in obtaining legal
opinions regarding the eligibility of certain
shares of common stock.. In conclusion, as a
private company with hopes of going public,
or as a public company looking to trade on
the OTCBB, DTC eligibility will be a critical
part of your existence and add value to your
company. If you are a company that has just
completed the going public process and have
obtained a symbol from FINRA, then it is
likely that time for you to consider the next
steps towards obtaining DTC eligibility. n
Lisa Loew is VP of Business Development for Vstock
Transfer, a NY based stock transfer firm that offers
Issuers online capabilities, cost savings and has assist-
ed numerous public companies (www.dtceligiblity.
com). Vstock Transfer (www.vstocktransfer.com)
was founded and is managed by securities attorneys
who, for the last decade, have also provided SEC
EDGAR filing services, XBRL services, financial print
and general corporate guidance to public companies
and to private companies looking to go public. For
more information please email info@vstocktransfer.
com or call 212 828-8436.
who controLs Dtc
eLigibiLity?
The Depository Trust Company or DTC was
established in 1973, as a result of the Back
Office Crisis or Paper Crunch caused by
the over 400% increase in daily volume of
the New York Stock Exchange from 1960 to
1968. During 1969 the inability for some
brokerage firms to settle transactions cre-
ated enormous backups in deliveries, so that
underperformed obligations could range
from 70% to over 200% of a firms total
assets. As the market turned downward in
1970 over 100 brokerage firms went bank-
rupt or were acquired by stronger com-
petitors due to their inability to maintain
sufficient working capital. Basically, brokers
could not process the paperwork connected
with the settlement of the growing number
of exchange transactions. Several memo-
rable changes came out of this era. Most
notably are the Securities ACT of 1975 and
the SIPC, (Securities Investor Protection
Corporation). The most important changes
may be the least remembered: the formation
of the DTC, the concept of net settlement
and the ability for electronic settlement of
trades.
Dtc eLigibiLity For micro-
caP & smaLL caP issuers
For some companies listed on the Over the
Counter Bulletin Board or the Pinksheets
the process of gaining DTC Eligibility can
be difficult if not impossible, especially for
a company that went public on its own,
without an underwriter or DTC Member
Clearing Firm. In these situations, manage-
ment usually relies on the corporate attor-
ney, accountants or transfer agent for advice
and help. Perhaps the management team
has a relationship with a local brokerage
firm, but that is not sufficient. The answer
lies in having a relationship, specifically with
a DTC Member Clearing firm.. Becoming
DTC eligible allows for trades conducted in
the companys stock to be settled continu-
ously and electronically.
Potential investors in small cap companies
often require that the shares of common
stock of the Issuer be available for electronic
transfer via the DWAC system (Deposit/
Withdrawal at Custodian). In order for an
OTCBB Issuers shares of common stock to
be available for DWAC (electronic issuance
or electronic transfer), the Issuer must be
DTC eligible. In fact, some PIPE investors
may inquire about an Issuers DTC eligibility
status even before they inquire about future
revenue projections.
The insistence by shareholders and poten-
tial investors on the need for electronic
transfer has become even more apparent
since a recent announcement by a leading
clearing firm with regard to securities that
trade under $.10 per share. Due to inherent
volatility in low priced securities and the
concern of illiquidity in such securities cou-
pled with the fact that regulations are more
focused on the deposits of physical certifi-
cates of Pink Sheets or OTC Bulletin Board
companies have prompted some clearing
firms to no longer accepts deposits of equity
securities priced below $0.10.
heLP - i have a Dtc chiLL!
DTCC has experienced an increase in the
number of customer queries regarding
transaction restrictions, generally referred
eases such as HIV and hepatitis C.
There is another key difference in Inovios
quest to revolutionize vaccines. Conventional
vaccines are essentially one drug for one
bug. The vaccine must match the virus that
it is intended to protect against. Inovios
SynCon vaccines, designed using genom-
ic engineering, fight changing, unmatched
strains of diseases such as HIV, hepatitis
C, HPV, and influenza. They also offer the
prospect of breaking the immune systems
tolerance to cancers.
cLinicaL resuLts
Inovio has strong data to back up its enthusi-
asm, showing best-in-class immune respons-
es from recent clinical studies:
Unprecedented T-cell immune responses
reported in two separate phase I studies: one
for cervical dysplasia and another for HIV.
These immune responses were long lasting,
being measured for up to two years in the
cervical dysplasia study.
Significant clearance rate (83%) of hepa-
titis C virus vaccine (in conjunction with
standard of care) in partnered phase I clini-
cal study. This compares to a 40%-50%
clearance rate for the standard of care alone.
Avian influenza vaccine generated HAI
titers (a measure of potential immune pro-
tection) in human subjects against six dif-
ferent, unmatched strains of H5N1 - a dis-
tinct new clinical achievement on the global
research communitys path to develop uni-
versal influenza vaccines.
Animals vaccinated with an H1N1 influ-
enza vaccine designed in 2007 demonstrated
protection against unmatched 1918 pan-
demic H1N1 and 2009 swine flu strains.
Human data is to be reported in Q2 2012.
Synthetic vaccines for influenza Type
I
novio Pharmaceuticals (INO)
Universal Vaccines May Dramatically
Alter the Prevention and Treatment of
Influenza, HIV and Cancers; Novel Approach
Now in Three Phase II Clinical Studies
Before this decade ends, annual flu shots
might become a thing of the past, and threats
such as avian and swine flu might disappear
with them. Thats just part of the coming
revolution in vaccine development accord-
ing to Inovio Pharmaceuticals, Inc. (NYSE
AMEX: INO), which is advancing a whole
new technology approach to the centuries-
old idea of stimulating the immune system.
Do you use products today that rely on
technology that is more than 50 years old?
That is precisely what we are relying on with
conventional vaccines. They use weakened
or killed viruses or parts of viruses as vac-
cines, which can cause the disease. Some are
still grown in chicken eggs. Inovio is pushing
the frontiers with its synthetic vaccine tech-
nology, a new approach to vaccine design,
formulation, manufacturing, and delivery.
synthetic vaccines
Conventional vaccines use a virus or part of
a virus in order to expose a unique antigen,
or foreign protein, to the bodys immune
system so it can create immune memory.
Inovios designer vaccines just give the
body the DNA instructions for the antigen
so that its cells can produce the targeted
antigen and nothing more.
The powerful benefit of conventional vac-
cines is that they generate the antibodies
that prevent targeted diseases from infecting
cells. Inovios SynCon vaccines are also able
to generate powerful T-cells to kill already
infected cells. T-cells are considered vital to
fighting cancers and chronic infectious dis-
PRoFILED ComPAnIEs
an emerging revolution in vaccine
Development
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StockNewsNow
StockNewsNow
A H3N2 and Type B achieved protective
antibody responses in immunized animals
against multiple unmatched strains, fur-
ther validating the potential for a universal
influenza vaccine, which Inovio anticipates
testing in a clinical study in 2013.
inDustry & scientiFic
recognition
Just in the past two years Inovio has wit-
nessed growing recognition for its work to
develop and commercialize synthetic vac-
cines, including:
National Institutes of Health Directors
Transformative Research Award for Inovios
universal influenza vaccine, VGX-3400 --
from the Office of the NIH Director
Most Promising Therapeutic Vaccine:
(VGX-3100, cervical cancer) -- from Fierce
Vaccines
Life Sciences Company of the Year from
The Philadelphia Business Journal
CLARUS Award -- Given annually to pub-
licly traded companies possessing market-
changing intellectual property assets -- from
MDB Capital
Vaccine Industry Excellence Award: Best
Early Stage Biotech, presented at the World
Vaccine Congress
Future Leader of the Biotech Industry
by BioCentury Publications
MITs Emerging Technologies Conference,
Keynote Speaker on Synthetic Vaccines
taLent anD Promise
Inovios management and scientists pos-
sess decades of experience in cutting edge
R&D and clinical development of immu-
notherapies. Dr. David Weiner, a University
of Pennsylvania professor and Chairman of
the companys Scientific Advisory Board, is
a pioneer of synthetic vaccines. CEO Dr. J.
Joseph Kim is ex-Merck. Management has
worked with big pharmaceutical companies
and been instrumental in taking multiple
drugs and vaccines through clinic trials to
commercialization.
Inovios synthetic vaccine pipeline tar-
gets multi-billion dollar therapeutic markets
with unmet needs such as cancers, HIV,
and hepatitis C virus, and offers significant
opportunities for new preventive vaccines
against infectious diseases that change rap-
idly or have unmet needs.
Inovio is advancing with a sense of urgen-
cy to develop and commercialize synthetic
vaccines to prevent and treat cancers and
infectious diseases, with key milestones dur-
ing 2012. The company expects to report
influenza data from two human studies in
the first half of the year and interim data
from two Phase IIs for hepatitis C and leuke-
mia in the second half.
The first reporting of human data over the
past two years has met with progressive suc-
cess. With continuing positive advancement,
we may well look back on the current time
as the emergence of the era of synthetic
vaccines. n
n By vIRgInIA gRAnTIER
physician-patient relationship is primarily
state-regulated, resulting in significant reduc-
tions in expense and time to market. ICVrx
already has conducted preclinical work with
promising results, and has approval to begin
human studies. In addition, pumps, which
are used for drug delivery, are available off
the shelf, and specialty pharmacies are in
place to prepare the drug formulations. The
partnering specialty pharmacies will develop
relationships with treating physicians using
consultative medical professionals.
I am excited about the ICVrx vision, said
Steve Adler, president and CEO, Medasys,
Inc., one of several companies that will
manufacture pumps. The potential growth
ICVrx offers to the pump market alone, from
the current world-wide implantable pump
market of approximately $600 million rev-
enue expansion into the epilepsy market
should grow the pump market to well over
$1 billion globally.
The ICVrx drug reformulation/licensing
approach reduces cost and time-to-market,
and is a business strategy that distinguishes
ICVrx from traditional pharmaceutical com-
panies. The Company has attracted interest
from the investment banking community
for several reasons: the business model, the
significant unmet medical need, the mar-
ket size and the projected profit margins.
Abrams said that upon adequate funding,
the Company targets having epilepsy drugs
available for needy patients through phar-
macy licensees by Summer 2014. ICVrx is
planning to protect its portfolio of intel-
lectual property by patenting its epilepsy
therapy, along with future therapies to com-
bat diseases such as depression, diabetes, and
schizophrenia, to name a few.
ICVrx A Transformative Drug Company for the
Treatment of Epilepsy and Other Brain Disorders
A
desire to help millions of critically ill
refractory epileptics the 30 percent
of epileptics whose seizures cant be
controlled by oral medications has led to
the development of a medical technological
approach that world-renowned neurosur-
geons and neurologists are calling transfor-
mative. The expected worldwide impact
of this treatment, developed by Colorado
psychiatrist and neurosurgeon, Dan Abrams,
founder and chief executive officer of ICVrx,
LLC, has the ardent support and guidance of
an assemblage of world leaders in the fields of
medicine, pharmacology and business.
Abrams explained that some patients with
refractory epilepsy may experience 25 sei-
zures daily. They worry about dying every
single day of their life. They cant work, cant
live predictable lives. Its not really living,
also, efforts to stem seizures with oral medi-
cations cause other problems. The drugs
diffuse through the body and, while non-
toxic to the brain, often are toxic to other
organs. This new medical approach using
programmable pumps implanted under the
skin to transport ICVrx reformulations of
anti-epileptic drugs directly to the brain
has also resulted in a feel-good business
opportunity.
Abrams says the Company is involved in
doing something important for human-
kind, for the epilepsy patient population,
which is larger than all sufferers of multiple
sclerosis, Parkinsons disease and brain can-
cers combined. The market share for ICVrxs
epilepsy therapy, along with a future depres-
sion therapy, has an estimated $4 billion
drug market potential in the underserved
initial target markets. ICVrx, a private com-
pany founded in 2010, with plans to become
a public company, is essentially creating a
new treatment category for brain diseases by
reformulating available drugs into medicines
that are safe for direct-to-brain delivery
and epilepsy is only the first target.
Neurosurgeon Ali R. Rezai, the incoming
president of the Congress of Neurological
Surgeons, a lead investigator on Medtronics
Deep Brain Stimulation for depression study
and professor and chair of Neurological
Surgery Research at Ohio State University
College of Medicine, says for those suf-
fering with common chronic neurological
disorders, ICVrxs innovative targeted thera-
peutic approach provides a new hope and
the potential to live with better quality of life
and functioning.
Rezai also commented that the ICVrx
team is highly qualified, motivated and
innovative.
ICVrxs concept is a game-changer, said
Elad Levy M.D., one of a world-renowned
group of New York neurosurgeons respon-
sible for transforming treatment of brain
vascular diseases. ICVrxs approach uses
simple surgical techniques, in combination
with available medications, to effectively
treat epilepsy that does not respond to stan-
dard medical therapy.
Abrams said that the market has been
historically hesitant to invest in medication
development because of the time and expense
involved in todays regulatory process. But
ICVrx has a different scenario. ICVrx antici-
pates revenues beginning in 2014, with a
projected budget of less than 10 percent of
the cost currently estimated for new drug
development. There are several reasons
for that: ICVrxs licensed reformulations use
currently approved FDA drugs that are com-
pounded by pharmacists under special order
from treating physicians. The pharmacy-
Dan Abrams,
founder and CEO
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Warren Lammert, chairman and co-
founder of the Virginia-based Epilepsy
Therapy Project said recently that, ICVrxs
team has a remarkable and broad range of
expertise and accomplishment in research,
therapeutic development and patient care.
The ICVrx team includes world leaders in
medicine and business: 1) ICVrx Advisor
Robert Fisher, M.D., professor of neurology
and director of Stanfords Epilepsy Center,
lead investigator on Medtronics Deep Brain
Stimulation Trial for Epilepsy and former
president of the American Epilepsy Society;
2) ICVrx Manager Larry Fenster, M.B.A., has
20 years of experience in early stage/startup
companies including merger, acquisition and
turnaround and 12 years as a Fortune 500
company executive; and 3) ICVrx Advisor/
Board Member Stephen J. Farr, Ph.D., with
15 years of experience in public and private
management of pharmaceutical companies,
i.e. Zogenix Inc. and Aradigm Inc. and is an
expert in central nervous system drug and
device development.
Dr. Abrams, CEO, is the former head
of neurosurgery at St. Josephs Hospital in
Denver and has put together a great team of
neurosurgeons, epilepsy physicians and neu-
ropharmacologists to bring this project to
fruition, Fisher said recently. Dr. Ashwini
Sharan is a highly experienced functional
neurosurgeon expert in new technologies to
treat epilepsy who was a valued collaborator
on a new treatment using electrical deep
brain stimulation. Dr. Leppik is one of the
worlds foremost experts on pharmacology
of antiepileptic drugs, as well as a great epi-
lepsy clinician, and the past president of
the American Epilepsy Society. Dr. Farr is a
Ph.D. pharmacist and drug delivery expert,
with unique experiences in founding and
holding high-level management positions in
pharmaceutical companies with innovative
drug and device combination products as its
core business.
This is a group of experts in their respec-
tive fields that has the enthusiasm, capabil-
ity and synergy who will make this com-
pany a success, said Dr. Fisher, who has won
numerous research awards. Dr. Fisher is a
recipient of the Ambassador Award from the
International League Against Epilepsy and
has been listed in Best Doctors in America
annually since 1996. Dr. Fisher is editor
in chief of epilepsy.com and his research
focuses on new treatment devices for epilep-
tics. Dr. Fisher said he is very hopeful that
the intraventricular approach of ICVrx will
provide a high, steady level of drugs where
they are needed to stop seizures.
Dr. Abrams, a clinical assistant professor
of psychiatry and neurosurgery at University
of Colorado Medical School, stated, ICVrxs
business plan is unique, in the current mar-
ket, enabling management the potential to
provide a promising answer for many suf-
fering patients in a relatively cost and time-
efficient manner.
To learn more about ICVrx, go to ICVrx.
com.
ICVrx technology development began in
2005 at the University of Colorado from the
disciplines of neurosurgery pharmacology,
medicine, psychiatry and neurology. Since
that time the company has refined its busi-
ness model, licensed the intellectual property
from the University of Colorado, and moved
from the earliest animal stage studies into
clinical studies.
ICVrx has attracted investors such as the
Epilepsy Therapy Project, a non-profit organi-
zation dedicated to accelerating new therapies.
The diagram shows an implantable pump,
as it will be used for brain drug admin-
istration, with ICVrx patentable formula-
tions. The FDA-approved intrathecal pumps
already have 22 years of proven safety and
efficacy in spinal drug delivery. Installing
the pump, manufactured in the U.S., is a
40-minute procedure that neurosurgeons
already are trained to do and is easily revers-
ible. Recuperation time is about one day.
The pump and catheter will be placed under
the skin in a brief surgical procedure that is a
standard and widely practiced neurosurgical
procedure. The pump is filled with medica-
tion every three months in a 10-minute office
procedure. ICVrxs brain-drug administra-
tion combines use of currently available drugs
with available hardware for refractory brain
diseases. ICVrx has developed drug reformu-
lations for refractory central nervous system
diseases including epilepsy, depression, post-
traumatic stress disorder and schizophrenia. n
Virginia Grantier is an award-winning journalist
based in Colorado who has researched and written
about health and medical developments as well as a
variety of other areas. She has worked as an editor,
but most of her career has been spent as an enter-
prise reporter covering government, education and
public safety for numerous newspapers including
The Denver Post.
Disclaimer: This corporate profile is based upon
information provided by a company representative.
The information is not intended to be, and shall
not constitute, an offer to sell or solicitation of any
offer to buy securities. It is intended for informa-
tion purposes only, and to increase awareness of the
company profiled.
Safe Harbor Statement: The statements in this
profile relating to future products, partnerships, tech-
nology, and positive direction are forward looking
statements with the meaning of the Private Securities
Litigation Reform Act of 1995. Some or all of the
aspects anticipated by these forward looking state-
ments may not, in fact, occur. Factors that could cause
or contribute to such differences include but are not
limited to contractual difficulties, demand for com-
mon stock if it is issued, and the companys ability to
obtain future financing. Micro-cap Review Magazine
may have received payment to publish and print this
advertorial or corporate profile. Micro-cap Review
Magazine disclaimers apply and may be reviewed at
ww.micorcaprivew.co/disclaimer.php. Before invest-
ing in any security, you are strong advised to review all
public filings of the issuer of such security, which can
be found at www.sec.gov as well as warnings published
by the SEC at www.sec.gov/investors and to consult
with your investment professional,
Please note that this notice also includes
a NATIONAL RISK EXAMINATION
ALERT, in Cooperation with the SEC
Office of Compliance Inspections and
Examinations (OCIE). It appears that
FINRA is reverting to some of its old tricks
of the tradeenforcing notice to members
as though they have the impact of rules.
In this case, I believe FINRA is doing the
industry a favor. When many of the new
rules were drafted, commented and enacted,
the idea of principle based regulation was
alive and well. With the activities over the
last decade, principle based regulation is
all but dead and FINRA has seen the need
to provide greater guidance on how firms
interpret the many and various rules that
broker-dealers must decide how to live with.
Regulatory Notice 11-54 is a good example
of how this happens.
11-54 prescribes, Incorporating find-
ings on results of branch office inspections
into appropriate management information
or risk management systems; and using a
compliance database that enables compli-
ance personnel in various offices to have
centralized access to comprehensive infor-
mation about all of the firms Registered
Representatives and their business activities.
Such a system appears to be highly useful
to the compliance personnel at the OSJ and
elsewhere for quickly accessing information
and for supervising independent contractor
Registered Representatives dispersed across
a broad geographic area. This is an exact
description of BDAudit, our proprietary
web-based system for conducting, record-
ing, reporting and archiving branch office
audits for offices of any description.
Below is the link to FINRA Notice 11-54:
ht t p: / / www. f i nr a . or g / I ndus t r y /
Regulation/Notices/2011/P125205
For a full seven page Report on Notice
11-54 by The Compliance Department, Inc,
please contact:
chebert@thecompliancedepartment.com.
The Compliance Corner
Regulatory Notice 11-54
LEgAL TAX ACCoUnTIng
n By ChET hEBERT
R
egulatory Notice 11-54 was issued by FINRA with very little
fanfare; however it packs a wallop!
K-2 Potash Property, Neuquen Province:
Marifils K-2 potash property comprises
79,964 hectares and is close to the Vale
property. Marifil geologists discovered this
property by analizing electric and gamma
ray well logs from abandoned oil well holes.
This work identified a large area containing
more than 20% KCl at depths of 1,300 to
1,500 meters. This deposit could contain as
much as 250 million tons of potash.
K-3 and K-4 Potash Properties, Mendoza
Province: Marifils K-3 and K-4 potash
properties were also identified by searching
oil well logs of abandoned wells. As a result,
the Marifil team staked the two properties
which cumulatively cover more than 139,000
hectares. We have identified four important
potash targets ranging in depth from 220
to about 700 meters. The Company has
begun an active marketing program to find
a suitable joint venture partner for these
properties.
Las Aguilas Nickel and Platinum Project,
San Luis Province: Las Aguilas is a nickel,
platinum, copper, gold, and cobalt property
which has a NI 43-101 compliant indicated
and inferred resource of 4.9 million tons
grading 0.65% nickel equivalent. The depos-
it is open-ended in several directions.
Marifil has a joint venture with Prophecy
Platinum Corp. whereby Prophecy can earn
up to a 70% interest in the property by pay-
ing Marifil $300,000 over three years and
paying Marifil 300,000 shares over five years.
In addition, Prophesy is required to provide
a feasibility study within five years (feasibil-
ity studies for this project could easily cost
more than $20 million).
Toruel Silver Copper Project, Rio Negro
Province: Toruel is a joint venture with
Netco Silver Inc. Netco has the right to
earn up to a 70% interest by paying Marifil
$400,000 in cash, 3.7 million shares, spend-
ing $2.8 million in work on the property,
and providing Marifil with a feasibility study.
Marifil is a junior mining company which
trades on the Toronto Venture Stock
Exchange under the symbol MFM.
Marifil operates exclusively in Argentina.
Argentina is a large country with a modern
mining law which offers secure tenure for
mineral rights, has a transparent legal and
accounting system, and is under explored.
Marifil has acquired a large portfolio of
important precious metals, base metals, and
industrial minerals properties. Our business
model is to acquire properties cheaply, spend
money on them to improve them, and then
bring in larger, better funded companies to
develop them through joint ventures, spin
outs, or sales. In this manner Marifil is
able to develop properties without diluting
shareholders with constant equity sales to
fund exploration. As a result, Marifil is now
developing a significant cash flow from cur-
rent joint ventures and expects to increase
this cash flow in subsequent years.
This year the Company has realized more
than $800,000 in property payments. This
is unusual because this makes us one of the
few junior mining companies in the world
which has cash flow. In addition, over the
next few years, our joint venture partners
will be spending more than $13.8 million on
our properties.
ProPerty highLights
San Roque Gold, Silver, and Base Metals,
Rio Negro Province: San Roque is one of
our flagship properties. San Roque is a
very large sulfide system with disseminated
and stockwork lead and zinc mineralization
spread over an area of more than 12 square
kilometers. This mineralization includes
important amounts of gold, silver, and indi-
um. Indium is an important component
used in the manufacturing of flat screen
TVs and in solar panels. The ore target at
San Roque is a bulk tonnage deposit grading
PRoFILED ComPAnIEs
marifil mines Ltd. (www.marifilmines.com)
perhaps +1% lead plus zinc, 0.3 to 0.7 grams
per ton gold, 3 to 20 grams per ton silver, and
10 to 40 grams per ton indium.
Marifil has joint ventured San Roque
with NovaGold Resources Inc. (NovaGold).
NovaGold has agreed to spend $9 million on
the property to earn a 70% interest. During
the earn-in period they will pay Marifil
$100,000 per year. In March 2011 NovaGold
completed its first drill program. This pro-
gram hit several important intercepts as
follows:
DH MSR 0009: 120 meters at 1.16 g/t
gold, 10.3g/t silver, 39 g/t indium, 0.43%
lead, and 2.04% zinc which equates to 3.1 g/t
gold equivalent.
DHMSR 0013: 144.5 meters at 0.20g/t
gold, 25.5g/t silver, 5.1g/t indium, 1.25%
lead, and 1.73% zinc which equates to 1.7g/t
gold equivalent.
These are very significant intercepts that
suggests that there is good potential for a
large, bulk mineable gold, silver, and base
metal deposit.
NovaGold subsequently completed a sec-
ond round of drilling in October. Assays are
expected to be provided in January 2012.
K-2, K-3, AND K-4 are our three potas-
sium properties located in the Neuquen
Sedimentary Basin straddling Neuquen and
Mendoza Provinces. Potassium is an ele-
ment that is essential for plant and animal
growth. The market for potassium is huge
and growing. Current prices are approach-
ing $600 per ton and prices are expected to
exceed $600 per ton in 2012. Marifil is very
well placed to capitalize on this huge grow-
ing market.
Vale, the giant Brazilian mining com-
pany is currently spending $6 billion to
develop the Rio Colorado potash mine in the
Neuquen Basin. This mine has a resource of
more than two billion tons of potash (KCl).
Marifils properties are in the same basin and
are an extension of this giant deposit.
Marifil can either then participate at the 70% level or elect to be car-
ried through to production and retain a 25% interest.
The Toruel property contains a large number of epithermal gold,
silver, copper, and lead veins and vein breccias occurring within a
structural corridor +2 kilometers wide and +8 kilometers long. The
main Toruel vein is 1,900 meters long and up to 15 meters wide.
Mineralization occurs as gold-silver bearing tetrahedrite (a com-
plex copper, arsenic, antimony sulfide) and silver-bearing galena (a
lead sulfide). Two of the better drill intercepts on this property are
as follows:
DH-24: 5.0 meters at 964 g/t silver and 4.95% copper
DH-32: 6.7 meters at 1998 g/t silver and 5.34% copper
Between Drill Holes 2B and DH-34 we have identified a section of
the vein 600 meters long with a true width of 3.2 meters grading 490
g/t silver equivalent + 1.49% copper. This mineralization is worth
$560 per ton at current prices.
other ProPerties
Marifil tries to maintain a pipeline of properties so that once a prop-
erty is sold or joint ventured we have one or more new properties to
replace it. Our current pipeline includes:
Lithium Brines in Jujuy and Catamarca Provinces
Cerro Samenta, Salta Province: A porphyry copper and an oxide
copper prospect which may contain up to 40 million tons at a grade
of 0.5% copper amenable to low cost open pit mining and heap leach
copper extraction.
Sulfur and Phosphate in Mendoza and Neuquen Provinces
Maquinchao, Dos Lagunas, and Los Menucos epithermal gold sil-
ver projects, Rio Negro Province
Ferrocarillera and Arroyo Verde epithermal gold silver projects,
Chubut Province
Maipu epithermal silver zinc project, Santa Cruz Province n
StockWord Puzzle
TM
answers
SuperCrosswordCreator! Name:________________________
Date:________________________
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K
N A T I O N A L I N V E S T M E N T B A N K I N G A S S O C I A T I O N
S U L O A
K N L O L V
C O M C D E
S E W E L E N O R V E R A M A T O S S A
T S S T E D O T C I T
O S U P E R W O M A N V R C E
C L R M A T W I T T E R M C
K P R X H O P O
N H E I F O R E X C T M
E I S S P C A R T O O N P C
I W D O L E V E L S P R L A
N S M A R G I N B U L L I O N D M I V
T N T R V I S I B I L I T Y P A C K A G E
E O I C O O K C O C O N A
R E V I E W O U N C E E I U F R A N K N T T
N N S M N O E T M E
A V P R D B T R I M
C A L D E R A F I E L D L L R R W A N P
F B I O T E C H A Y E O R E T
I Q N S N V N Z W R I R O
X U S D X S H A F T H O U S E K A A R
R A R E E A R T H E L E M E N T S V X L S N R I N L
T S O A E U E Y N R
I T C Y N E A R T H G E
O I K H T B E M S
N O S A U H K E X C I O
S N T L R Y T A N U
Y A R L E D O U G J A M I S O N E R T
S I A N R K R C R
T R D D E M A E A
E E D P I P E P O R T F O L I O N
M K I L L E R A L G O R I T H M R U W C S
S E B O O K T A V E R A G E F
F L T E
L U I L P R E M I U M R
R A R E E A R T H E X P E R T M A R K E T O R D E R S G A
V A A T O G
R I C H A R D B E C K E R N R R E V E R S E
O R Y I C A L D E R A I N
L A U A E E L L I S T
D G W R A P M A I L L T S
E L
Every great achievement starts with a dream,
a vision. A vision of something grand, some-
thing truly outstanding and something last-
ing that will stand as a testament to the
visionaries. Such is the stuff of mineral explo-
rationists. These are people who are not afraid
to dream big, people who can see what can be.
Mineral explorationists are frontiers man and
woman. They embrace substantial risk in the
hope of achieving something truly great.
A junior resource exploration company is
the embodiment of visionaries. The compa-
nies are managed by people from all walks of
life who want to develop a world class mineral
deposit. Like biotech start-ups they live from
milestone events to milestone events, seeking
enormous amounts of capital in the hope
they can create an asset that will return poten-
tially billions of dollars to their investors.
Cream Minerals Limited, a silver-gold
exploration company from Vancouver,
Canada, the capital of junior mineral resource
exploration companies, is developing what
it believes will be a world class silver-gold
deposit in Mexico. Cream was formed in
the late 1960s and spent many years explor-
ing a variety of properties none of which
returned results of any significance. Then,
in 2000 the Company staked and subse-
quently acquired 100% ownership to Nuevo
Milenio, a silver-gold property in Nayarit
State, Mexico. Low metal prices that per-
sisted for many years and a lack of significant
funding limited exploration work at Nuevo
Milenio. Despite these and other obstacles
Fred Holcapek, P.Eng, Creams head geologist
and German Francisco, Geologist, persisted
and in December 2008 defined a NI 43-101
Compliant Inferred Mineral Resource of 54.6
million ounces silver equivalent, or 41 million
ounces silver and 271,500 ounces gold. The
resource estimate assumed a cut-off grade of
131 g/t silver equivalent highlighting average
PRoFILED ComPAnIEs
cream minerals Limited
The Anatomy of a Junior Resource Exploration Company
grades of 251 g/t silver and 1.66 g/t gold. At
the time the resource estimate was completed
silver was $USD10.28 per ounce and gold was
$USD816.09 per ounce.
Like many areas of Mexico, the Tepic region
was explored and mined by the Spaniards
up until just over 200 years ago. Nuevo
Milenio contains many Spanish workings
(old mines) some of which are comprised of
shafts up to 30 metres deep with three levels
of drifts (tunnels) extending outwards where
the Spaniards would have mined very high
grade gold and silver.
Nuevo Milenio is a low sulphidation epi-
thermal precious metals deposit containing
silver-gold mineralization within quartz veins
and quartz stock work zones. The mineraliza-
tion is set in a collapsed caldera. Regionally the
caldera is contained within an early volcanic
caldera field of the Sierra Madre Occidental
Volcanics, which in turn is traversed by the
Tepic-Zacoalco rift zone, a structural zone
forming the boundary zone with the Jalisco
block. The Tepic area is overlain by the young
volcanics of the Trans Mexican Volcanic Belt.
Historical volcanic activity of this magnitude
is very important as it suggests the possibility
of highly mineralized zones to be discovered.
Nuevo Milenio is comprised of 2,560 Has of
which Cream has only explored 600 Has.
The mineralization within the caldera is
comprised of three distinct zones that trend
SE/NW and are open in both directions and
at depth. The current resource is comprised
of three higher grade quartz veins that reside
within the eastern rim of the caldera. The
balance of the resource is contained within
a zone on the floor of the caldera. Within
the eastern rim of the caldera there is the
possibility of two or more additional higher
grade veins to be drilled off and on the floor
of the caldera there are five known zones that
require additional drill testing. Employing
the three year average prices for silver and
gold the zones on the floor of the caldera
represent open pit mining potential while the
veins within the eastern caldera rim represent
underground mining potential.
Nuevo Milenio is approximately 140 kms
north east of Puerto Vallarta and only 27 kms
from Tepic, the capital of Nayarit State. Tepic is
an important commercial centre with a popu-
lation in excess of 300,000 people. Access from
Tepic is 24 kms by highway and paved second-
ary road and 3 kms by dirt road. Quality infra-
structure including the Tepic Airport, water,
power and a railway are all within 14 kms of
Nuevo Milenio. This is a very important fea-
ture of Nuevo Milenio as it substantially reduc-
es infrastructure investment, an important
component of mine development investment.
In the fourth quarter of 2010 Endeavour
Silver Corporation launched a hostile take-
over bid for Cream. After three months, in
early December 2010 Endeavour dropped
its takeover offer. One effect of the takeover
offer was to highlight Cream and in particular
Nuevo Milenio to the mining community and
junior resource investment community as a
desirable asset with significant potential. Such
was the perceived potential of Nuevo Milenio
that offers of financing on favourable terms
were received by Cream.
In 2010 Cream closed a $CDN6 million
bought deal financing that resulted in Sprott
Asset Management and Pinetree Capital
Limited becoming the Companys largest
shareholders at approximately 16% each.
Armed with a new financial war chest Cream
spent 2011 conducting a 20,292 metre drill
campaign totalling 89 drill holes focused on
upgrading a significant portion or the current
resource from the inferred category to the
indicated category and expanding the current
resource. Cream has assay results from 21 (to
be confirmed) drill holes pending release in
Q1 2012. In addition the Company will be
releasing a new Mineral Resource Estimate
by the end of Q1 2012. Following that Cream
will embark on another significant round
of exploration drilling targeted at increasing
the size of the silver-gold resource, the next
step in building a world class silver and gold
deposit. To be continued n
atossa genetics
New Pap test for Breast Cancer Launched
adoption of the Pap test has led to a 75%
reduction in the incidence of cervical cancer
and Quay believes that a similar result is pos-
sible for breast cancer.
NAF analysis provides the same oppor-
tunity for breast cancer, the most feared
malady for women worldwide, he said.
Quay, 61, a former faculty member of
the Department of Pathology at Stanford
University School of Medicine, is known for
past accomplishments such as the invention
of five drugs including Gadolinium, a drug
used routinely during MRIs to brighten
organs so tumors and other abnormalities
are more easily spotted.
Current mammography procedures can
detect cancer that is already present, Quay
said. But in a sample of NAF, a pre-cancer-
ous condition called atypical ductal hyper-
plasia, or ADH, can be detected up to eight
years before cancer is found by mammogra-
phy. Quay, who worked as a post- doctoral
fellow for Nobel Laureate Gobind Khorana,
added, ADH is a condition in which cells
lining the breasts milk ducts grow abnor-
mally, creating a higher risk of cancer devel-
opment. Studies have suggested that mam-
mography fails to detect ADH in more than
90 percent of patients, and that ADH can be
definitively diagnosed only by NAF analysis
or an invasive breast tissue biopsy.
If precancerous conditions are found in a
NAF sample in Atossas lab, the current care
plan is to make specific lifestyle changes that
may reduce the risk of breast cancer, while
increasing the schedule for breast imaging,
including MRI.
But Quay wants to go further, by develop-
ing drugs that can be delivered directly into
the duct where the precancerous cells are
ProceDure shows great
Promise; is being useD in
meDicaL Practices since
December 2011
A new, FDA-cleared medical device and pro-
cedure that can identify breast cancer issues
up to eight years before cancer is diagnosed,
is being launched across the U.S. this year,
says its developer, Steven C. Quay, M.D.
Ph.D., FCAP, who was named one of the
Pacific Northwests Top Leaders in Health
Care at a 2011 Seattle ceremony.
The procedure can be thought of as a Pap
test for the breast. It comprises a device and
method for the collection and laboratory
analysis of cells contained in nipple aspirate
fluid, or NAF, to identify precancerous cellu-
lar changes and other cancer flags, explained
Quay, founder of Atossa Genetics, Inc., a
privately held health care company based in
Seattle, Wash., that is marketing his inven-
tion the Mammary Aspirate Specimen
Cytology Test (MASCT) System.
Quay and others involved with Atossa
which is named after ancient Persias Queen
Atossa, the first woman in recorded history
to be diagnosed with, and who later died
from, breast cancer are dedicated to pre-
venting breast cancer by early detection of
pre-cancers and then treatment.
Its a tragedy that one woman dies from
breast cancer every minute in the United
States. We believe we can do something
about this, he said.
Quay explained the MASCT System works
on the same principal as the Pap test in
that it can identify pre-cancerous cellular
abnormalities that can be treated in order to
prevent progression to cancer. Widespread
PRoFILED ComPAnIEs
located, thereby treating the condition while
avoiding the side effects associated with sys-
temic delivery.
With the help of Dr. Susan Love, a
renowned breast cancer researcher and a
clinical professor of surgery at UCLAs David
Geffen School of Medicine, Atossa is devel-
oping drugs for the treatment of precancer-
ous abnormalities, along with technology to
deliver the drugs directly into the milk ducts
using a device designed by Dr. Love.
While treating breast cancer when it
is found can be daunting, reversing pre-
cancerous ADH should be a lot easier, Quay
said.
One of Atossas Scientific Advisory Board
members is Tim Hunkapiller, Ph.D., a pio-
neering presence in computational biotech-
nology for 30 years, and the co-inventor of
the biggest selling analytical research instru-
ment in the world: the Perkin Elmer/Applied
Biosystems DNA sequencer.
Atossa Genetics ForeCYTE Breast Health
Test
[sm]
is an exciting new breast cancer
risk assessment test that I believe will be
recognized by physicians and patients as
one of the most important new tools in the
fight against breast cancer, said Hunkapiller,
who is the founder, president and chief
scientific officer of Seattle-based Discovery
Biosciences Corporation, which provides
technical consulting and commercialization
services to both established and upcoming
biotech companies.
Future generations of products and ser-
vices being developed by Atossa have the
potential to change the way we think about
and treat ADH in order to prevent breast
cancer, Hunkapiller added.
Also on the Scientific Advisory Board
is Edward Sauter, M.D., Ph.D., associate
dean for research at the University of North
Dakota School of Medicine and Health. He
is widely recognized for his research and
clinical experience in breast cancer. Among
his accomplishments, Dr. Sauter and a team
of researchers pioneered noninvasive and
minimally invasive techniques to predict
breast cancer risk using nipple aspirate fluid.
Atossas MASCT System holds promise to
serve as an important adjunct to mammog-
raphy for the benefit of patients, he said.
Quay, Atossas chairman, president and
CEO, has successfully launched six start-
ups and made about one billion dollars in
the past for investors. Atossa has attracted
about 200 investors and last year raised $6.6
million in funding. Since initially launch-
ing the MASCT System in December 2011,
selected doctors are now using it in their
practices. The plan is to introduce the test
more broadly in the U.S. in 2012.
Doctors already using the procedure have
been sending samples to Atossas wholly
owned National Reference Laboratory for
Breast Health, located in Seattle. Medicare
will reimburse the lab approximately $380
for each test; private insurance is typically
charged at a higher rate.
Quay said he anticipates that the MASCT
System will be used initially in conjunction
with standard mammography or cervical
Pap test exams. Atossas NAF collection pro-
cedure takes about five minutes, is painless,
and, importantly, uses no radiation.
In addition to whats expected to be a large
role in the battle against breast cancer, there
is the potential for significant revenue. Quay
said he hopes that in the future Atossas
procedure will be routinely performed at
the same time as a woman has her annual
Pap test. About 55 million pap tests are per-
formed in the U.S. annually.
Atossa believes that its technology is
protected by a strong intellectual property
estate. Atossa owns the rights to six U.S. pat-
ents and fourteen foreign patents covering
the manufacture, use and sale of the MASCT
System, as well as pending patent applica-
tions for improvements, and the FDA mar-
keting authorization for the MASCT System.
Quay said he began to formulate the
MASCT System about 10 years ago after
he learned more about the work of now-
deceased Dr. Georgios Papanikolaou, devel-
oper of the Pap test. Papanikolaou stated in
1954 that the same type of process as the cer-
vical Pap test could be used for breast health.
Quay said that through the years medical
devices have been designed, but were only
successful in obtaining nipple aspirate fluid
samples from between 39% and 66% of
patients because of the pumps dependence
on applying negative pressure to the nipple
to induce fluid expression.
Quays MASCT System overcame this
by placing a hydrophilic, or water-seeking,
membrane in contact with the nipple during
the cycles of negative pressure to wick fluid
from the orifice of the ducts by capillary
action. In a 2003 clinical trial, the MASCT
System collected measurable fluid and sam-
ples were deemed to be clinically useful in 97
percent of the women tested.
After learning about Quays improved
device in 2011, renowned cancer researcher
Dr. Nicholas L. Petrakis, professor and chair-
man emeritus of preventive medicine and
epidemiology at University of California San
Franciscos School of Medicine, told Quay
he thought Quays device solves the nipple
aspirate fluid collection problem we have
had for over 50 years and should help save
lives from breast cancer.
In a letter Atossa sends to doctors, the suc-
cess of the Pap test is emphasized. Annual
cervical cancer rates have dropped from 150
per 100,000 to 8 per 100,000. Meanwhile,
breast cancer rates stubbornly remain at
about 350 per 100,000 per year.
The Pap test is the most successful
screening test in the history of medicine,
Quay states.
Now, Atossa and its advisors are working
to get the word out about their procedure
and its similar potential.
To learn more about Atossa Genetics and
its National Reference Laboratory for Breast
Health, go to http://www.NRLBH.com. n
Mergent's Investor Relations Services
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lor more inormation, please contact Joan lelder, Director Inestor Relations.
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Lmail: joan.eldermergent.com
\ebsite: www.mergent.com
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MFM_MCRAd_1112_PRINT.pdf 1 11-12-14 2:15 PM
In the past trust was the basis for a business relationship. Most transactions occurred
by and between two parties that understood the risk and its rewards. That has mutat-
ed into litigation and distrust. We are at a crossroads in this country trying to do the
right things in an immoral milieu. How we proceed is up to everyone being more
diligent in how one approaches any transaction. The Broke rage industry has been por-
trayed in a negative light. Being timorous will only result in more abuse and potential
failure in this New Year.
Being involved in the financial industry for more than thirty years has led me to a
number of conclusions. Change is inevitable and trying to maintain the current posture
operating the Broker Dealer no longer works. Being your own compliance officer takes
entirely too much time away from all the other duties. Hiring someone is too costly in
many cases. There are firms out there that can provide the proper guidance to perform
these services. Out sourcing is the most prudent way to handle these concerns. Make
certain you do your proper Due Diligence on these entities and engage the ones that
come recommended by at least three references.
Hire a good attorney to assist you in navigating through the maze called FINRA. My
suggestion is finding someone that has had success with FINRA in the arbitration arena
as well as negotiating the path of internal fines and/or censorship. They exist and are
negotiable in fee schedules that can be within your budget. At a conference in August
of 2011, a high ranking member of FINRA urged the Broker Dealers present to use the
office of the Ombudsman. How ironic, that is how I began my initial article for this
magazine. One must make a conscious effort to improve the odds against them in this
time of vicissitude. Do not be diffident, instead be proactive examine your weaknesses
and find solutions that will rebuild trust that the Banks caused the investors to lose.
The movie Inside Job narrated by Matt Damon should be viewed by anyone in the
industry. It should give one a better understanding of how and why we are at this junc-
ture and why the distrust is so prevalent.
ombudsman
v I E W P o I n T s
I
n this
environment
of regulation
and uncertainty
one has to be
extraordinarily
vigilant.
n WRITTEn By JACk LEsLIE
20
%
of the w
om
en
d
iagnosed this year
are younger than 50
*
The ForeCyte Breast Health Test provides a
personalized cell-based approach for identifying
breast cancer risk by analyzing Nipple Aspirate
Fluid (NAF) collected with the FDA-cleared,
patented MASCT device.
ForeCYTE is to breast health what
PAP smears are to cervical health.
Make
part of every womens
health care routine.
Learn more at www.atossagenetics.com
* NAF-Wrench et al JNCI 93: 1791, 2001, Mammo-Baines et al Radiol 160: 295, 1986
SNN_ad_FINAL.indd 1 1/30/12 9:37 AM

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quarter 4 2011 microcapreview.

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