What were they thinking…

First, I must apologize for the dearth of information on the public markets and financing techniques therein over the last four months coming from our BLOG.  Our associated group of organizations (Rhodes Holdings LLC, ReCap Marketing & Consulting LP, and American Equity Fund LLC) have been involved in a number of actions to protect shareholder value as well as having been asked to put together a number of “go public” projects for clients.  With that said, expect a new focus on providing a look into what is going in the public markets…

OTC Markets

Since the Jumpstart Our Business Startups Act (“J.O.B.S.“) Act was signed into law on April 5, 2012, there has been a “promise” in the air that it would help get capital formation for the micro-cap market started again.  This really hasn’t happened since the Congress and President can’t seem to get their acts together (pun intended), and the Securities & Exchange Commission (“SEC“) hasn’t released the details on how it will enforce the J.O.B.S. Act provisions, like changes to internet marketing of stocks (general solicitation).

OTC Markets Group Inc. had hoped that this Act would help drive their business, but alas FINRA is all about limiting the markets that OTC Markets Group Inc. serves by making it impossible to deposit shares in Pink Sheet companies as well as OTC:BB companies.  The crux of the problem that those of us working in the

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

micro-cap arena are facing is that even if you follow all the rules (register your shares, pay cash for stock, etc.), the broker dealers and their compliance departments are running scared of the SEC and FINRA’s rules, so stock just doesn’t get sold.  If no stock gets sold, that capital doesn’t get re-invested into other micro-cap stocks – thus, the velocity of money associated with micro-caps has ground to a halt.  Read what OTC Markets Group Inc. has to say:

• “Slow PO to the Public Markets“

In a few cases, it has eased regulation and shown that at least some of those in Congress listened.  The J.O.B.S. Act did make it so that issuers did not have start filing SEC mandated disclosure statements (10Q, 10K, 8K, etc.) until they reach 2,000 shareholders – previously it was 500 shareholders triggered filing requirements.  Read CFO magazine‘s article on banks de-registering:

• “JOBS Act Opens Path to Deregistration“

All in all, the J.O.B.S. Act has not helped us reach its stated goal – helping jump start capital formation.  It may still help, but those of you who thought that crowd funding was going to take over capital formation, it hasn’t delivered the goods.

Accredited Investors

The J.O.B.S. Act did make some changes to the accredited investor definition, which would be very helpful.  The original 1933 Act definition is as follows for Rule 501 definitions.  Here is what the General Counsel of Second Markets had to say about the proposed implementation in his letter to the SEC.  In general, we at Rhodes Holdings LLC are keeping track of what is happening in the marketplace that will make it easier for our clients to access the capital they need.  Here are some websites associated:

• Certified Accredited Investor
• Accredited Investor Solutions

Related Articles

• Waiting on the JOBS Act (axialmarket.com)
• Crowdfunding awaits key rules from SEC (sfgate.com)
• JOBS Act Expected to Increase Diversity in Funding (entrepreneur.com)

 

New OTC Market regulations

Within the OTC Markets Group monthly newsletter, there is an interesting announcement on OTC Market Regulation & Compliance.

FINRA Rule 6433 On August 5, 2012 FINRA announced that the SEC-approved amendments to FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) will become effective on November 5, 2012. This has been approved as a 1 year pilot period. The new quotation sizes are as follows: Price (Bid or Offer) Minimum Quote Size (# of Shares) $0.0001 to $0.0999 10,000 $0.10 to $0.1999 5,000 $0.20 to $0.5099 2,500 $0.51 to $0.9999 1,000 $1.00 to $174.99 100 $175.00+ 1 For full details of this announcement, please see: FINRA Regulatory Notice 12-37.

So what does this mean to the average investor?  Well, if there is a penny stock out there, the minimum order you can place is 10,000 shares, which equates to $1.00.  Would anyone ever place a market order for $1?  Not a retail buyer since a retail buyer’s stock trade fee wold be at $10 (Schwab or Ameritrade) and then there are market fees of probably $2 on top of that.  On the market maker side though, you would see trades as small as this because their fees are much smaller.

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© 2012 by Rhodes Holdings LLC, all rights reserved except excerpts from the FINRA notice.

 

Turbine Truck Engines retains Hydra Power Distributors to build distribution channel

Reblogged from Hydra Power Distributors LLC:

(Original press release) PAISLEY, FL (August 2, 2012) - Turbine Truck Engines, Inc. (OTCBB:TTEG) retained Hydra Power Distributors, LLC ("HPD") to develop and grow TTEG’s sales channel for its Hydrogen Energy Production Systems (“HEPS”). HPD will initially concentrate on the creation of joint ventures with internationally-based public, private, and government sponsored entities in order to build a stable and much larger distribution network throughout the world.

Read more… 422 more words

Robert C. Rhodes is the Chief Financial Officer (CFO) for Hydra Power Distributors LLC.

 

IGSM retains Re-Cap Marketing and Rhodes Holdings for go forward planning

Fort Lauderdale, FL, – (Marketwire, July 18^th, 2012) – IGSM Group, Inc. (PINKSHEETS: IGSM) retained Re-Cap Marketing, LLC and Rhodes Holdings LLC (“RHL”) to refine the Company’s business plan, implement successful strategies for the Company’s merger and acquisition program, and implement a sound foundation for future growth.  The IGSM business model has yielded a diverse group of subsidiaries and opportunities that have heretofore lacked a cohesive and repeatable process for success.  Coming on the heels of achieving “OTC Pink current” status, RHL will help IGSM document and implement the best practices of successful reporting publicly held companies in order to yield better value to IGSM shareholders.

“Rhodes Holdings is taking our IGSM business model and documenting, refining, and suggesting standard operating procedures that will provide a basis for building value for our shareholders.  Management believes that forthcoming communication of our plan will be concise, integrate with realistic funding, and allow us to continue operations,” said IGSM Group, Inc. Chairman and CEO Mr. Francis Fytton.  “Our ‘go forward plan’ phases are: Phase 1 is documentation of current operations and structure, Phase 2 is assembling the team, and Phase 3 is re-structuring and funding ongoing operations.”

In the coming weeks, IGSM will provide new investor materials and commentary from management on the refined IGSM business plan and its implementation.

About IGSM Group, Inc.

IGSM Group, Inc. (“IGSM”, http://www.igsmgroup.com), headquartered in Pompano Beach (Ft. Lauderdale), FL is a holding company currently seeking solid acquisition candidates that meet the Company’s criteria and are willing to enter the public markets through the Company’s incubation process.

About Rhodes Holdings LLC

Rhodes Holdings LLC (“RHL”, http://rhodesholdings.wordpress.com) provides management consulting services that allow its clients to seek financing through the public markets, either through mezzanine debt, equity, or bank debt.  RHL management consulting is provided within the framework of its copyrighted and RHL Methodology documented.

Safe Harbor Statement

The statements in this release that relate to the Company’s expectations with regard to the future impact on the Company’s results from new products in development are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The results anticipated by any or all of these forward-looking statements may not occur.  The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in the Company’s plans or expectations.

Contact

Investor Relations
investor@igsmgroup.com

 

More information on DTC Chills and DTC Eligibility

For some information straight from the DTCC on the issue of DTC chills, this article entitled, “DTCC Takes on Microcap Fraud” is a good one to read. (Thanks to Graham Williams for this information)

David Feldmanon the Reverse Mergers & SPAC board website posted another article entitled, “
Company Demands Appeal of DTC Refusal to Permit Electronic Trading “, which sets up what we should do, but see my comment… How much and who?

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© 2012 by Rhodes Holdings LLC, all rights reserved.

Related articles

• OTC Markets, SEC’s DTC rulings, and politics as usual (rhodesholdings.wordpress.com)
• SEC Order DTC to Adopt Fairness Procedures [Brenda Lee Hamilton] (ecademy.com)

 

OTC Markets newsletter a treasure trove

Each month, OTC Markets puts out a newsletter that always holds some unique treasure for issuers, their management team, and investors in general.  This month’s is no different.  Take some time and read the April 2012 OTC Markets’ Newsletter.

Related articles

• February 2012 OTC Markets Newsletter

 

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© 2012 by Rhodes Holdings, Inc., all rights reserved.