OTC Markets Group Inc.

Good morning and welcome to the OTC Markets Group Second Quarter 2021 Earnings Conference Call. I would now like to turn the conference over to Mr. Denzin, so you may begin.

Thank you, operator. Good morning and welcome to the OTC Markets Group Second Quarter 2021 Earnings Conference Call. With me today are Cromwell Coulson, our President and Chief Executive Officer, and Antonia Georgieva, our Chief Financial Officer. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations, and as such, may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the risk factors section of our 2020 annual report, which is also available on our website. For more information, please refer to the Safe Harbor Statement on slide three of the earnings presentation. With that, I'd like to turn the call over to Cromwell Coulson.

Cromwell Coulson Thank you, Dan. Good morning, everyone. Thank you for joining us today. I would like to begin by expressing my admiration for the incredible work by our team this quarter. I remain extremely proud of our colleagues' commitment to our values and operational excellence. Their dedication to serving our clients, improving our systems, and staying connected has delivered outstanding results for our shareholders. We continue to work towards bringing our team back together in person while prioritizing our colleagues' safe return to work. Our goal remains to inspire individual contributions, foster productive collaboration, and most importantly, maximize our collective success. Our results this quarter and for the first half of 2021 reflect the dedication of our people and our ability to provide dynamic solutions for our clients in a rapidly changing environment. we have experienced increased demand for our products and services across business lines, which in turn led to record financial results. Gross revenues grew 49% and net income grew 67% compared to the second quarter last year. As a result, our earnings per share and operating profit margin also experienced significant expansion. Antonia, will cover our financial results in more detail in a few moments. With the SEC's amended Rule 15 compliance date quickly approaching on September 28th, we have also been preparing for the increased responsibilities in our role as a well-regulated market operator. Building a strong regulatory foundation as a qualified interdealer quotation system under the rule will support our future ability to enhance the value of our markets for public companies, bring efficiencies to broker-dealer trading processes, and digitalize useful data for investors. Trading volumes remained robust during the second quarter, and we are pleased to report another quarter of providing reliable, consistent service to our broker-dealer subscribers. The secure, compliant, and effective operation of our regulated ATS systems is a collaborative team effort. We have to earn our subscribers' trust each new trading day. Our focus on serving subscribers and keeping our markets running underpins our mission to create better informed and more efficient financial markets. We serve that mission through our complementary business lines. We deliver mission-critical market infrastructure for broker-dealers. We bring the benefits of public trading to a broad spectrum of securities, and we efficiently fulfill the capital formation needs of a diverse range of U.S. and global companies. We continue to invest in our people and platform to increase earnings power for shareholders in the years to come. Throughout the first half of the year, we have discussed the creation of a third ATS named OTC Link NQB. We are excited to introduce this ATS as a fully attributable interdealer quotation system with matching engine functionality. The addition of OTC Link NQB complements our existing regulated ATSs and allows our subscribers to choose the market model that best serves their clients' trading needs. We expect OTC Link NQB to be operational during the third quarter, and I look forward to discussing that along with other market enhancements in the future. Our corporate services business, achieved a major milestone this quarter, surpassing 500 companies on the OTCQX market. This journey began with just 10 founding companies and now includes a diverse range of industry leaders, innovators, and emerging companies, which represent 24 countries across the globe. It has been a privilege to become the market of choice for these groundbreaking public companies. We thank you all for your support of the OTCQX market as we continue to build this market. Our OTCQB venture market finished the quarter with over 1,000 companies, further showcasing the value of our data-driven market standards and technology platform. During the second quarter, we also saw a significant increase in the number of companies seeking to use our disclosure and news service to disseminate current public information in large part driven by the upcoming changes to Rule 15 C-211. This level of increased interest in our markets reinforces the vital role we play as a global gateway for companies to access the U.S. market in an efficient and cost-effective manner. Our market data licensing business also experienced strong results during the second quarter, continuing to build from the broader interest and participation in our markets. We continued to expand our reach by adding distributors internationally, and our enhanced compliance data is providing value throughout the industry. Working together, our business lines provide a dynamic platform, allowing public companies to engage with their investors and demonstrate compliance with securities laws, providing efficient trading and improving compliance processes for broker-dealers. On the regulatory front, we are focused on implementing changes related to the SEC's amended Rule 15-C-211. The rule's compliance date arrives in less than two months from today. We remain engaged with the Commission and SEC staff to ensure an efficient industry-wide rollout of the new standards this September. During the quarter, we conducted broker-dealer, issuer, and investor-focused webinars and published additional material describing this important change. Earlier this week, the SEC staff released a notice indicating that the SEC chair does not intend to move forward with the proposal to create an expert market operated by OTC Link. This means securities of issuers that do not comply with the rules disclosure requirements will not have proprietary market maker quotes in our expert market. No information stocks will still fall to our expert market after the compliance date and will be available only for unsolicited quotes from broker-dealers representing limit orders of investors not affiliated with the issuer. It is important to note that while the new rule will prohibit broker-dealers from publishing proprietary quotations in securities that do not provide adequate current information, there are no reductions in FINRA best execution obligations or restrictions in the rule on broker-dealers trading those securities as an agent or principal. As we enter the second half of 2021, we remain well positioned to execute on our three primary strategic initiatives this year. First, we must successfully implement changes related to amended Rule 15C-211. The rule offers us an exciting opportunity to enhance the level of disclosure available for investors, create efficiencies for broker-dealers, and bring more companies public onto our markets. Second, we will remain laser-focused on improving the functionality and ensuring the reliability of our trading systems. The increased trading volumes and innovation in our markets provide opportunities for continued growth, and we must continue to deliver reliable, compliant, and efficient trading systems. Finally, we must support the growing number of issuers that rely on our OTCQX and OTCQB markets to inform their investors, be efficiently traded by broker-dealers, and demonstrate compliance with securities regulations and good corporate governance. In closing, I am pleased to announce that on August 2nd, our Board of Directors declared a higher quarterly dividend of 18 cents per share, payable in September. This dividend, which is an increase of 20%, reflects our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia.

Thank you, Cromwell, and welcome to everyone on the call today. I would like to start by thanking our team at OTC Markets for the unwavering commitment to serving our clients and subscribers. We're excited to report another quarter of strong results across our businesses. In the following discussion of our results for the quarter ended June 30, 2021, Any reference made to prior period comparatives will refer to the second quarter of 2020. During the second quarter of 2021, we continued to benefit from strong sales and issuer engagement, the same we saw beginning in the latter part of last year and during the first quarter of 2021. We also continued to see robust volumes of trading activity on our markets, albeit moderated from the unprecedented levels reached earlier in the year. We also benefited from the continued strong demand of our market data products. As a result, we concluded the second quarter of 2021 with 25.5 million in gross revenues, up 49%, with strong performance across all three business lines. OTC Link saw another quarter of triple-digit growth quarter over quarter, with revenues up 110%. driven mostly by a 326% increase in revenues from OTC Link ETN. Contributing to the growth were also message revenues from OTC Link ATS and QAPP One Statement fees. OTC Link benefited from a robust trading environment with volumes on the ETN increasing more than fivefold from the prior quarter to reach approximately 46,000. Additionally, During the second quarter, we added two new subscribers to OTC Link ECN and ended the quarter with 84 subscribers, up from 64 as of June 30, 2020. Transaction-based expenses, comprised of rebates paid to subscribers providing liquidity to the ECN, increased 310%, or $1.9 million, in line with the increased volume traded. Our market data licensing business saw a 25% increase in revenues versus the prior quarter. Revenues from professional users increased 14%, while revenues from non-professional users increased 96%. Each of those driven by a 14% and 75% increase in pro and non-pro users respectively. As a reminder, please keep in mind that the transaction-based revenue and expenses that OTC Link generates are correlated with the volume of trading activity and future volumes are highly uncertain and cannot be predicted. Furthermore, while we have experienced substantial increase in nonprofessional users since March of last year, that number tends to fluctuate significantly in response to volatility in the market and changes in retail trading interest. so we may experience a decline in the number of users in the coming months. In our corporate services business, strong sales and issuer engagement, as well as the price increases that became effective January 1, 2021, led to revenues increasing by 40%. OTC QX revenues increased 51% quarter over quarter. 70 new issuers joined our QX market in the second quarter, up from 19 in the prior quarter. We ended the quarter with 530 companies on the QX market, up from 415 as of the prior quarter. OTCQB revenues increased by 31%. Again, strong new sales, as well as issuers seeking to enhance disclosure in advance of the compliance dates for amended Rule 15C211 in September, drove the increase in companies on the QB market. We added 112 new issuers during the quarter to reach 1,020 QB companies compared to 45 new subscriptions and 885 companies as of the prior quarter. We also saw a significant increase in the number of applications for our disclosure and news service as issuers seek to comply with the rule as well as continued strong interest in our virtual investor conferences. We have built a strong pipeline of opportunities that is continuing in the third quarter of 2021. Turning now to expenses. On a quarter-over-quarter basis, operating expenses increased by 19%. Compensation and benefits with a primary driver increasing 15% quarter-over-quarter. with professional and consulting fees and IT infrastructure costs also contributing. The increase in compensation primarily reflects an increase in incentive comp as well as an increase in commissions related to the higher sales we had in our corporate services business. Professional and consulting fees increased 48% largely due to an increase in clearing and regulatory compliance fees related to the higher volume of trading on OTC Link ECM. IT infrastructure costs increased 20%, primarily reflecting continued investment in support and enhancing the growth of OTC Link. In summary, the second quarter of 2021 marked another quarter of revenue growth, our 18th consecutive. Our businesses delivered 91% quarter over quarter growth in income from operations and 67% growth in net income. Our operating profit margin expanded to 37% compared to 29.2 in the prior quarter. We also utilize EBITDA, a non-GAAP measure, which excludes non-cash stock-based compensation expense. For the second quarter of 2021, Our adjusted EBITDA was up 74% to 10.3 million. Cash flows from operating activities during the second quarter amounted to 11.5 million, up from 4.2 in the prior quarter, reflecting the significant growth in net income and a favorable change in working capital. Free cash flows for the quarter were 11.3 million compared to 4.1 million in the prior quarter. As in previous periods, we remain committed to returning cash to our investors. During the second quarter of 2021, we returned $1.8 million in the form of dividends, which was up approximately 1% compared to the prior quarter. We also remain focused on growing our business and delivering long-term value to shareholders. With that, I would like to thank you again for joining us on the call. We will now open the discussion for questions.

If you would like to ask a question, please press star, then the number one on your telephone keypad. Again, that's star, then the number one on your telephone keypad. Your first question comes from Carl Morris with Edison.

Hi, guys. Can you hear me? Yes, all clear. Okay, great. Thanks for taking my questions. It's the first quarter for me, so excuse me if I ask something that has been previously asked in the previous sessions. I want to say, looking at your numbers, wow, congratulations. What a great quarter. And it's a brilliant sort of quarter to start our coverage for myself. Anyway, so for the first question on expenses, I haven't really seen any commentary on how much are variable and fixed. I just wanted to get a sense on the operating leverage in the business. I've covered a number of European exchanges in the past and just wanted to get a comparison. On the second one, on Rule 15C211, it looks like a great opportunity for you guys. I see you have over 500 or 1,000 copies in QX and QB. How has this Rule 15C211 played in this development? Has this occurred in the second quarter, or will we be looking at something perhaps maybe in the third? And, yeah, any sort of, like, you know, commentary around that going forward, that would be great. On capital distribution is the third question. Can you remind me of your thinking here? I see the dividend is up an impressive 20%. I also know you have a buyback authorization. So I'm just wondering what your thinking is around buybacks and how you think about returning capital. And then finally, just a short bit of retail activity. I see, you know, obviously retail is back. What's your views on that? Do you think it's here to stay, or how do you think about retail going forward? Thank you.

All right, that's an aggressive list, Carl, but we're going to do what we can to get to all of those. I think we'll try to take them in order, I believe, and I think that first question was related to expenses, so Antonia can address that.

Thank you, Carl, for the question. In terms of the variable fixed mix, you could look at these transaction-based expenses as well as elements of our professional and consulting fees as being the primary components of variable expense. Within comp and benefits, the commission is also a variable expense, and the rest of the expense infrastructure is largely fixed. or has elements of both fixed and variable that doesn't move directly with the volume of activity?

I will jump in on 15C211, and Cromwell may add his thoughts as well. Just kind of as a baseline, what this rule does is, in terms of its impact on issuers, is require that current information be continuously publicly available in order to be the subject of a public broker-dealer proprietary quote. And so for issuers on our OTCQX or OTCQB markets, because of our standards and the type of disclosure that they're typically making public, they're already covered, they're already compliant under the rule, and there's not really a concern there. where we see a lot of the impact is with respect to companies that are seeking to gain that sort of current disclosure recognition. And so those that may not have been making current information for quite some time, it certainly adds to the attention paid to our markets across the board. And so that is absolutely playing into some increased interest in some of our services, particularly our disclosure and news service. And I think the influx of companies you've seen on OTCQX and OTCQB are partly related to more eyes on our markets, but also you have to understand kind of where 15C211 impacts the business and where there's really just a higher level of interest from companies that were making that kind of disclosure available anyway. McCromwell may have some additional thoughts.

You know, quarter to quarter is great to have a fantastic quarter like this and have the you know, and have a regulatory wave behind it, which is the SEC saying, if you want a public quote, a company should provide public disclosure. It's a very simple fare. If you want a public quote, company should provide public disclosure. And the SEC is really recognizing the framework that, you know, both, you know, my colleagues at OTC Markets, but the community of of issuers who care about their shareholders have built up. And on that side of it is the long trend is our markets are becoming well-regulated markets. The commission FINRA has been very collaborative at the staff level to keep improving the quality of regulation in our markets that will drive transparency and efficiency, and market efficiency. So those sides of, you know, the long trend is that those are happening. There's a hard date to really push companies along. But over time, we're going to see, you know, the opportunity to building our companies we're building our regulatory foundation today around two 11, but then there's going to be on top of it is a commercial framework of creating greater value because as a qualified inter dealer quotation system, you know, we gain the power to onboard new securities in a more efficient way and provide more value to companies when they're effectively entering public markets or ringing the bell in a digital manner. And two, you know, We monitor the ongoing disclosure, which is responsibility of management and directors, but just to confirm that ongoing current information is publicly available. And that's going to bring efficiencies to the market and drive more you know, make it easier for broker-dealers to know which securities to trade and to trade more easily. It's going to help them expand their compliance processes, and it's going to organize the market better. So, you know, overall, this is part of the trend to our markets becoming well-regulated.

I think the next question was with respect to capital distribution, and I think Antonia is going to jump in on that one.

Certainly. As we announced, we are very pleased with a 20% increase in the dividend, and that continues a long tradition of paying out a significant percent of our cash flows to shareholders. With respect to the buybacks, we do have a 300,000 share authorization from our board of directors. We balance the buybacks with the characteristics of our stock and the available liquidity. We predominantly use the stock buyback to offset the dilutive impact of our equity incentive comp and to offer employees the ability to cover tax liabilities related to their equity-based compensation. And that has been our capital allocation policy unchanged for a significant amount of time. Very consistent.

And that's just at a high level, Carl, how I think about we have an ongoing dividend which provides income to shareholders. When we have an end-of-year dividend, a special dividend, which we do it as that because it gives us flexibility that if we were to do acquisitions and we didn't have excess capital at the end of the year, we wouldn't be changing our regular quarterly dividend. And, you know, we look at the two places that we look at is how does, you know, how would our buyback affect liquidity and what is the capital efficient manner of for dividends. And with tax policy changing, you know, we're going to be taking a look at it and, you know, we're very focused on total returns for shareholders over the long term.

I guess if the dividend is up 20%, does that mean, I guess, there's not really many acquisition opportunities out there that you see?

I mean, I think the quarterly one is really about regular income to shareholders. It's the special dividend that we do at the end of the year that gives us flexibility in our capital structure if we found an acquisition that we really liked.

And, Carl, we have maintained throughout our history a conservative balance sheet with significant cash on hand, no debt, but we do have access. to the capital market in case there is an attractive M&A opportunity that we identify so we feel confident we can act on those.

What kind of acquisition would be attractive?

Sorry, say that again, Carl?

Sorry, in terms of M&A acquisition, what kind of acquisition would be attractive to you guys? I mean, what areas? would you actively look at in terms of your business profile?

Ones that create value for shareholders. Ones that create value for shareholders. As a significant shareholder, that's the spot. There's a lot of different ways to look at it, and I don't really want to box myself in. But my favorite book of CEOs is The Outsiders.

That's a homework assignment. I think the last question, Carl, was with respect to just retail activity kind of overall. I don't know that we have any special insight that's not already out there in the market. So, you know, wouldn't want to be speaking out of school. I don't know if Carmel has any additional thoughts there, but I think what you see in the news is probably as much as we'd be able to provide you.

I mean, if you'd asked me on Friday looking at Robinhood stock, I might say the market has a different answer than yesterday. And that's the spot is we don't know what's great about, you know, in the exchange space, when we started out, we were subscription driven and everyone else was transaction driven. And there was this whole view that we were so smart for being subscription driven and everyone's trying to become all subscription driven. I actually think you don't, really want to go to one end of the scale or either. And what's good about a strong subscription baseline is you can support transaction businesses to clients in areas that fit their business needs too. And you're not creating a huge risk where your whole business is stuck transactional. And so you can support both of those. So we're really agnostic. We like it when the markets are doing well, that it gives us a way to provide more services and more value to our clients. But we do not predict it. The main thing for me is having lived through numerous market cycles is – you know, having the type of structure to survive until the next good set of waves come. And, you know, if you go surfing, that crash zone takes a lot of people out.

All right. Well, Carl, thank you so much for the questions. We really appreciate it.

Look forward to talking to you again. Congratulations. Thanks a lot.

Thank you.

Your next question is from Chris McGinnis with Siddoti.

My question is, and obviously congratulations on some strong results. Just around the corporate services and the increases on the markets that you saw, obviously really strong. I guess how much of that is around 15C to 11, and then I know you've also invested in your sales force over the last year or so. I guess can you just maybe describe parse that out a little bit if you can, or provide a little bit more color around the new companies joining? Thanks.

I mean, you know, I'll go to another wave analogy. When two waves come together, they make a bigger wave. And so we've had one side, which you can look at the calendar of coming to the exchanges, which is interest in capital markets. interests in public companies when markets are liquid, public companies are engaging shareholders. So we have that, and then we have the regulatory side, which is we've been building an infrastructure which is in many ways quite disruptive. to the exchange model because it takes a baseline of what are the services you need to be a public company. You need a place where brokers can trade your stocks. You need to supply the consistent ongoing disclosure publicly so the market can price off more than just supply and demand. You need to demonstrate both your compliance and your credentials. with securities law, your corporate governance. And, you know, we've really created a process which allows people to do it, you know, electronically. And it has great flexibility based on different disclosure standards, based on different geographies. But, you know, the North Star is adequate current information for investors. And that platform... So that platform has been there, and then now you have a lot of times people spend time saying, okay, can we get the regulators to write something so everybody will go do it? But really, the regulators in this time, they're codifying what are the best practices which companies have been doing in our market for a while. And it is definitely moving forward some late movers, but it's, you know, and that, you know, has given, you know, a lot of work to be done by our corporate compliance team.

If I can add briefly, we all are well-served to keep in mind that 2020 was a tough year, particularly the first half for sales in our businesses and companies dealing with a global pandemic and reevaluating their strategic priorities at the time. So we see some recovery of the demand for our corporate services stemming off of delayed corporate decisions that may have been pushed out from 2020. And to your question specifically, we reported 70 new companies joining the QX market. during the quarter, and we had 112 joining our QB market, which was significantly stronger relative to last year. And again, Q2 of last year is a challenging comparison considering the impact on the global economy, where we only saw 19 companies joining QX and 45 companies joining QB. Male Speaker 1 Right.

And I guess, So maybe to extend the question, has that rate of growth or have you seen the continued strength of more companies coming on since the end of the quarter?

We certainly have. We highlighted our disclosure and new service products as well as one area where we have seen significant interest from companies who are able to use our DNS products to meet the compliance requirements under amended rule 15C211. We encourage companies to submit their applications for our DNS service well in advance of the compliance date to allow our insured services team to process those applications. So we saw naturally an uptick in interest in that product at the end of second quarter, which is continuing throughout the third quarter as well.

I'll just say with respect to OTCQX and OTCQB, from a disclosure standpoint, it's always easy to talk about those because it's so public, right? You can see when new companies join, and that has continued to happen.

And also, Chris, as we look at our sales pipelines of application being processed, one of the standards of having a market standard is companies that apply are rejected that are rejected because if everybody gets in it's not really a market standard so you know we do have a queue is a good strong queue but but of of applications but until it's gone through the processing side is you know it's it you know we're we we uh you know it's it's not money in the bank okay

And maybe to keep going on this point, but you mentioned 500 companies on the QX, over 1,000 on the QB. Is there any limitations of how many you want, or is that kind of an infinite number to some degree?

I mean, personally, I'd like every company that is not in the S&P 500 to I think our markets could be. We still have some things we need to achieve. We need some regulatory recognitions. You know, there's some places to go. But, you know, data-driven markets with, you know, that are about financial standards, demonstrating corporate governance, you know, these processes, we believe, are important. much better than private clubs with membership committees.

Interesting. And then just one more last question. Just around 15C211, as we get closer to that, is there any expectation of maybe more cost coming into the model offhand, or obviously you've done a great job at leveraging kind of the recent success especially?

I mean, we're always going to invest in our people and platform. You know, we want to be, every time we get more customers, you know, there's an opportunity to really build the framework, the commercial framework of value on top of it. And, you know, the product we have today is going to be much improved in five years, and that will take people and platform. So, you know, but we're... You know, we've always been thoughtful to invest within our means. I think it's one of the most important things of a business is your products and services are only worth what your clients are willing to pay for you. That's great.

And you have to live within those means. Right. All right. Well, thank you very much for taking my questions. Congrats on the quarter and good luck in Q3. Thank you, Chris. Thanks, Chris.

Your next question is from Daniel Baldini with Albarian.

Hi, good morning. So I have a question and a comment. I'll start with my question. And the question is simply, could you talk about the threat arising from blockchain technology? And let me just read a quote from an interview with the CEO of Albarian. blockchain network called Solana, which just raised $300 million. And the question was, Solana is often labeled as an Ethereum killer. How do you feel about that characterization? Mr. Yakovlenko replied, we've always had our sights on much bigger dragons. So the seed deck for Solana said it's a blockchain at NASDAQ speed. This idea of running such a limit of order books on-chain wasn't targeting Ethereum. It was targeting these financial institutions like NASDAQ. All of those institutions can be disintermediated with commodity hardware, commodity software run by volunteers around the world. So, anyway, you read these comments from the blockchain people and you wonder what the threat is to folks like NASDAQ and OTC markets and so forth?

I mean, I think blockchain is a fabulous laboratory for innovation. The real question is, and slightly because the OTC markets has always been a gateway for innovative companies as they've built their way into the regulatory and compliance world. I mean, we have GBTC, which is one of the largest Bitcoin publicly traded product, which has incredibly tight spreads, is free to trade through Robinhood of Schwab and other places, is a product. And the only inefficiency is not from our market structure. The inefficiency is that the SEC... has chosen not to let them allow cancels and issuances at this point. So the inefficiency, which is the discount or premium to the market, is just created by the SEC holding back on their Reg M powers. And there's nothing that says the SEC can't give Reg M relief to an OTC-traded security. Will they do it? because their preference is to protect NASDAQ and protect the New York Stock Exchange? That's a question. But I think a greater side is it brings in that our markets are within the regulated wall. And if you use the Game of Thrones reference, you know, we're the North. But the blockchain right now, especially for securities regulation, is outside the regulatory world. And how they come in, when they come in, there's going to be this whole regulatory structure that needs to fit in. We spent 20 years bringing a half-regulated market into a well-regulated and transparent position. And I see it as a huge opportunity as these start to come in. I don't know what happens. you know, maybe one of these barbarians will come crush us all or, you know, eat us. But otherwise, I think as the regulated world comes through, you know, there's going to be opportunities as the regulatory framework is defined. What's slightly exciting for me, what is exciting for me is, well, I don't think anything's going to move incredibly quickly, is regulators are now starting to move forward. The last SEC chairman had a rule of no. And the new SEC chair has a rule of let's bring on the investor protection, let's enforce securities regulations, but let's move pragmatically forward. And that's going to bring these things into the market. And it's going to look not unlike the cannabis industry. where it went from an illegal activity to a regulated activity. And there's going to be a lot of opportunity, a lot of speculation, a lot of innovation, and a lot of ideas that we think are fantastic today that don't work out, and some ideas that we're completely dismissive of that turn out to be genius.

Okay. Well, I hope you... That's my thought on it. But right now... Big opportunity.

Yeah. How it comes through, but we cannot take part in the opportunity when it involves securities violations. We are a regulated entity. And if you look at the precursors to the ECNs that disrupted NASDAQ, many of the people who ran those ECNs were run out of the business by regulators. And you can do that if you're outside of a regulated industry, but you can't if you're within.

Yeah. Okay. All right. So my comment relates to 15C211. So we own shares of one of these companies that isn't making information available called the Aztec Land and Cattle Company. And last Thursday, I got a letter from them saying, Dear Aztec stockholder, on September 16, the SEC adopted amendments to Exchange Act Rule 15C-211. The rule imposes new information disclosure requirements. And I'm just sort of reading sentences from this. In May, we received communication from OTC Market Group, a private company, indicating that OTC would exclusively determine the sufficiency of the required information in order to publish OTC Inc.' 's bid and ask quotes and notifying us of its charges. Late last week, it came to our attention that OTC had posted a warning under its report of Aztec's stock quote on its website, even as OTC is processing our application and has the information it warns about. The warning prompted a letter last Wednesday from Aztec's lawyers, a copy is attached. OTC has to date not responded to our attorney's letter nor to our calls. So then I went to the website to see what information is up there, and this was at 5 p.m. last Thursday, and the website was down. It was down for like 15 or 20 minutes. So my comment is, you know, with the demise of FINRA's system, you're the only game in town for these companies. And, you know, if they're – I don't know if Aztec's exaggerating things or not, but, you know, if you're sort of upsetting them and the website goes down from time to time, you'll eventually invite scrutiny and – no competition. So that's my only comment.

Dan, thanks so much for the comment. You're correct. We did hear from Aztec's counsel, and so there's only so much we can say, except that I have responded numerous times to their counsel. The warning label that they refer to is something that we put up for every no information company. So all those companies that have a stop sign logo placed next to their stock symbol because there's not that degree of current information publicly disclosed. Those warnings have been there for, I think, something like seven years on every stop sign company. There's certainly nothing that's been recently placed. You know, to your larger point about, you know, where we sit versus FINRA, you know, the rule allows for companies, for brokers to continue to file Form 211 as they do today to invite FINRA to ensure that the information is there. and if FINRA approves a 211 and allows for quotes, that's certainly still a possibility under the rule. Where we have been sort of given a larger role here is just given the ability to confirm that the information is there because the SEC has looked at the systems we've had in place for years, not only for the pink market in terms of current limited or no information, but the OTCQX and OTCQB markets as well, and all of the market standards that we've been able to put in place there. And the SEC, as a result, determined that the industry should be able to rely on our determinations. And so we've spent a lot of time building the compliance processes required to make those determinations under the rule and make that publicly available to everybody. We are excited to continue working with companies like Aztec and others that may not have had public disclosure out there, that was available to all but that would like to and that are now, you know, seeing this rule and maybe shining an additional light on the disclosures that they put out there, that's all to the good for the market. We're happy to be in that position. We're happy to continue to work with FINRA and the SEC as the rule rolls out and moves forward. And with respect to Aztec, we can certainly talk offline and, you know, I'll keep you up to date on our additional communication with them.

Thanks, Dan. And on the website, you know, is, you know, on our website, we have been getting the scraper attacks more. But that side of it is, as we put in, if you send me the time when you looked at it and stuff, I'll get you a report of what happened and what was the side. But that is an important thing, is as we go to the public side, our public website is not an area where information comes in. It's a display side, but it will become more important as time goes by. And our uptime is super important.

Yeah. Okay. Well, many thanks. Keep up the wonderful, great work.

Yeah. I mean, you know, there is... The SEC has changed what they expect of companies who are getting a free ride of having a public market but choosing the level of disclosure they would provide. And, you know... That is a choice that was made at the Commission. Yeah.

Okay.

All right, well. Thank you for the questions, Daniel.

Yep. Thanks for your time.

Great. Bye.

At this time, there are no questions.

Thank you, Operator. I want to thank all of you for joining us today. I would encourage each of you to read our full earnings report and the earnings press release. Links to both are available on the investor relations page of our website. On behalf of the entire team at OTC Markets Group, we wish you and your families continued health and safety, and we look forward to updating you on key initiatives that continue to shape the integrity and competitiveness of the public markets.

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