Earnings Call - ECO WAVE POWER GLOBAL AB (PUBL)

Hello, everyone, and welcome. You know, in the capital markets, we all have opinions, and we all have misconceptions, but numbers really are challenging what we think we know, and what you might have picked up from that last presentation, And I'm proud to say that that process, that collecting, that mechanism is something that we've been creating. And I'd like you all, if you haven't downloaded the app that was provided to you with the link that came with the NEBA email, if all of you haven'T received it, take a look at your email. And what you'll be able to do early on, like now, perhaps, is take a little questionnaire. It's like a quiz. some things that you might not know about or that you know a lot about or that you think you have the answer to and who knows maybe you do maybe you don't the numbers are going to tell so wonderful to see all of you all of you familiar faces my name is Andrea Catania many of you I've seen at Neva for 20 plus years and lots of you are new faces and couldn't be more delighted to be here on this panel of esteemed folks who are going to tell you an awful lot about what's going on with the exchanges and, you know, clear up some mysteries for us. And I'm also kind of on a cloud, no exaggeration, to be with Lekoski-Brookman. I joined Lekhoski-Brookman in April and I'm a capital markets attorney for 27 plus years and it's just been a fabulous new home for me an entrepreneurial roll up your sleeves firm that really is trying to make a difference in the microcap space and I'd really like you if you have a moment to engage because this is your opportunity to not only ask questions of us during the presentation which you'll be able to do with that link come up with us afterwards if you'd like but during the presentation you're going to have an opportunity to ask questions and they're going to be filtered to my esteemed partner amit hazan and they'll come to us so everything that joe covers about data that you may or may not know and things that we hope are educational or we hope are reinforcing you're gonna have an opportunity to ask questions and we will do our very best to get them to our esteemed panel and what we're gonna do once you know Joe arrives is we're going to introduce everyone briefly but I'd like them all to say a little bit about themselves you know 30 seconds or so because I think you've heard of many of these folks you may know them or you may be delighted to meet them for the first time so tomorrow conduct why don't we start with you this is a small advisory firm getting companies listed helping them maintain their listing American just yelling hello oh okay but you can hear me I'm I'm sure and I'm director at Roth Capital Partners their investment banking firm that group so we advise companies in all kinds of transactions these back transactions IPOs up listings from OTC markets cross-border listings our expertise I believe there's no company that can do that it's comprised of all ex-NASDAQ and New York Stock Exchange ex-employees. So if you have any questions related to initial listing, continued listing, we are the firm to help. We actually represent 65% of the companies that go into the appeals hearings process with NASDAQ. If I may, one of the reasons that I thought of you for this panel, and you'll hear from these other exchange leaders, is the NASDAQ expertise that you bring with your 13 years there. We're hoping you'll be able to shed some light because you'll see from our conversation there's a lot of mystique and confusion going on. So I'm delighted to have you maybe tap into some of those issues when asked. And Paul, if you don't mind, I think you need no introduction, but perhaps you can let everyone know who you are if any of you in the room don't know Paul. My email is jeff.karcher at no. Paul Dorfman, head of listings for NYC American. I've been there forever before this, which is within the NYC group. It's a small cap platform, of course, within the nyc group. You've got the big board, and then you've got NYC America. Been there about 20 years. Ten years before that, believe it or not, I was at the American Stock Exchange at 86 Trinity Place. I've always been involved with, however you want to call it, small caps, micro caps, nano caps. emerging growth companies, smaller reporting companies, basically companies that want to list and you're under a couple of hundred million market cap, we should talk, as we say in New York. So that's what we do. We educate, we entertain, we put our best foot forward, and if you're looking to list, I'm always happy to jump on a Zoom or what have you or have you in our fancy restaurant. He's quite the host if you want to go visit. You're quite the host. Quite the host, right. So we've got a really nice restaurant. We usually get our listings, you know, they say all business done through their stomach or something like that is a phrase. So that's what we rely on that. And so that's why the restaurant is open. So nice to be here. Thanks, Andrea. Very excited to do this. And these gentlemen, by the way, Jeff Karcher, I can't wait till you introduce yourself. They actually worked together for about a decade at the New York Stock Exchange. I don't know if that was going to come up, But, yeah, they're old work buddies. So, Jeff, over to you. Jeff Karcher. I'm a global managing director at the Texas Stock Exchange. We're a startup, so we don't have money to do big, fancy dinners like him. But we do engage with companies across the board about what our platform is going to be and how we differentiate ourselves from the duopoly that's in place today. Prior to the exchange, I was with the New York Stock Exchange, as she mentioned, brought a decade and part of that was on the south side in equity capital markets in sales and research for more years than I care to remember well thank you so much then to my left we've got Richard Krieger of Moody Capital Richard say hello hello everyone I'm Richard Krieg er I think this might be close to 20 years I've been coming to Neva I would say what I do is I've solve problems i'm a solution oriented person i usually like to say that people work with me don't come to me with your problems come with me with solutions and i think we have basically to solve a lot of the problems we're finding in the capital markets we've developed we've decided to develop our own ecosystem so we have a marketing firm called seed scale global we've got a broker dealer called moody capital solutions and we've got a crowdfunding portal called mr crowd all of these designed to help private companies publicly traded companies grow expand and really take care of a lot of the shortfalls that a lot them have as they seek to list thank you so much and finally carlo corzine hello how are you uh just been in a brokerage business i guess 35 years or something like that doing very well it's a long time you never could get out of it i guess but uh i've enjoyed it i've been with uh part of this conference probably 20 plus years too i don't know how many years i've lost track of it so uh once again can't get out this either you know stuck in it forever but enjoy it now Dawson Jane's up in there 12 years on principle and had a syndicate and we do everything pipes direct offerings follow-ons IPO is private placements and whatnot so thank you very much for Joe Lukosky coming on stage but please QR code participate ask questions this is supposed to be engaging and when are you ever gonna have another opportunity to be with a group like this if you're a company that's raising capital going public and curious what direction to go in. So to the stage. Am I the only drummer here? Come on Joe. Thank you, Andrea. So I didn't expect that. All I know is I walked out to go to the bathroom and came back and the panel had started without me so not used to this but uh we'll roll with it so thank you Andrea and thank you Jim and Neba for allowing us to be here Emily everybody welcome to our hmm all right let's get these clickers right going the wrong way hold on welcome to our panel. All right. We don't have the right slide, but we will, let's see here. This thing has a mind of its own. Make sure you grab a pair of Lekoski socks on your way out. There we go. All Right. We're just going to roll with it. It's okay. Don't worry. Technology is what it is. So I want to start with the story because I think it will, I'm not even touch anything I think it will it will define a little bit about what we're gonna talk about today so there it is inside the new micro cap market that's what we gonna be talking about today. So a few months ago I was sitting at the core club in New York with a client who was taking his company public and we sat down for launch and within the first few minutes he looked at me and said Joe if I try to list my company last year on Nasdaq would we be public by now and this is you know in the spring and I said looked at him and said yeah of course probably I think you would and then within five seconds he looked back at me said well with all these new rules and and the regulations and discretionary rules that had gone into effect. What about now? And I thought about that question for a second cause it's a very compelling question. And I looked at him and I said, yes, but I'm not sure. And that short little interaction probably describes the new micro cap market better than anything we are gonna tell you from the stage today. because right now, deals are taking longer, transactions are less predictable, the standards have never been higher. But companies still need to get public, and companies still needs to raise capital. And the microcap market, as we're gonna talk about today, didn't disappear like so many people have suggested. It has just gotten that much more difficult and has changed in ways that I think a lot of people in this industry don't fully yet appreciate. So that's what we're gonna talk about here in a nutshell. Before we go any further, I do want everyone to take a look at our QR code. If you haven't done it, please snap a picture of this. We have some great interactive questions. We have five things in the market that we're going to show you through data, get your opinion, see how well you know this market, and then reveal what the real answer is. So we don't need to waste more time there, but please do, if you can, take a quick vote. I see everyone introduced themselves, which is great. We don't have to waste time on that, but for those of you who don't know me, my name is Joseph Lukosky, and I'm the managing partner of Lukoski-Brookman. We run a 120-plus law firm out of New York, New Jersey, and we are hyper-focused in the micro-cap and emerging growth space, and I spend most of my days in the trenches talking to guys like Paul and others the other exchanges and really dealing with CEOs founders entrepreneurs who are trying to get listed and most importantly now stay listed so we're going to talk a lot about data today I'll say a few words we run a data desk at Lekoski Brookman that's why you have this interactive data QR codes we track every up list direct list cross list and micro cap IPO in the emerging growth space we take that data we curate it we analyze it we give it away for free at events like this we want all of you to have it so hopefully the ecosystem can make better decisions and I hope you do appreciate some of that data and you get some value from it today so we are going to quickly talk about a couple topics we're going to talk about the last seven years of the industry we'll talk a little bit about the current state of the IPO market we're gonna use the two words that really have affected the industry discretionary review we're gonna talk a little bit that especially with Paul we have a new segment called the revolving door it's gonna be very exciting in and out for emerging growth companies how they come in how they exit we'll have our reality check which is our reveal of the QR code and your voting and then we're going to a little bit about alternative pathways but let's start quickly before we get to the panel over the last seven years of where this market has been because i believe that in order to know where we are today and where we're going most importantly we have to understand where this market has come and put it in perspective so as everyone knows 2020 was the year of covid And COVID, you know, the first half of that year was very fearful. The last half ofthat year really started to take off, which brought us into 2021, which was the year of the hockey stick. I mean, if you couldn't get a deal done in 2021, right, like were you even in the industry? And that really took us into 2022, which Was really chugging along until the first pause of Nasdaq in August 2022, where they shut down the market for about 60 days 2023 was less is more deal volumes were down capital raises were down everything was down took us into 2024 which was really focused on regulatory changes 2025 was a new landscape and the emergence of the foreign private issuer and then of course 2026 discretion and elevation that's sort of the history of the last the last few years so I would love to just ask the panel quickly and maybe Paul will start with you and we don't want to go over sort of last six or seven years but maybe just keeping in mind what we just reviewed and we've talked about this a lot in the past what are you doing differently today based on the last six or seven years of this market that has changed forced you to change and what are you doing differently based on what has occurred over the last few years well since some way is not that much different we haven't changed all that much at least for NYSE American you know like so listing standards for the most part the same we raised our minimum stock price from two or three to four dollars recently you know go through some boring things like this you know we redefine what 15 million market value of public float meant you should just be not shares not held by insiders Tamara can correct me because she's got to deal with these so we just say them she lives with them for her clients so that you know that now it used to just be not held by insiders but now it's also has to be you know not locked up in any way I think one area we increase the shareholders equity minimum from four to five so really it depends on I mean so and and then of course a pack companies more and more started to come to look for four listings and we had to respond to that and I don't want to go too far afield because maybe you can talk about about later but don't like you don't do like you did in the spring jump four slides yeah I just write exactly I ruin the rest of the presentation spoiler alert but anyway so really it was incremental it was around the margins we at the exchange have always had more of a qualitative aspect to our reviews than the other guys the other ones were like you know you meet we must list that's crazy you know we were like you know you meet and okay let's let's learn about this company more so it's suitable for listing public markets all that good stuff so that's really what it's been I don't think I'm from our side all that much has changed maybe it may be Tom or Joe you've seen a little yeah I love you get Tamara's view of a different view on that you that aren't familiar so we got Jeff here from the Texas and we're gonna get to him in a second obviously Paul needs no introduction I know we went through these and and Tamara you know spent many, many years at NASDAQ. You know, she's playing a dual role tonight because we don't have somebody here from NASDAq. She is sort of our NASDAQL representative in a lot of ways, even though she's on the other side right now. Tremendously knowledgeable. But maybe, Tamara, for you, because you're in the trenches like me, you were on the regulatory side when this market started. Now you're on the private side as of today. Maybe give us your perspective. What are you doing just overall differently based on where this market has come and where it is today? If I'm looking at NASDAQ today from, let's say, a difference from two years ago, you need to come to NASDAq with a listing application that has everything ready for them to review. If there is one thing that is missing and is not compliant with their rules, they're not listing you. And that is a big, big procedural change. We prepare clients for that. You need to have a qualitative review done, quantitative review, corporate governance. You need be ready for that. The staff is not wasting their time on a listing application that is not ready for listing. And that is totally different from two years ago, three years ago when they were okay with everything that came along. And big procedural change is discretionary review. I think you touched upon that. And changes to the bid price compliance. so those are more stringent requirements yeah i agree with that from my perspective you have to understand the old system the old playbook 2025 and prior was about process like paul said although i'll say it a little bit differently you meet the standards you generally get listed i didn't think that was so crazy but it it happened right especially with nasdaq now the market has changed to an advocacy-based system where it doesn't matter if you qualify. It doesn't mater if you meet the standards. The question no longer is, do you comply or qualify? The question is, Do you belong? And I know, Paul, you've been asking this question for a very long time, and we're going to get into that in a moment. But the question really is, not do you qualify, do belong? Let's go here really quickly because I think you need to see this is a numerical representation of the last six years of the emerging growth micro-cap market. This is the most popular slide in the industry. This thing has been repurposed, resold, copied, ripped off. People even put their name on it, and it's all over the internet. You can find it. But it is a one-page graphic of the entire industry. I'll just point you to a couple areas that I think are important. So if you look on the top left, you'll see the upward trend of IPOs over the last five years. That's what we are really talking about. You'll also see the outward trend of foreign private issuers, which have really dominated the U.S. capital markets over the last couple of years. And then you'll se on the lower half the downward trend of the median offering size over the boom years, 21 through 25, and then, of course, the average offering price. But this is not really where I want to spend our time. Where I want us to spend out time is where we are right now. Look at this slide, 2025 overlaid on 2026, because think about this. We're almost 10 months in, the same 10 months, but two completely different markets. I mean, it's astonishing. 134 microcap IPOs according to our data desk in 2025 this year through September we have 17 17 you can do the math and the percentage foreign private issuers went from 101 to just seven that's something Paul referenced and we're going to get into but here I think is the most interesting data point the median offering size went from almost 8 million to 19.4 million through three quarters and by the way for the first two quarters it was over 20 million it has come down a little bit as the exchanges have i think softened a bit in their minimum proceeds requirement um although paul will tell you he never softens but uh but the data is what it is so we are we are getting we are get better so here's really the question and again i want to start with maybe you paul then go to jeff and then we'll get to the banking side We've all heard that Washington wants more IPOs. The Commissioner has said this, make IPOs great again, the President has said it, even members of Congress have said it. But at the same time, the exchanges are making it much harder, much tighter to get listed on the New York or the NASDAQ. So my question really is, to start with you Paul, you know, who's in charge of this process? there seems to be a huge disconnect between what Washington is saying, who's, by the way, your main regulator, and what you and the NASDAQ are actually doing. Okay. Yep. Disconnect. Not everything, or most things, actually, in this world can not be reconciled. I'll just shut up. Hello, hello. Okay. Things can't always be recognized, right? I just want to know both of them. How about let's try that? Hello, hello. Okay. So, yeah, of course we know what you're saying. I think when, you know, you hear people in Washington talk about things, you know these are people in Washington. They talk about all kinds of things all the time. And how that translates to, you know, the hardworking Americans is another, how that translates not always so direct right we know that there there's this talk and then there's action and then this reality on the ground we though we're know we're like to say we're at the point of sale it's an old term we use at the exchange so when we get companies in we do we do our work so our due diligence so there's also another community that would agree with that make IPOs great again, but they're also concerned, and they're a little closer to the exchange on a day-to-day basis in a way, like trading firms, for example, and the likelihood that a micro-cap is subject to, or small-cap, is subject to manipulation, or whatever that is. So there's really a balance, because you let the company in, that's at the minimum, right? And I don't say let them in, they meet the standards, and they are approved, and are a listed company, and all that good stuff. And if it's a small deal and it's small company, and they don't have that much sponsorship or sell side or institutional investors, and it is a small and all that stuff, it's an unknown entity largely in this massive capital market that are magnitudes greater, the trading can be challenging. And then everybody is on the same page, right? Except those that are in charge of making money on the trading. So you have this, make your IPOs go to N, definitely, but which are those companies? What are those minimum standards? Do we want just four mega cap IPOs this year? No, of course not. We know who those are. We want small caps, certainly at the NYC American, but there is that balance between, for lack of a better way, what is too small in these capital markets where these companies can be buffeted by the buying and the selling and then before by the time they turn around right there their valuation is down right and the ability to go raise that second round of capital right there the follow-on offerings all of a sudden come in much more expensive right because the $5 stock is now a $1 stock so it's a tough thing to do to balance many things are that way if you're trying to you know make make this this capital market for small cap companies better. We treat each company as an individual. We know what our job is. I don't want to overstate investor protection, but as an SRO and as a commercial enterprise, we want to try to do both. It's an imperfect science. We don't know how companies, we don't have a good idea of how we want them all to succeed, but these are small cap companies, and small cap companies certainly have a lot to do fundamentally to make their way and build the intrinsic value of their shares and they also have a lot to do to be able to manage as a as a really small company in these massive markets so get to Jeff because Jeff is actually building a new exchange as everyone knows but I want to just follow up on that Paul because I got it I can't let that go we got to have a quick conversation here so but there are minimum standards there's standards for a reason and and I think you'll agree that you know I don't know which companies are going to succeed or which companies are gonna fail and and you know capitalism and the exchange is all about the American dream and entrepreneurship and carrying out your life's work so so what I'm trying to tease out and we're gonna get the discretion the second is how is it fair or how can you be confident that you are really picking the right winners and losers when a company meets the minimum standards you and your team and by the way Nasdaq to they are just not here although the here through tomorrow are really deciding who are the companies of you think are gonna make it and those that aren't gonna make it is that really a system that entrepreneurs and founders and the capital markets can rely on really fast because I know we want to hear from Jeff okay sorry so right we have the financials we have microphones with the financial's with the governance the compliance all that good stuff great banker great law firms all these good things audits meet the numbers we also look we try to look a little not even say deeper I mean who wouldn't right we're not picking windows we're not investors but how long has the company been in operation what is the valuation where are they incorporated where their employees how many employees do they have right what is what is business who's on the board there are these little things whereby I think any reasonable analyst leaves that a generic term even those that exchanges can come to some understanding and then we'll talk about these companies and say you know what this is you know what's the market value of public float to the market cap I would like to see at least 10% so and that's not a rule right it's not it's not published rule but there are times and we'll get to a company and it's you know this is sort of a generic conclusion for rent no specific I was like it's early right and then we try to convey that early on that's another part of what we try it to do not to string a company along too long with fall give them false hope that's that's not a great thing that's perfect so it's really good at saying no right I do agree with that he does not try to do that and let's stay in touch and in some cases it's hard to get those deals done anyway not to say anything too much but like you know we'll approve company we approve lots of companies we clear and authorize lots of companies and a you know not all of them make it to the listing day they then have to go raise that money which is not easy to do so you know it kind of goes both ways a little bit yeah I would just argue that the flip side when the company does come with a credible investment banker and they come with the twenty million dollar book there have been times where not just Nasdaq but you have said no so again that's my point when an independent banker and we're gonna get to you next is able to raise money from institutional investors many of them by the way hundreds of them at a valuation that they believe is correct you know does that discretionary piece go too far when you and not just you but Nasdaq says hey you're not ready that's the part that I think the industry needs to reconcile so companies aren't wasting their time wasting their money and wasting their resources and that's really more of a NasdaQ problem than New York Stock Exchange. The last thing, five seconds. Those that we have approved and we love them and we root for them, you've seen a lot of really bad aftermarket performance in a lot of the micro caps. So that is not something we're not aware of. And nobody wants to see that. So there's, you know, that certainly would have to weigh in in a sense in the overall assessment. You know, so that is something And, you know, Joe's got data room. Who would know better than you? You could probably pull up some really incredible data on that. We definitely have data on the post-listing performance, which, you're right, hasn't been done. But that doesn't answer the question of does a company get approved, can they list on the exchange? That is the market taking care of itself. But let's go to Jeff for a second because, Jeff, I think everybody wants to hear from you. You are creating this wonderful new exchange. We had an earlier conversation before the panel, which I didn't even know. you know there is some hope for the emerging growth space at some of the levels we talked about I know you're still working through some of those kinks but tell us just from your perspective what the Texas is looking to do and how we could maybe eventually fit into this emerging growth world sure well well our our focus isn't necessarily on the micro caps what I think our focus is applies to every company that wants to go public or is public chair Atkins says he wants to make IPOs great again. I've challenged myself. I want to make companies great again, but there's no vowel in there to make it sound very good. But what we look at is the way I kind of describe it, we're more about philosophy and plumbing than we are finance. We are looking at ways to address the issues that strike all companies from mega caps down to the smallest of caps. And that is overburdensome disclosure that's out there in the marketplace. Chair Atkins himself said disclosure needs to be reduced to materiality only too much disclosure actually confuses investors so we're working with on that and we can do that at both the exchange level with specific rule changes that we would have also at the legislative level uh in austin and texas where we can write laws in the state that apply to listings that occur within the state so that tie together is very purposeful and also can have a significant impact on a company and then secondly with matters of corporate governance um kind of a wasn't necessarily a little known secret but it was a fact that for over 80 years the sec has always controlled uh proxy threshold levels at the federal level when the reality is is most of the corporate governance rules at the sec actually are relegated to the state so a second bold point and that is in matters of corporate governance and these were his words the sec needs to stay in its lane and that should be executed at the state level. So we've taken it upon ourselves within the state of Texas to make sure that we're looking at what makes the most sense. It doesn't mean scrapping all rules and let everything kind of going wild. It puts some more common sense, more modernized principles in place. And then his third tenet is to reduce the way that litigation has been weaponized in the marketplace. Public companies simply are just a bigger target than private companies. And that has been a very, very strong deterrent to companies going public, you combine all of those things, plus the cost of associating with all of those things. And that's the reason why you see 45% fewer companies today in total than you did in 1997. And we got to break that. We got to change that. So for us, the way we look to start, yes, it's a little bit about finance, but it's really more about trying to take away some of the structure that's just been so in place for so long everybody just takes it for granted and thinks it can't be changed and the corporate governance is the one thing that was I would say a little bit of our aha moment a couple years ago when we first formed and we had a whiteboard behind us as to what what can we do how can we change things is that is is that corporate governance level because that is where you see a lot of the the excess and the burdensome costs in a company of being public and for smaller companies that's an elevated burden relative to a larger company because you're still subject to many of those same rules and that's a problem so the more that we can do to strip away that are actually not strip away but strip down that that benefits all companies of all sizes and it's a an evolving process it's fluid we wrote five laws in 2025 in the state of Texas three of which apply to issuers specifically. We're in the process now of developing nine further laws, seven of which are specific for issuars that make being public easier and less costly and less burdensome. Thank you, Jeff. Let's get practical for a second. Rich and Carlo, you've seen the data. The median offering size has gone from $8 million to almost $20 million, dollars, 134 microcap IPOs to 17. Is it credible to say that an IPO for an emerging growth company can truly get done without extraordinary luck and effort in today's environment? Because that capital raise is really the catalyst and so important to the entire process. What are you guys seeing from the trenches and what is your view of the world? Is this a viable market? Yeah, no, I'm sitting here kind of getting angry. No, I mean, you know, the market's got crushed. And NASDAQ, I think, and we don't have anybody from NASDAq here, but, you know, I Think they fucked up. You know, they let crap come in for so long. They let things go so bad. And then they do a total reversal and got really strict, raised all their limitations, and basically shut down the market, as you see. There's no IPOs. I'm head of syndicate. I've participated in five deals in five months. And the reason why they're bigger is because only big companies can do it. Microcap companies cannot make it. That is so hard now. I've tried to participate in a couple deals where we had 15 different broker-dealers in this space, and they all participated, but unless you have a really big anchor right in $5 million to $10 million of that deal, you're not getting it done. And simple fact, because of that, there's a lot of people who don't want to even work on the deals because the possibility of getting those hitting, it's not $15 million. Now, it used to be $5 and $10, not $14, but now it's $17.5 if you've got your over-allotment. So, you know, that's a big number. And it's funny you say anchor investors because we've been debating this for years. You know, I think some of you may already know this. You know. Anchor investors are, I will say, disfavored a bit by NASDAQ. I know that's an unpopular statement. Don't send me hate mail if NASDAQ's listening. It's the truth. I'm sorry. But I know, Paul, you've had a different view on this on Anchor Investors. You take more of a holistic view of that IPO book and kind of see how it all stacks up versus a hard limitation on Anchор Investors? I don't know if you have any sort of thoughts on that. But that is a big deal, and that is big problem right now without a big anchor, and that is really not something that NASDAq allows. So, Joe, what I was going to say is, look, 22 years ago, I became an investment banker. And I remember going to a panel similar to this, and one of the top heads of SEC was there. And I Remember sitting in the room and being a young banker and being a little bit arrogant and not really knowing the rules about what you're allowed to say in the Room and what you are not allowed to when the head of the SEC is in there. But I basically in the back of the room said the rules are stacked against the small issuer. They've always been, they continue to be, and it's like, you know, you say you talk about an incremental change from $2 to $3 to $4, that's a 100% increase. It's not incremental. 2 to 202 might be incremental. Two to four is a doubling, right? That's a big increase. And if you look at what's happening, I think you said a 10% decline in IPOs, it's a 90% decline in IPOs. This isn't just a whimsical thing we're talking about. We're talking about careers. We'RE talking about innovation leaving our country. We'Re talking about these rules are designed to help our foreign competitors compete with us. Right now, we're exploring should we start taking IPOs into other countries because the U.S. markets are not the innovative markets they used to be. It's a sad state of affairs. I mean, we're interviewing MBAs out of schools. Hundreds come to us to interview. There's no positions available. There's not IPOs to work on. We didn't do enough prep on keeping a positive. Thank you, though, Rich. Let's go quickly because this is a really big topic that we need to cover. And this is really the discretionary view. Folks, this is probably the most important slide you're going to see today. This is the entire emerging growth clearance system. We're going to run through this real quick because we are running out of time. But I want everyone to understand that prior to 2025, really, really 2023, you know, you used to qualify for NASDAQ by meeting the quantitative listing standards. We used to talk about the core four, things like shareholders' equity, public flow, number of shareholders. Well, today, that is just the beginning. That is the bottom line. That is their foundation. Back in 2022, NASDAQ introduced what we call the concentration and distribution rules. That's what we called the deal, the second qualification, where NASDAq and the New York Stock Exchange to some degree will look at your IPO book, they'll look at you investors, where they're located, how they stack up, does an anchor have too much, or is there a good distribution? That has been in effect since 2022. And now in 2025, the big one, the discretionary review, which for those of you who are unfamiliar, NASDAQ passed the rule in December, nine factors to look at, 24 plus sub factors that we track on how to get a deal through. Things like who are your advisors, what country are you listed in, what is your governance structure, what is your ownership structure, all of those things. That is how you get a deal done now with at least the NASDAQ. There's three qualifications, no longer number one. And the most important part of that, as I said in our opening, it's no longer do you qualify, do you meet the standards. The question now has become do belong. But here's the real question, Paul. You have always had a discretionary mentality. You didn't need a rule to use discretion. You just told us before. It was crazy to meet the listing requirements and then list. So again, I don't want to reopen that can of worms, but you've been doing this for years. How do you, again, apply that discretion in the way that gives these companies comfortable so everyone gets them comfortable, so everyone sitting out here can say okay we're gonna make an application we qualify how do we what's your best advice to get us through that discretionary review well yeah so I kind of mentioned some of the things we look at earlier you besides those quantitative metrics right headquarters domicile history number employees location of executives you know is there any activity in the United States right things like that things that we you know is it early is it is it really a conceptual company where you know if you look at the expenses it's just you know administrative and financial expenses if it's like a biotech I'm making it like a simple example where's the R&D well you know we're just setting up the company maybe that company's not operational you need to be two years operational so then like right so even the standards that we have printed already they have this Right? There's a subjective element where, you know, I'll be on the phone. You're not operational. Yes, we are. No, you're not. I mean, we don't literally do that. But, you need to be operational. So you can have that back and forth. And then if it gets to that point where that's like one of the deciding factors, and with all those other ones that I talked about, we'll really dig into it and we'll end up making a call, a decision, I should say. So, it's kind of always been there, but we try to look at those things early on, as opposed to go through a full review. And, of course, they're going to have the numbers, right, because everybody knows the numbers. You're not going to say, we want a list and then never get to those metrics we talked about, shareholders' equity, market upload, et cetera. And so, we'll try as early as possible, understanding there's a pipeline of companies that we all have to look At, but to get back to you and say, you know what, we love you. let's stay in touch you know call me when you do next year right when the audit comes in in March of 27 let's let's touch base sometimes it's for the better you're more mature company hopefully and so it's not you it's me that's the headline from no no it's you we're just being nice it's here it's always do you ever heard that quickly let's just jump Jeff what is it what role is discretion gonna play in your listing standards I know you're still working them out and we're not quite into the emerging growth world yet although we have heard that 200 million is the minimum for at least transfers to the exchange not new listings but are you grappling with discretion the same way as nasdaq and new york stock exchanges um i would say that's probably that's part of entirely part of the kind of the compilation of everything we're we're assuming nothing needs to stay in place for sure from the way it was we are looking at it in every aspect that where we can improve or modernize markets you know some existing rule standards are dated 15 years ago on say compensation for board members why well why does that have to be the case we really just kind of ask why so I think discretion goes into every aspect about what we will consider for those standards they're on our website if you you want to take a look at them, but I will tell you they will be modified between now and the time when IPOs will begin for us, which will be either middle part of 27 or the back half of 27. It's still being in the formulation stage, and it's being formulated, and discretion is part of that in having discussions with lots of councils, lots of outside law firms. I never thought I was going to end up talking to as many lawyers as I do nowadays, but it's all just a pioneer to the market as to what are the problems and what are the issues, and the discretionary review is certainly one of the things that is on that docket. We just haven't gotten to the point where it's been kind of officially put in place with our rules, but one of things I will say is we'll be a very user-friendly exchange, not that the ones today are not, but admittedly, we have the benefit. We don't have 2,000 companies to have to monitor, so our regulatory team can be very responsive and can get an answer back within 24 hours to outside counsel or to companies. But that's the way we kind of want to operate is just trying to, again, make companies better in whatever way, shape, or form that can be. That's how we're looking to address the problems of today. Maybe, Tamara, just quickly, I know you were not at NASDAQ. You were at NASBAQ when there were no discretionary rules. Now you're on the other side. There are discretionary roles. Just 20 seconds because we've got to move on. What is your feeling being on both sides? You still have good friends at the exchange. I know your talk to them off the record. You probably text with them. Give us some tea here about, you know, what you're seeing and feeling, and just quick, 30 seconds. Our clients, all of us, actually are not happy with their process because discretionary review comes in as a last part of the process. The companies have spent a lot of money, time, to get to that point, and the allocation review, discretionary view, are the last decision time. and they go in thinking that they can price the offering tomorrow, but they get a call from NASDAQ telling them there is no place to move forward with the listing. That's the issue. And that is an excellent point because, remember, when we're looking at this marketplace, you have to understand the New York Stock Exchange, and to Paul's credit, has always been a front-end process. And what I mean by that is if they see something they don't like, if they aren't quite ready to make that commitment yet, They're going to tell you up front before you spend a million dollars and a lot of time and a lot of resources. Whereas NASDAQ, unfortunately, like Tamara just said, waits until the end. They wait literally until the week before pricing. You get a call from the analyst that says, hey, can we set up a call with the chief listings analyst or the big boss? And you know that's the kiss of death because that is your discretionary failure. And that is a problem. And I really hope as an industry we can figure out ways to make that happen sooner but that is the biggest point let's jump right now to the the revolving door of the industry um and i really think this is where the markets have sort of headed or at least it feels like where it's headed because every year you have um a number of companies that come in the front door for nasdaq and new york stock exchange micro cap and you have a number of companies that really go out the back door since 2020 we have identified 12 new hurdles for getting in the process these are things like discretionary review and concentration and distribution we've also identified 11 new ways to get companies out the back door meaning get delisted and if you take a look at this you will see overlaid oh that's not we're supposed to be you will see overlaids the number of companies that be coming in the front door and out the back door so in 2025 there were 134 companies inside the front door there were 209 companies that went out the back door a net deficit then happened again in 2024 and is really going to happen here in 2026 because we have 17 IPOs and we have 59 companies that already been delisted I think we want to move on now just quickly to our reality check and give you some results of the polls I get to be Vanna white so as we have the truth we're going to reveal the truth thank you so much so let's go we're gonna reveal what the room has decided and then what the data tells us first question of the currently 5096 nasdaq and new york stop exchange listed issuers how many are considered micro cap that is 300 million dollar market cap and below so this is how everybody answered do you want to cover this or Okay. So we've got two votes. More than half, 58%. Yeah. 58% of you said that more than half of the companies are micro cap. And the actual answer is 35, 35.7% are micro. So a third of the market cap is actually micro cap, actually, that's interesting, because I would have said, I would have thought that you would have voted a lot less for the micro cap but so a third of the market is micro cap my question is quickly before you move on to the next slide Jeff a third of this market is micro cap and emerging growth will the Texas exchange make a push over time I mean these are hundreds of a thousand of companies in the micro kept I'm not saying you're ignoring them because i know you're building out your procedures now but what are your sort of intentions going to third of the market yeah well right now for us at the beginning those are the companies that would not qualify for us but keeping in mind too there's a difference between initial listing standards and transfer standards two different hurdles so for us our primary start is about transfers because you have to establish the exchange you have to establish a universe of companies, improve the market quality, they can trade, et cetera. So then the initial listing standards would take over kind of down the road, and that's going to be different. So for us, our focus at the beginning is we want to establish ourselves as a high-quality marketplace, so it's not as much about the size, although it is, but it's more about high quality because by having a proven market with higher-quality companies, that can attract companies of all types. So is your view that if it's a bigger market cap, it's a better company? Say that again? So the view of the exchange is if it is a bigger market cap it's better company. Not necessarily. Well then why wouldn't you list microcap companies right away? Our approach is going to be, we've chosen to take kind of the opposite tack. So it's little bit like the apartheid system in South Africa, right? You're basically going to say this set of companies, 36% of the companies, we're just going to ignore them because there's no innovation, there's nothing happening there. biotech companies that could potentially cure cancer let's forget about those let's instead list you know tesla and spacex and let's really help the companies that don't need anyone to help them is that sort of your business model well like i said earlier i mean the part of what we're what we are trying to address is why are some of the companies having such difficulty being public and the cost of being public how that filters down in the marketplace of company size that will remain to be seen all i can tell you is that we've been a leader in changing some of the ways and the rules and protocols that have been in place that have prevented companies from being public how do you see yourself as a leader if you don't allow you know small innovative companies to go public on your exchange now we're getting somewhere all right let's move on to the next question we're running out of time here okay next question how is the microcap ecosystem split between nasdaq and the new york stock exchange so more than half of the room 50 okay 58 of the vote yeah more than half the room said 60 40 60 40 uh in favor of nasdaqu and the real answer is about 80-20. This is 82-17. But I will tell you, in 2025 and 2024, it was more 90-10 in favor of NASDAQ. So the question, Paul, is this. Is the NYSE really that much more special and that much more selective here? Why are you guys not capturing more market share? Or do you just need to upgrade your sales team which by the way we can help you with if uh we definitely need better salesmen i'm one of them so you can imagine yeah you're like wow that's pretty bad if you're one of uh no uh look the nyse is like this whatever i work there i drink the was it tea coffee what do you drink the kool-aid thank you i couldn't remember the beverage i drink the arnold palmer with the best of themso right so the nyc has always been about the blue chip companies, right? That's like a brand that we've earned and we live with and it's good sometimes, it's not so good sometimes, but that is kind of the sense of it. And the NYSE American is a small part of the larger NYSE group, right, the big board in American. So are we really special? I don't know. We're as special as our clients think we are. I think it's a pretty cool place. Companies from around the world want to get listed on the New York Stock Exchange unless sometimes you're the tech people and that's your pedigree SpaceX did it so therefore we must too which is kind of crazy but we think we're pretty cool we definitely need more sales people much better than me but we never were like NASDAQ in that way in terms of those emerging growth companies even NYSE American when we were stand alone maybe 15 years ago when we weren't part of the NYSE group we did a little more of that dipping into this micro cap space than we do now that we're part of the NYC group and I think for the most part all in it's better but you know but not everything is always 100% perfect so this goes back to discretion we're going to have to continue this conversation another time let's do one more I want to go a couple questions we're not going to get through the rest but here's here's a real popular one if you had a choice where would you list today and we actually will just reveal that 33 of the voters nasdaq 50 of the vote New York stock exchange that's the room's top answer and the TSXA, 17% of voters. Jeff, 17%. 17%. I am real excited to hear more about the Texas Exchange. 17%? So just a little bit for context. Compared against where microcaps actually list. The market today, 83% of listed microcaips are on NASDAQ, about 1507. 70% on New York Stock Exchange 1717 and the New York stock exchange American 314 so keep in mind Texas Stock Exchange is new corporate listings launched q4 of 2026 and how exciting for us that it was yesterday in fact and we first two companies right Jeff six okay let's do one let's see this last one cuz this one is a little bit of a trick one this is really one that we put together on you know is it sort of peer group lower fees dedicated market maker branding low cost or a streamlined certain process and that is the Nasdaq motto by the way peer group lower fees growth oriented companies okay when we look at dedicated market maker brand flexible standards I don't know that sounds familiar to any that's the NYSE Paul shaking his head he knows his slogan Jeff we took that right off the website that's your slogan lower cost issuer-friendly less burdensome certain predictable listing process that is the room's top 51% so guys what are you gonna say 51% want certainty streamlined predictable process what well I'll just that when we send out a listing application that's three quarters filled out take somebody about two hours to complete it that streamlined predictable okay there you have it directly from Jeff all right we're not gonna get to the next couple slides I do want to say one thing this is the first year in the emerging growth space where the alternative pathways have outpaced the traditional IPO we don't have a slide on this but I want to just give you to some quick data to leave with that is through September this year, three quarters, there are 53 microcap emerging growth listings. Out of those, 17 were IPOs and 17 uplisting, cross-listings, and then I think 18 direct listings, if that math serves correct. So if you combine the direct listings with the cross-listings and uplistings it is the first time in since we've been tracking data in seven years that the alternatives have outpaced the traditional IPO because of these new rules because of discretion because of the fall off of the foreign private issuer and one last question to the panel that I want to take one or two questions and we got to wrap it up and that is that maybe Paul will sort of go back to you here You know, direct listings have been a real important part of the emerging growth ecosystem this year. There's about 18 of them throughout the year. We know this because we're in the trenches and we speak to you often. The New York Stock Exchange is not a fan of emerging growth direct listings. That's sort of a bigger company concept. And the question is why. And is there any hope that the NYSE would look at a direct listing in the emerging wealth? And if so, how big did it got to be? Right. Right, so the direct listings, capital D, capital L, direct listings. Meaning, not meaning, OTC up listings where you don't raise money. Sometimes we use that interchangeably. Right, private company, not an IPO. It's like reverse merger. What do you mean, right? There's like 18 different definitions of that. And so we don't do capital D capital L direct listings on OAC American. As exactly as you said, Joe, it's our view. But the rule is, on the big board, we'll do direct listings meaning raise money, you know, I'm sorry, list without a raise, right? And that came from the market. There were these, right, these, you know there was that pop, right. It's all started from a few years ago with been going on for a long time, right price something at 28, it opens at 74, right the company's like, wow we left a lot of money on the table. It's on, it was on CNBC at one after another that was sort of gave rise to that whole direct listing idea. You know, you don't raise money cause you don'T need money. Everybody knows who you are. You're a bold face named company, right tons of backing. You've been around, you DON'T need to raise money. You don't leave any money on the table, and then maybe you'll raise money after, post-trading. And there was even a tweak to that one, where you would raise money at the first trade. Anyway, so that's the big board. NYC American, we don't do it. We believe that, and we look at the companies that are raising money, and they still need to get more visible. and, you know, whatever the word sponsorship means, and more sustained, you know, stable trading. So to go on with no raise, especially if you're a foreign private issuer, and you go, okay, you might have a valuation where your stock should be $14 a share, and $350 million market cap, but without that liquidity, right, and without that banking relationship, it just didn't make sense for us at the time to embrace that idea, so we don't Don't do it with NYSE American direct listings. That said, if you're OTC and you uplist and you've got lots of money, clean audit opinion, boom, boom, holders, the whole thing, you can uplist without raising any money. Tom Ramos. All right. There you have it. No direct listings for Asian growth companies on NYSE America. Let's take a couple of quick questions and we got to get to happy hour. Over here. Yeah, honestly, I'm talking about getting this. The real problem is once you're living in England and you're looking at cohorts, there are 70% retail, 100, 150 million in the market cap, and then the investors are more financiers that are out there on the future side. So from the exchange viewpoint, what are you guys looking at to help focus on the actions for? Because that's really where the company comes out to be a big company. that's a great question thank you uh basically the question is you know what are the exchanges doing and what can the market do post listening to support these companies you know we just did a podcast on this so for those of you i know a lot of you know i host a podcast called inside the emerging growth markets. Every two weeks, we speak on a different topic. We just did a whole segment on direct listings and the terrible post-listing performance of some of these direct listings on NASDAQ, of course, not the New York Stock Exchange. But it's a very important question. We talk about it all the time. The industry needs to be talking about it more. Maybe, Paul, since you have hundreds of companies in the NYSE American, maybe just tell us quickly, what are exchange is doing to help these companies with post listing trading and liquidity um you know out of the gate i want to just keep talking it's tired of hearing me talk uh let me know if anything resonates with you i don't know if i'm actually making any real points because i'm just talking for the sake of talking but yeah great question well it's really it's up to the company I mean, we have investor relations tools, right? We've got some social media amplification. If you're fortunate enough, we can get you a bell. So what is that? So there's a visibility. What are we doing? Well, we've got a market model, which includes what we used to call specialists. I can see anyone with gray hair or no hair knows what that means. Now they're designated market makers. So that helps, we think, right, these are active participants in the day-to-day trading. NASDAQ doesn't have this feature in their model so that's something we have but it's really it's up to the company and their other professionals to to really take you know carry that weight for the most part we try you know as an independent you know platform it's not there's not that much we're going to do to support a given that answer polls right there is not that much the exchange can do of course you have the name and they give you the tools and there is a great you know team sort of behind the scenes but they're not going out there and building awareness they're not going to get eyeballs on the stock they're going to go talk to analysts or institutions that is on the company to do so and in fact I talked about this in our podcast on this exact issue and how early you need to start planning this whether this is 60 days out 90 days out you need be prepared with a IR person a PR person And really spend that money. Nothing is free. Nothing is cheap. It takes hard work, effort, and resources, especially now when, like Paul said, a lot of these companies are coming out. There is a wave against the emerging growth deals. Stocks are trading down. Now, the good news is we're not as volatile as we were in 2025, like we were with a lot OF these Asian companies. But the post-listing performance has not been great. It really is a full contact sport for companies. and need to start planning and spending money earlier. That is the unfortunate true answer. Right here. In your chart, the IPO change from 2025 to 2026, does it include micro-cap companies, nothing through SPACs? Yeah, no, these are true operating companies. SPACS are a whole other animal. They're evaluated differently by the exchanges. They qualify differently bythe exchanges. They have a different investor base. That is true operating companies. 134 in 2025, 17 through the third quarter. Right here. Yeah. Excellent question. I mean, we talked about alternative pathways all the time. Direct listings, uplistings, cross-listings and reverse mergers really is the complement to that alternative pathway. And if you add reverse merges, they are way outpacing the traditional IPO. But that's a great point. And again, hate to keep going back to Paul, but you are the resident exchange expert here. And Jeff, you don't have to worry about reverse merders yet. You got some time to think about it. but but but it is it is true reverse mergers are difficult and I know all the rules about whether you would have qualified when you started and you know do we like your business and the discretion forget that really I think the question is you know how do you evaluate these things from a trading perspective and again just so everyone level sets you need to meet the initial listing requirements when you do a change of control reverse merger as if you were going public through an IPO. But the question for me and from the trenches really is how do you line up that approval and the trading and then magically say, okay, you're approved. In an IPO, you know, you have a pricing date, you start trading. It's all very sort of simple and predictable. For reverse merger, at least with NASDAQ, you can be waiting and waiting and then you do your reverse stock split. You get the $4. You're waiting, waiting, and then the stock goes down below $4, it's like flip a coin magic trick, how do you qualify? How does the New York, and that is a real problem in this industry. How does The New York Stock Exchange handle, assuming you get through all the other discretion, all the other requirements, how Do you handle that moment when there is a trading date? Do you have to trade for one day, five days, 10 days? Do we have to, you know, show up at your house and camp out on the tent on your lawn to get approval? Like, when does that happen? Because this is a really real problem, real problem. Problem in the industry. So when you say reverse merger, and as I mentioned earlier, reverse merger right what's the reverse merger you know you talking about like an OTC shell with an operating company or a listed company combined with an unlisted listed both of those are we call reverse mergers so which one do you mean we're talking about is a listed company on the New York Stock Exchange that has maybe a low market cap okay that combines with an unlisted now you're having an operating companies right that kind different business to take over and provide tremendous new value to the shareholders yeah so again as you say Joe we've got to meet the initial listing standards a survivor company um call it like a section 341 whatever it is that that's the section in our company guide tamra knows that and um there's a early assessment as to whether it in fact is a reverse merger or just a share issuance by the listed company so there's some tests in there you can find assume it is right we wait for the s4 what is that moment the s1 four dollars yeah is it one day trading is it 10 days trading like what is that moment that is the biggest risk if there's a if there is a raise involved in this combination and closing and listing we use that price right if not it is I think it depends on who the survivor is but in some situations where it's the better you know the better answer from the reg team it's a two weeks right it's ten days sustained that that's we call sustained over four dollars. What does sustained means? 10 days, 10 trading days. Does that mean on the 11th day you automatically qualify or does it mean on 11th that you make a phone call and maybe you got to go 10 more days? No, you need, so right. You need, you need 10 days. We need sustained trading. What does that mean? 10 Days. Okay. Before the application, I would say before the application is is approved by the reg team so so you've got to have that historical price right meeting that has meet that historical price and then you typically have to sustain it through the listing so it's 10 it could be 10 days plus or it could just 10 days if you're at you know 10 days or a couple of days more if you close to closing the deal this is the biggest risk factor in the emergent growth space because unsustaining that trading that's where bad things happen that's what games get played that's where all the things that the regulators and the exchanges don't want companies to do but they get forced to do especially when you're talking about investor relations eyeballs on the stock shareholder communications it is a crazy system that collides together we would much better be off I think as an industry figuring out okay you're gonna do a merger the price gets the four dollars and just like an IPO you go out of the gate and start trading this whole game of 10 days 20 days 15 days 27 days is a real problem and it's actually having the opposite effect because it's making the markets more volatile and making the company spend money on things they probably shouldn't be spending money on just to meet these listing standards and get a you know praise the Lord you're approved on some random Tuesday after 17 days that is a real issue that needs to be addressed right there are some there we have four sets of listing standards not sets for separate listing standards one set of four depending on which standard you are listing under that determines whether you need the 10 days sustained 10 days or 90 consecutive trading days no that's right no one's doing that and that's that's just the way it is we wish companies would but they're just not so but yeah so and that and that's the one way we're using market cap test so in other words you can't just meet the market cap and the price they go hand-in-hand $4 and in these standards 75 million market cap so that could be 90 consecutive trading days that said so that sounds impossible like not happening but yes here's what you do you do the reverse split right the one for 20 build in a cushion and then of course all those historical prices are right are adjusted the same way and then you can get immediately to the historical pricing and looking back Nasdaq is not so great at any last question because we do off the run All right, we got to wrap it up. Thank you everybody for being here. Appreciate your time. Hopefully you got some value