Nov. 12, 2018
Dear SEC: I would like to address the comments made in the attached article by Brett Redfearn. Specifically this suggestion, "If a company is a dark company and listed in the OTC market and hasn’t put out financials for six months, maybe it shouldn’t be quoted or offered to retail investors,” Redfearn said Monday at the Securities Industry and Financial Markets Association’s annual meeting in Washington." https://www.bloomberg.com/news/articles/2018-10-01/sec-spots-a-way-to-starve-the-most-suspicious-penny-stocks I am an individual retail investor, investing for over 25 years. I have seen a lot of changes over the years, some good and some bad. I am concerned by any SEC regulations that would prevent the issuing of quotes or restrict trading in OTCBB stocks/Pink Sheets stocks that have not put out financials for 6 months. Many of the companies in which I have investments are small companies traded on the OTCBB/PInk sheets markets. These companies are fine, upstanding institutions, often run by the founder(s) or their next-generation family. Some of these companies file SEC reports, some file reports at the OTC markets website (quarterly and annual), some file Call reports (if they are small community banks), some file quarterly and annual reports only on their websites, some send quarterly/annual reports only through the mail to shareholders, and some send only annual reports by mail. I am concerned that one or more of these subcategories would be earmarked for restriction, which would severely cripple the value of the stockholder's investment. If I am unable to readily buy and sell shares to other shareholders via traditional brokers using readily disseminated bid/ask prices and volumes then the share price will fall as investors will not want shares that they can readily buy and sell. If there is no market for a company's shares then shareholders are at the mercy of the company. The company would be the only resort for selling shares and they could offer pennies on the dollar for the shares, if they were so inclined. Many good companies that have been in business for 25+ years, publicly traded all of those years, fit into the category of companies that only send out annual reports directly to shareholders (not posted on their websites). One such company is Kyzen, symbol KYZN, www.kyzen.com. They have publicly traded since 1994 and are headquartered in Nashville, TN. If you call the company, you can speak directly to the CEO/co-founder. They are an international firm with one branch in Europe and 2 branches in Asia. Their stock trades on the Pink Sheets. They only send out an annual report, which is about 20 pages, and contains all of the usual Consolidated Financial Statements and Notes found in basic annual reports. They are audited by a third-party public accounting firm. They trade for under book value and at a P/E of about 12. It would be a major error to prevent current and potential shareholders from being able to buy and sell shares of Kyzen in the same manner that they trade shares of Tesla or Netflix. I ask that the SEC NOT impose any rules that prevent the publishing of quotes or that restrict the free market purchase and sale of OTCBB and Pink Sheets securities of companies that don't file publicly available reports, but rather only send reports to shareholders, sometimes with reports only going out once a year. I mention Kyzen as a representative company, but there are many others I own that I could expound on, if so desired. Please feel free to contact me with any questions or desire for more information. Thank you, [redacted] Please keep my name and address as non-public peaces of information. Thank you.