Battery materials recycler Neometals (ASX: NMT) has earned a promotion from the United States’ over-the-counter “Pink Sheets” market to now be eligible to trade on the top tier – the OTCQX Market Group’s “Best Market”.
It means US investors can now get behind the West Perth-based company with more confidence as the Best Market qualification is underpinned by strict financial criteria regulation set out by the Securities and Exchange Commission.
An OTCQX qualification separates out the superior companies from the many OTC firms that are financially challenged, those involved in questionable activities, or both. An OTCQX company must meet high financial standards, be current in its disclosure and have sponsorship from a professional third-party advisor.
Penny stocks, shell companies and firms in bankruptcy are not eligible for a listing on the OTCQX. For example, they must adhere to governance transparency and must not be penny stocks or associated with stock promoters or other shady operations.
The trading move bolsters Neometals’ strategy to enable critical material production from waste streams. The company says the increasing importance being placed on US domestic critical material supply resilience bodes well in helping to broaden the audience to its sustainable battery and precious materials business.
The US trading upgrade reflects a desire to provide additional visibility and gain greater market exposure and liquidity. Additionally, the OTCQX quotation will increase the number of US States to 40 that allow investors and equity analysts to recommend Neometals’ American Depositary Receipts
Neometals managing director Chris Reed
The OTC is a decentralised market where securities not listed on major exchanges are traded directly by a network of dealers. The OTCQX roster includes many blue-chip stocks from Europe, Canada, Brazil, and Russia.
The two lower-tier options for OTC trading in the US are the OTCQB (or the Venture Market) and the lowest-level Pink Sheet Market that was made famous in the movie The Wolf of Wall Street. Prior to the classification upgrade, Neometals had traded in the Pink Market.
Application fees for companies trading on the OTCQX are much smaller than those associated with listing on a major stock exchange such as the NYSE and companies can bypass the expenses incurred by meeting the stringent ongoing disclosure and legal requirements that come with maintaining their listings.
The confidence boost in Neometals comes just months after car giant Mercedes Benz threw its weight behind it with an €18.8 million (AU$30.7 million) purchase order for the former’s joint venture (JV) company Primobius to build a hydrometallurgical hub in Germany. That hub is planned as part of a massive lithium-ion battery recycling plant and is Mercedes Benz’s first foray into battery recycling.
Neometals has now made the move from the world of pink sheets to the “best” OTCQX market – a leap of confidence for the company, which is leaning into the exploitation of battery waste to fuel global decarbonisation.
In comparison with current mainstream electric vehicle (EV) supply chains that begin with primary mined raw materials from nickel, cobalt and lithium resources, Neometals says its refining process to recycle the key components of lithium-ion batteries can potentially achieve an 85 per cent lower overall carbon footprint.
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