THE OTC DEBT MARKETS

It is the Mission of the OTC Computer & Software Debt Market to preserve and strengthen the quality and public confidence in Alternative Debt Investments. The OTC Computer & Software Debt Market stands for Integrity and Ethical practices in order to enhance Investor confidence in Alternative Debt Investments, thereby contributing to the financial health of the overall economy and supporting the capital formation process. From early and developmental stage companies to operating companies of international stature, each are recognized as sharing these important traits. 

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The OTC Computer & Software Debt Market provides a transparent and secure platform for the sale of unlisted Debt securities through weekly and monthly Blind Reverse Auctions. 

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These include, but are not limited to:​

• Traditional Corporate Debt Bonds

• Asset Backed Securities

• Commercial Real Estate Asset Backed Securities

• Venture Debt

• Revenue Interest Financing

• Royalty Based Financing

• MRR Lines of Credit

• Structured Financing & Convertible Securities

• Equipment Lease & Equipment Backed Securities

• Working Capital Lines of Credit

• Mortgages & Deeds of Trust

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A Blind Reverse Auction is a price / interest rate discovery process in which the auctioneer starts with the lowest or highest asking price / interest rate and lowers it, or raises it, until it reaches a price level where the bids received will cover the entire offer quantity. Blind Reverse Auctions are appropriate for instances where a large quantity of an item is being offered for sale, as opposed to just a single item. 

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A Blind Reverse Auction can be used for a private offering and an IPO to figure out the optimum price for a stock offering. They are also used by Government Agencies for the public offering of Treasury Bills, Notes and Bonds. 

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The OTC Computer & Software Debt Market's Blind Reverse Auction Process: In the Blind Reverse Auction process for Equities, the Underwriter does not set a price for the Agribusiness Equity Shares being sold by the Issuer (or the FINRA Broker Dealer). The Issuer (and/or the FINRA Broker Dealer) decides on the number of Equity Shares to be sold and the "asking price" per Share. 

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Investors submit "price bids" and the number of shares they would like to purchase. After all shares being offered have been sold (or committed to), the Underwriter / Issuer / FINRA Broker Dealer creates a single list with the highest bid prices at the top and the lowest bid prices at the bottom. In the event that more shares are sold than are offered, the Underwriter / Issuer / FINRA Broker Dealer works down the list of the over sale starting at the highest bid price buyer and working down the list until the desired number of shares have been sold. 

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EXAMPLE:

Assume that the Underwriter schedules a Blind Reverse Auction for an Issuer to price Corporate Bonds for a Company. In this scenario, let’s say the Issuer is auctioning 4,000 Five-Year Maturity Corporate Bonds, with a face value of $1,000 USD per Corporate Bond. NOTE: The below is not a realistic example and involves large differences in bid prices which is not realistic, but is being utilized here to cover multiple scenarios.

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Bidders:

• Investor A: Places a bid for 1,000 Bonds at an annual interest rate of 5.25% per Bond

• Investor B: Places a bid for 1,000 Bonds at an annual interest rate of 5.00% per Bond

• Investor C: Places a bid for 500 Bonds at an annual interest rate of 4.75% per Bond

• Investor D: Places a bid for 500 Bonds at an annual interest rate of 4.50% per Bond

• Investor E: Places a bid for 1,000 Bonds at an annual interest rate of 4.25% per Bond

• Investor F: Places a bid for 500 Bonds at an annual interest rate of 4.00% per Bond

• Investor G: Places a bid for 500 Bonds at an annual interest rate of 3.75% per Bond

• Investor H: Places a bid for 1,000 Bonds at an annual interest rate of 3.50% per Bond

• Investor I: Places a bid for 250 Bonds at an annual interest rate of 3.25% per Bond

• Investor J: Places a bid for 250 Bonds at an annual interest rate of 3.00% per Bond

TOTAL: 6,500 BIDS (1,500 more bids that bonds for sale)

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Investments Automatically Accepted / Investment Bids Rejected:

• Investor J: 250 Bonds sold to the Investors at an Annual Rate of 3.00% per Bond ($250,000)

• Investor I: 250 Bonds sold to the Investors at an Annual Rate of 3.25% per Bond ($250,000)

• Investor H: 1,000 Bonds sold to the Investors at an Annual Rate of 3.50% per Bond ($1,000,000)

• Investor G: 500 Bonds sold to the Investors at an Annual Rate of 3.75% per Bond ($500,000)

• Investor F: 500 Bonds sold to the Investors at an Annual Rate of 4.00% per Bond ($500,000)

• Investor E: 1,000 Bonds sold to the Investors at an Annual Rate of 4.25% per Bond ($1,000,000)

• Investor D: 500 Bonds sold to the Investors at an Annual Rate of 4.50% per Bond ($500,000)

• Investor C: Full Bid of 500 Bonds at an annual rate of interest of 4.75% Automatically Rejected

• Investor B: Full Bid of 1,000 Bonds at an annual rate of interest of 5.00% Automatically Rejected

• Investor A: Full Bid of 1,000 Bonds at an annual rate of interest of 5.25% Automatically Rejected

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The Management of the OTC Computer & Software Debt Market has broad discretionary underwriting authority over any investments associated with OTC Computer & Software Debt Market in order to maintain the quality, the public confidence in Alternative Debt Investments and the OTC Computer & Software Debt Market, as well as to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.

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The OTC Computer & Software Debt Market may use such discretion to deny any application of any company applying for a debt investment, apply additional or more stringent criteria, or suspend (or deny) any company based on any event, condition, or circumstance that exists or occurs that makes the proposed offering inadvisable or unwarranted in the opinion of the Management of the OTC Computer & Software Debt Market.​

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Offering Types / Form Types:

• Regulation D (Institutional & Accredited Investors Only, no CrowdFunding or Token / Coin Offerings)

• Regulation A+ (Tier I & Tier II)

• Regulation S (for Non-U.S. Investors / generally as a parallel offering)

• EB-5 (must be associated with a current EB-5 Visa Regional Processing Center)

• 144A (for established businesses, offering of shares to Qualified Institutional Investors only)

• PIPE Transactions (Private Investments in Public Entities, issuer must be in good standing)

• Family of Notes

• S-1 (must meet the listing criteria of the NYSE, NASDAQ or OTC prior to Offering)

• S-11 (Real Estate Investment Trust)

• S-3; S-6; N-1A; N-2 

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Capital Sources - Domestic & Foreign:

• Family Offices 

• Investment Banks & Qualified Institutional Buyers ("QIBs")

• Pension Funds (as well as third-party Pension Fund Advisory Firms)

• Hedge Funds

• Mutual Funds

• Venture Capital & Private Equity Firms

• Life Insurance Companies

• Public & Private Real Estate Investment Trusts

• Registered Investment Advisors & Registered Investment Advisory Firms

• Broker Dealers & Market Makers

• Endowments & Foundations

• Accredited Investors associated with a FINRA Broker Dealer or Registered Investment Advisor

• Retail Investors (non-accredited) under the advisory of a FINRA / SEC Registered Investment Advisor

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Securities are listed on an Intra-Dealer Network, the OCT Markets (Pink, Grey, OTCQB or OTCQX), the New York Stock Exchange or NASDAQ after completion of Auction. 

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