Kootenay Confirms Paid Promotion and Replies to OTC Markets — Why Small‑cap Investors Should Pay Attention

Short answer: Kootenay admits it hired an external promoter and told OTC Markets the work was paid and arm’s‑length

Kootenay (KTN / KOOYF) has confirmed that it hired a third‑party promoter and has formally responded to questions from OTC Markets. In a December filing, the company said it engaged Sideways Frequency LLC to carry out paid promotional activity and that the arrangement was made at arm’s length. The response comes after OTC Markets asked for more information about recent promotional campaigns tied to the company’s securities.

A clear timeline from the hiring to the December response

The first public signal came earlier this fall when Kootenay announced an engagement with outside marketing help on Sept. 8, 2025. That statement was broad and did not include many contractual details. On Dec. 17, Kootenay filed a more detailed disclosure saying the company had engaged Sideways Frequency LLC and specifying the nature of the work as paid promotional activity.

Following that filing, OTC Markets sent a request for information. Kootenay replied to the exchange’s questions in writing, confirming the engagement, describing the services as promotional, and asserting that the contract was arm’s‑length. The company’s December disclosure and its reply to OTC Markets are the official record so far; both documents focus on confirming the engagement and the paid nature of the work rather than revealing every term of the deal.

What Sideways Frequency LLC was hired to do — and what Kootenay didn’t fully disclose

Kootenay says Sideways Frequency LLC was retained to perform paid promotional activity on behalf of the company. The filing frames the relationship as commercial and arm’s‑length, meaning the parties are not related by ownership or control. That language is meant to reassure regulators and investors that the promoter is an independent contractor.

But the disclosure leaves some gaps. Kootenay’s filing does not fully spell out the campaign’s scope, the exact duration, or precise compensation details. There’s mention of paid promotion, but not a breakdown of fees, performance triggers, or termination rights. Those missing pieces are the details regulators often want when judging whether a promotion could have misled the market or unintentionally inflated trading activity.

Why OTC Markets stepped in and what could follow

OTC Markets routinely asks questions when it sees aggressive publicity tied to smaller listings. Their concern is simple: paid promotions can push attention and trading, and without solid disclosure, they can mislead buyers. The exchange’s inquiry aims to confirm that investors knew what was happening and that the company followed disclosure rules.

Possible outcomes range from a clean close of the file to follow‑up requests asking for the full contract, payment records, or communications between the issuer and promoter. In more serious cases, OTC Markets can flag the issuer’s profile for investors, which tends to reduce liquidity, or refer issues to securities regulators if there’s evidence of misleading statements or market manipulation.

How this can move Kootenay’s share price and investor confidence

Paid promotions can produce short‑term spikes in volume and price for small‑cap metals explorers like Kootenay. That’s especially true on thinly traded markets where a single campaign can drive outsized attention. But the pattern often reverses: once the promotional push fades or regulators probe the activity, volume can drop and prices can pull back quickly.

For current and prospective shareholders, the risk is twofold. First, there’s price risk: shares can be volatile and may trade on publicity rather than fundamentals. Second, there’s reputational and regulatory risk: a formal warning from OTC Markets or a regulator can make it harder for the company to attract long‑term capital and may limit trading windows. Given those factors, the situation looks risky for short‑term momentum traders and mixed for longer‑term holders who care about project progress and financing plans.

What to watch next

Investors and reporters should track a few items: any follow‑up filings from Kootenay that add contract detail; further correspondence or rulings from OTC Markets; unusual trading patterns in KTN or KOOYF; and any regulatory steps from securities commissions. If additional disclosures show clear, transparent terms and no misleading claims, the issue may fade. If not, expect sharper scrutiny and potential damage to liquidity and investor confidence.

Sources

• prnewswire.com