Even though his company's total annual revenues were less than $6 million, Zhang Junsheng, chairman of JHCC Healthcare Group, was still determined to make his suburban hospital in Northeastern China's Heilongjiang province the first hospital in the area to be publically traded overseas.

Instead of the NASDAQ or New York Stock Exchange, Zhang chose the Over-the-Counter Bulletin Board (OTCBB), as have hundreds of other small- and middle-sized companies that need cash but don't meet the standards of NASDAQ or the Big Board.

OTCBB is a less regulated market. There are no listing requirements, such as cash flow, revenue or net tangible assets. Some NASDAQ or NYSE listed companies retreat to OTCBB after failing to meet the two exchanges' requirements.

OTCBB also doesn't require listed companies to have an audit committee overseeing its financial reporting and disclosure. OTCBB stocks are widely regarded risky, and all stocks on OTCBB are tagged with the suffix "OB".

"Investing is highly speculative," said Rugui Chen, president of the Chinese Association of Startup & Entrepreneurs, who also invests in the OTCBB market. "So normally, institutions in the US, like retirement funds, will rarely invest in such stocks."

Still, the exchange is attractive for smaller businesses in China. During a road show on Feb 12, Zhang said he explored other channels to finance his hospital, including private lending. "There are so many gray areas in China," he said. "My IQ in gray areas is very weak."

"China's healthcare market is large, and our IPO (initial public offering) on OTCBB intends to seize the opportunity," said Zhang.

The company did not win the favor of private equity (PE) or venture capital (VC) investors either, said Chen, since they tend to prefer more innovative and less established companies. "It is quite an embarrassing position," he added.

Still, the market looks attractive. "Being a public company creates increased liquidity of the ownership shares that VC or financing from a private company cannot provide," said Stephen Brook, partner of Burns & Levinson LLP, which has helped several Chinese companies go public.

"This increased liquidity usually leads to a higher company valuation," Brook said. "Increased liquidity creates ease for acquisition of other companies using the company's stock, and the stock is more attractive to use in incentive plans to obtain and retain key employees."

Nicolas Lin, director of investor relations at Moxian China, told China Daily that even though his company is on the OTCBB, it still has to comply with Securities and Exchange Commission (SEC) and FIRNA regulations.

The Financial Industry Regulatory Authority (FINRA), which oversees daily operation of OTCBB, didn't respond to calls and e-mails for comment.

Moxian China, a Shenzhen-based company that develops solutions for merchants to promote businesses through online platforms, was listed on OTCBB in April 2014.

Companies listed on OTCBB are still required to submit regular financial statements with the SEC or a banking or insurance regulator. Moxian also releases its quarterly and annual financial reports.

Making the information public has drawn the company more investors. "After being listed, we have received interest in the company from various fund managers and investors," Lin said.

As OTCBB companies develop, they may also "uplist" to other markets like NASDAQ, NYSE or AMEX. "It is quite common for the OTCBB companies to grow and meet the larger markets listing requirements", said Brook.

According to a report by Dragon Gate Investment Partners published on July 2014, uplisting is cheaper than going to larger markets directly, and from 2011 to 2013, some 1.2 percent of stocks on OTCBB uplisted annually.

China's National Equities Exchange and Quotation (NEEQ), which is modeled after the OTCBB, also saw a boom last year. According to the Financial Times, fundraising increased tenfold by November, as many start-ups saw it as an alternative to hard-to-get bank loans and going on to major stock markets, which could make them wait for years.

Lu Huiquan in New York contributed to this story.