Companies featured in the current edition of the newsletter: ACCY, ACTC, DRGP, ECOI, GCEH, GNBT, GSPG, HJHO, HYTM, ITUI, PLKH, TAGS, TKO
Despite fears that problems at Lehman Brothers and AIG could trigger a meltdown in the financial sector, all of the major indices still managed to end the week higher. The Dow closed up 201 points for the week, paring its annual loss to 13.9%. The Nasdaq gained 5 points for the week, reducing its year-to-date return to 14.7%. The S&P ended the week 9 points higher, cutting its yearly loss to 14.8%, and the Russell 2000 added 1 point for the week, trimming its annual loss to 6.0%.
The market in large part remains fixated on the fate awaiting Lehman Brothers (NYSE: LEH). Senior bankers from Wall Street were reportedly huddled with members of the Federal Reserve seeking a solution to the investment bank’s problems. Many expect a deal to be announced prior to trading commencing in the Asian markets Sunday evening. Other economic news influencing the markets over the past week included Consumer Credit for July coming in at $4.6 billion, well below the $8.5 billion consensus estimate. Pending Home Sales for July declined 3.2% which was below market’s expectations of a 1.4% decrease. Meanwhile, the Trade Budget for July was -$62.2 billion, well below the $58.0 billion expectation. August retail sales came in at a weaker than expected -0.3% compared to the 0.3% consensus, but did little to move the markets due to the University of Michigan Consumer Sentiment Index rising to 73.1 in September, its highest level so far in 2008, and Producer Price Index falling 0.9% in August, helped by declining energy costs as oil settled the week at $101.18, down 4.8% from a week ago.
What should investors look for next week? Earning releases from financial giants Goldman Sachs (NYSE: GS) on Tuesday before the bell and Morgan Stanley (NYSE: MS) on Wednesday before the open will be closely monitored for clues about the health of the financial sector. Other notable earnings scheduled to be released during the week include Best Buy (NYSE: BBY) and Kroger Co. (NYSE: KR) on Tuesday morning and General Mills (NYSE: GIS) on Wednesday morning. Additionally, Thursday morning, before the opening, look for earnings from Carnival (NYSE: CCL), ConAgra Foods (NYSE: CAG), and FedEx Corp. (NYSE: FDX), while Oracle (NASDAQ: ORCL) will be releasing earning after Thursday’s closing bell. Oil and gas giant Total SA (NYSE: TOT) will hold its mid-year review in New York on Tuesday. Also on Tuesday, Cisco (NASDAQ: CSCO) will host a financial analyst conference.
On the economic calendar, the NY Empire State Index for September will be released at 8:30 a.m. on Monday, while Capacity Utilization and Industrial Production numbers for August will be out at 9:15 a.m. The Consumer Price Index, and the Core CPI for August will be announced at 8:30 a.m. on Tuesday, followed by the Net Foreign Purchases for July at 9:00 a.m., and the FOMC policy statement at 2:15 p.m. This Fed Policy Statement may serve as a catalyst for the market and will be closely followed. On Wednesday at 8:30 a.m., Housing Starts and Building Permits for the month of August will be reported. Expect Crude Inventories for the week at 10:35 a.m. Initial Jobless Claims for the week will be released at 8:30 a.m. on Thursday, followed by Leading Indicators for August and the Philadelphia Fed Index for September at 10:00 a.m.
The Conference Calendar will also be busy during the upcoming week as Merriman Curhan Ford will host its two-day Investor Summit 2008 in San Francisco starting on Monday. Companies scheduled to present include healthcare services company Hythiam, Inc. (NASDAQ: HYTM) on Monday and GoldSpring, Inc. (OTCBB: GSPG), the largest mineral rights holder in the Comstock Lode District in Nevada and ProLink Holdings Corp. (OTCBB: PLKH), the world’s largest provider of digital advertising screens for the golf course market and Global Positioning golf course management systems, on Tuesday. Bank of America Securities will host its three-day 38th Annual Investment Conference in San Francisco beginning on Monday. The three-day Credit Suisse Chemical Conference will take place in New York starting on Tuesday. RBC Capital markets will host its two-day Financial Institutions Conference in Boston on Tuesday and Wednesday. Also on Tuesday, Jefferies & Co. will sponsor its two-day Shipping, Logistics & Offshore Services Conference in New York. Merrill Lynch will host 2 of its Global conferences during the week with the Global Pharmaceutical Conference taking place in London on Monday through Wednesday and the Global Real Estate Conference taking place in New York on Wednesday and Thursday.
Telkonet, Inc. (AMEX: TKO), the leading provider of innovative, centrally managed solutions for integrated energy management, networking, building automation and proactive support services, announced that it has entered into a two-year, $1,000,000 line of credit facility with Thermo Credit, LLC, a funding company specializing in the telecommunications industry. The proceeds from this line of credit, together with the Thermo Credit $2.5 million receivable financing agreement signed in February 2008, will help Telkonet fulfill the pipeline demand for its energy management products, expand its opportunities with energy-saving programs, as well as continue to increase sequential quarterly growth and achieve its goal of operating cash flow breakeven within 2008. The stock closed the week at $0.31, down 1 cent.
Volume Alert: Shares of drug delivery company Generex Biotechnology (NASDAQ: GNBT) jumped 16% on Friday on nearly twice average volume, as the stock rebounded from a sharp selloff that has seen it lose approximately 1/3 of its value since early June. Despite the decline, the company continues to move aggressively forward in enrolling patients in its pivotal Phase III trial of Generex Oral-lyn, its proprietary platform technology for the delivery of insulin into the human body through the oral cavity. Shares ended the week at $0.65, unchanged.
Tarrant Apparel Group (NASDAQ: TAGS), a design and sourcing company for private label and private brand casual apparel, announced that its shareholders approved an amendment to the company’s articles of incorporation to effect a reverse stock split at a ratio within a range of 1-for-1.5 to 1-for-4. As a result, the Board of Directors now has the discretion to determine, within 12 months, whether to implement the reverse stock split and the exact amount of the reverse stock split within the approved range if implemented. The purpose for seeking shareholder approval of the reverse stock split was to provide the Board of Directors with the ability to increase the market price per share above $1.00 in order to maintain the listing of on the Nasdaq Global Market. Shares ended the week unchanged at $0.72.
Volume Alert: Shares of GoldSpring, Inc. (OTCBB: GSPG), a North American precious metals mining company, focused in Nevada, with extensive, contiguous property in the Comstock Lode District, surged 6% on Friday on more than twice average volume after the company announced plans to release results of the updated 43-101 resource report at the Merriman Curhan Ford conference on Tuesday. The report, which was prepared by an independent mining engineering firm, will include results from 57 drill holes, including 19 additional holes that were recently drilled. The company will also discuss recent planned land acquisitions, plans for further consolidation of the Comstock Lode, the progress at the Hartford Complex mine, and exploration opportunities within the Comstock. The stock ended the week up slightly at $0.0425.
i2Telecom International, Inc. (OTCBB: ITUI), a developer of award-winning patented and innovative high-quality Voice-over-Internet Protocol products and services, had its newest application, MyGlobalTalk, featured as a top new technology on CNBC’s The Call program. i2 Telecom CEO Paul Arena was interviewed in the segment about the breakthrough technology that will make the digital-quality cellular VoIP application available to BlackBerry and Windows mobile users for as little as $0.02 per minute. MyGlobalTalk will launch in the U.S. for worldwide service on Monday, September 15. This announcement continues a string of positive news for the company after it reported its first quarterly profit in history for Q2 of 2008. The company expects revenue from the sale of VOIP products and related services to increase by more than 400% this year. The stock was unchanged last week, closing at $0.13.
Halcyon Jets Holdings, Inc. (OTCBB: HJHO), a broker of private jet services, announced record revenue for its second fiscal quarter ended July 31, 2008 last week. The company generated revenue of $13.9 million, compared to revenue of $1.4 million in the year earlier period. Revenue improved as a result of increased client usage of the company’s private travel and concierge services. Trips completed by clients increased from 70 in the 2008 second fiscal quarter to 454 in the 2009 fiscal second quarter. Operating margins on flight services improved from 11.0% in the year-earlier period, to 18.1% in the 2009 second quarter. Despite limited advertising, the company has generated impressive revenue growth. The company believes that private jet travel, due to the wealth of its customers, is less sensitive to an economic downturn. Shares ended the week at $0.29, up 5 cents.
Dynamic Response Group, Inc. (OTCBB: DRGP), an innovative strategic marketing company, provided a mid-quarter sales update as preliminary unaudited gross sales for July and August of 2008 were approximately $7.0 million, a 180% increase compared to the same two-month period in 2007. The company also expects the 2008 third quarter will result in improved operating results compared to the 2008 second quarter, as the company has streamlined operations, reducing or eliminating some of the Selling, General and Administrative expenses incurred during the 2008 second quarter. DRGP’s management continues to focus on reaching GAAP profitability in the near future. Shares were unchanged on the week at $0.018.
ecoSolutions Intl (OTC: ECOI), a developer of environmental-friendly consumer materials, announced that it has received $385,000 in initial orders for its eco-friendly foam material, ecoFoamâ„¢ from The Topline Corporation. Topline will use the ecoFoam material to produce sandals to be sold under leading national brand names, including the Rocawear brand. This is an important announcement since ecoSolutions should benefit from increased brand recognition as the footwear produced will feature the ecoFoam name, and this initial purchase can serve as a catalyst for other footwear companies to approach ECOI as they seek a material to replace the more toxic and ecologically damaging materials traditionally used in footwear. The stock closed at $0.58, down 7 cents.
Global Clean Energy Holdings, Inc. (OTCBB: GCEH), a renewable energy company in the biofuels industry, issued an enthusiastic Letter to Shareholders in which he outlined the recent developments as well as future opportunities for the company. As a renewable energy company focused on the production of Jatropha, a non-food based feedstock used for the production of biofuels, the Letter noted that it is “in the perfect space at the perfect time” as volatile energy prices continue to lend support to the company’s mission of developing non-food based sources for biofuels. GCEH currently owns a 5,000 acre Jatropha energy farm in Mexico and the company is targeting the end of this calendar year to have the 5,000 acres substantially planted. This will keep GCEH on track to commence generating revenue from Jatropha production in FY 2009. The company is also very excited about positive test results of its Jatropha Oil from several biodiesel refiners, as well as the recent announcement by Air New Zealand that it is testing jet fuels produced from Jatropha Oil feedstock. Additionally, the company is currently exploring a number of strategic acquisitions to expand its business, diversify geographic risks, and provide shorter-term revenue. Shares were up almost 2 cents last week, closing at $0.048.
ProLink Holdings Corp. (OTCBB: PLKH), the world’s leading provider of Global Positioning Satellite golf course management systems and digital out-of-home on-course advertising, announced that it will host upfront presentations in Manhattan on September 22-24 to promote its integrated digital out-of-home marketing programs to major brands planning their 2009 media strategies. The timing of these meeting will correspond with Advertising Week, North America’s largest and most prestigious gathering of ad industry decision-makers. Andy Batkin, CEO of the ProLink Network – the media division of ProLink – will meet with marketing executives from leading companies to discuss all aspects of the ProLink Network during the upfront meetings, such as new products and Internet enterprises, sales and distribution concepts, custom research opportunities and innovative programs which incorporate a comprehensive cross-section of media including television. ProLink’s pioneering national advertising program reaches more than 13 million golfers nationwide via its 30,000 GPS screens. The audience is primarily male, with an average net worth of more than $1.4 million and annual household income exceeding $165,000. Shares ended the week at $0.40, down 10 cents.
Advanced Cell Technology, Inc. (OTC: ACTC), a developer of stem cell-based treatments, announced a cost reduction program designed to reduce annual operating expenses by $5-6 million through closing 2 Research & Development facilities in Alameda, CA and Charlestown, MA. Advanced Cell Technologies can now focus all of its efforts on its most advanced clinical programs in retinal disease and the manufacturing of red blood cells. The company is also concentrating on securing funding for a Phase II trial for its Myoblast program, an autogolous adult stem cell therapy for the treatment of heart disease, which has successfully completed four Phase I clinical trials and has clearance from the FDA to begin Phase II trials. Given the current capital market environment, it is prudent to focus on the most advanced clinical programs and these cost-reducing activities, together with successful implementation of a partnering/licensing strategy, should allow the company to allocate funding to further develop its later-stage clinical programs while significantly reducing the cash utilization rate. The stock closed at $0.044, up 1 cent for the week.
Alternative Construction Technologies, Inc. (OTCBB: ACCY), a company that engages in the research, development, and marketing of proprietary products for the construction industry, has entered into an exclusive supplier agreement with Alvarez Construction Group of Florida. Alvarez is an emerging developer and builder of SHIP (State Housing Initiative Partnership) homes, affordable housing and low cost communities for elderly and retirees on fixed budgets. Alvarez plans to use ACCY’s ACTech Panel system exclusively as its structural wall and roof components in all of its non-lumber and non-block construction jobs. Coastal regions of Florida face unique weather conditions that cause many challenges for housing construction. This agreement between ACCY and Alvarez will allow for the building of affordable housing while also realizing significant monthly savings in utility, maintenance, and insurance expenses. ACCY’s management expects that this will be the first of many partnerships designed to achieve that goal of lower-cost green building. Shares gained 3 cents last week to close at $0.19.
On the Wires: GoldSpring, Inc. (OTCBB: GSPG) appointed Robert A. Reseigh to its Board of Directors to serve as an independent director. Mr. Reseigh has over 35 years of experience in the mining and underground construction industries. Alternative Construction Technologies, Inc. (OTCBB: ACCY) announced that Michael Hawkins has resigned as CEO and Chairman of the Board of Directors. Anthony Francel, the company’s COO was named CEO and Chairman of the Board of Directors.
