August 6th CEOcast Weekly Newsletter

Companies featured in the current edition of the newsletter: ACCP, ARGA, CHIP, GNBT, HSOA, HYTM, ILNS, ISON, ITUI, IWEB, PCLI, PLKH, RVEP, SFP,  SOMD, USAT

Fears of a credit meltdown caused a sharp selloff in the markets on Friday, with small-cap stocks again bearing the brunt of the downward pressure. The Russell 2000 declined more than 3.6% on Friday, and is now down 10.6% since July 19th. It is down 4.1% for the year, the only index in the red. The Dow closed down 83 points for the week, reducing annual gains to 5.7%. The Nasdaq fell 50 points for the week, lowering yearly gains to 3.9%. The S&P lost 25 points, holding onto a slender 1% gain this year. Microcap stocks have performed even worse than other stocks, as reflected by a 5.9% decline in the Russell Microcap Index this year.

Bulls’ efforts at bargain hunting after the prior week’s steep losses were abruptly halted Friday after negative commentary regarding the credit market by Bear Stearns Chief Financial Officer. He said that the credit markets were the worst he had seen in 22 years, raising concerns that the investment bank, which already announced problems with two hedge funds, could face a liquidity crisis. American Home Mortgage said it would likely cease operations this coming week, wiping out nearly $1 billion in market capitalization since the end of June, helping stoke fears that other participants in the mortgage market could face similar problems. The turmoil seemed to spread to the broader housing market, as Wells Fargo raised the rate on its 30-year mortgage to 8% late in the week from 6.8% earlier.

There was some positive news on the week. The majority of earnings reports came in better-than-expected and pending sales of existing homes rose 5%, posting the highest gain in over three years. Still, the sharp downturn in the markets caused many of the key indexes to break through key technical levels of support. The rout on Friday caused the S&P 500 to break below its 200-day moving average for the first time in almost one year. The Russell 2000 closed at its lowest level since November.

What should investors look for this week? The earnings calendar continues to be active, with Mentor (NYSE: MNT), Conseco (NYSE: CNO) and Novatal Wireless (NASDAQ: NVTL) all scheduled to report after Monday’s close. On Tuesday, prior to the opening, look for earnings from Dean Foods (NYSE: DF), Duke Energy (NYSE: DUK), Emerson Electric (NYSE: EMR) and King Pharmaceuticals (NYSE: KG), followed by Cisco Systems (NASDAQ: CSCO) after the close. Wednesday morning, expect numbers from Allis-Chalmers Energy (NYSE: ALY), Cablevision (NYSE: CVC) and Sprint Nextel, (NYSE: S), with American International Group (NYSE: AIG) reporting after the close. Prior to Thursday’s opening, Cardinal Health (NYSE: CAH) posts results, with Deutsche Telekom (NYSE: DT) expected to release results during the day.

The economic calendar will be closely monitored as well, kicking off with the Q2 preliminary Productivity numbers before Tuesday’s opening, followed by the highly anticipated FOMC policy statement at 2:15 p.m., and the June Consumer Credit report released at 3:00 p.m. Expectations continue to increase that the Federal Reserve will at least signal in its policy statement the willingness to cut rates later in the year. The bond market is currently pricing in a rate cut in October and another one in January. On Wednesday, look for June Wholesale Inventories data at 10:00 a.m., along with Weekly Crude Inventories at 10:30 a.m. Weekly Jobless Claims are expected to be announced Thursday before the opening, and Import/Export Prices for July will be reported before Friday’s opening, followed by the July Treasury Budget data later that afternoon.

Earnings Preview: Shares of Home Solutions of America, Inc. (NASDAQ: HSOA), a provider of recovery, restoration and rebuilding/remodeling services to commercial and residential areas, rallied strongly last week, ahead of releasing its second quarter results for the period ended June 30, 2007 on Wednesday before the market opens. Respected Rodman & Renshaw Senior Industrial Services analyst Joe Giamichael initiated coverage of the company last week with a “Market Outperform,” the firm highest rating (54% of stocks under coverage carry such a rating) noting that HSOA “provides a compelling long term investment opportunity.” Interestingly, he initiated coverage prior to second quarter earnings, and did so despite having Q2 estimates significantly below the other analyst following the company, suggesting a high degree of confidence in the company achieving the near-term catalysts he outlined in his report. His revenue and EPS estimates of $44.2 million and $0.12, which we believe are extremely conservative and we will discuss below, bring the quarterly consensus estimates down to revenue of $46.25 million and EPS of $0.14, making it easier for the company to exceed analyst estimates. The company’s guidance was for Q2 revenue of $44-48 million and EPS of 14-17 cents. In his report, which contains a price target of $9, Giamichael noted several near-term catalysts including “A/R Collection, potential resolution of shareholder’s lawsuit and a potential strategic partnership with a credible developer would improve the balance sheet and should lead to multiple expansion.” There is no banking relationship between the companies. The other firm who covers HSOA, Sanders Morris Harris (SMH), in a savvy call, downgraded Shaw Group (NYSE: SGR), another construction services company, just days before the company said it would restate 2006 results, The stock declined 10% as a result of the news. However, SMH has maintained its Buy rating on shares of HSOA into earnings. So what do we expect from the company? Q2 should represent the first quarter that the company starts to look like a more traditional construction services company, reflecting a transition that began at the start of the year. Construction services should represent a more predictable and stable revenue base than the recovery business, albeit with lower margins, making it a bit easier to forecast. If one takes the backlog HSOA announced at Q1 of $112 million for FY’07 and divides it by three quarters, it would equate to approximately $38 million in revenue per quarter, excluding any new unannounced work that was completed in Q2. In mid-May, HSOA announced $11 million in new contracts which was not included in the ’07 backlog. If those burn ratably, it would add nearly $2 million in Q2 revenue. We also know from the New Orleans-based Daily Journal of Commerce, a publication that covers the construction industry, that the company won projects in Q2 after the time it provided its backlog which were not announced, so that could add incremental Q2 revenue. In addition, although the company said it did not expect any revenue from either the Tampa or New York projects until the second half of the year, it said at its Annual Shareholder’s Meeting in June that engineering work had already begun at the Tampa project and that Blue Diamond, had already begun construction on the New York project, so we believe it should be able to recognize some revenue from these two projects in Q2. We would expect interior services, which includes business with Home Depot and Centex, to be weak and below the $8.6 million from Q1, due to seasonal factors which boost business with Centex in HSOA’s first quarter, as well as multiple warnings from Centex and cautious comments from Depot. We believe that as the company’s construction services business continues to grow, the importance of the Depot and Centex relationships will continue to decline, causing weakness in the housing market to become less relevant. As a result of greater predictability in construction services revenue and strength in that business, we believe HSOA could meet the bottom of its revenue guidance without any revenue from interior services . Strong top-line growth should result in an excellent EPS profile, even if EBITDA margins are reduced as the Street expects. The impact of the August 2nd decision by the 5th U.S. Circuit Court of Appeals, which vacated a November ruling by a U.S. District Judge that opened the door for insurance companies to be held liable for flood damage that policyholders claimed was caused by negligent design, construction and maintenance of the levees in New Orleans, should be a non-event for HSOA, as most of their insurance work in the area comes from wind, not flood damage. However, what will certainly impact its business going forward is what the company says about progress on the two $100 million contracts it previously announced to provide construction services for projects in New York and Tampa. The stock traded as high as $8.24 after those contracts were announced. With 44% of the float short and the company trading at just 11 times trailing 12-month earnings, an in-line or better earnings report could send shares higher. Note that shares jumped more than 8% after the company reported Q1 results. Shares ended the week at $5.40, up 90 cents.

Earnings Preview: Hythiam, Inc. (NASDAQ: HYTM), provider of comprehensive behavioral health management services, will report financial results for its second quarter ended June 30, 2007 on Thursday, August 9 2007, after the market closes. Investors will likely pay closer attention to the company’s financial results than in previous quarters, to determine whether the changes it made to its private pay business are gaining traction and what contribution the acquisition of a consolidating position in behavioral services company CompCare is making to the bottom-line.  The analyst covering the company at William Blair expects the company to report revenue of $9.2 million ($1.6 million from PROMETA sales and $7.6 million from CompCare). The company said in its Q1 announcement that it expected full-year revenue of $50 million. Hythiam had Q1 revenue of $8.8 million, including $1.2 million from sales of PROMETA. Perhaps more important than the quarterly results will be what the company says about its relationship with Blue Cross Blue Shield, where there are currently ongoing pilot studies which could result in broad adoption of PROMETA, continued state adoption of the protocols, including funding allocations, and the progress it is making in securing an international licensing deal. Notably, results from the first double-blind placebo controlled study of PROMETA are expected in less than three months, which could serve as a strong catalyst for the stock and help to drive adoption of the protocols. Shares ended the week at $7.22, down 42 cents.

VeriChip Corporation (NASDAQ: CHIP), a leading provider of identification and security technology, could get a boost from the Department of Defense’s (DoD) recent award of $1.6 million to a research team headed by Clemson University’s Center for Bioelectronics, Biosensors and Biochips, for implantable biochip research, specifically for the development of an implantable biochip that could relay vital health information if a soldier is wounded in battle or a civilian is hurt in an accident. The chip would be designed to relay such information as lactate, glucose and oxygen levels in the blood in the event of a major hemorrhage, on the battlefield or elsewhere. The wounded soldier could also benefit by giving medical personnel immediate access to the soldier’s medical history, known allergies, and other criteria. Other potential applications include monitoring vital signs of astronauts during long-duration space flights and reading blood-sugar levels for diabetics, as well as civilian first-responder uses. While Clemson’s chip is probably years from coming to market, VeriChip currently has the only FDA cleared chip for use in humans which is currently being implanted by physicians in the company’s target markets. The DoD’s willingness to consider this technology could lead to significant opportunities for CHIP. Shares ended the week at $6.36, up 50 cents.

Wall Street has definitely taken notice of USA Technologies, Inc. (NASDAQ: USAT), a developer of cashless vending and energy management products, as noted in an article published last week by Business Week’s influential columnist Gene Marcial. USA Tech’s robust expansion into the $46 billion vending machine market has impressed SAC Capital Associates, led by billionaire trader Steven Cohen, who now own over 1.6 million shares of USAT common stock, more than 10% of the outstanding shares. Global asset manager Wellington Management owns approximately 8% of the company’s shares. Adoption of cashless technology industry-wide could lead to vending machine revenue growth of 32%, according to Emerging Growth Equities, with USA Tech having “substantial upside if major industry adoption develops.” The company’s revenues are estimated at $9.8 million for 2007, and $16.2 million for 2008. In addition, the company announced last week that the NASDAQ Stock Market has approved its application to upgrade its listing from the NASDAQ Capital Market to the NASDAQ Global Market. The NASDAQ Global Market consists of over 1,450 companies that have met, and continued to meet, stringent financial and liquidity requirements and agreed to meet specific corporate governance standards, and should provide increased market visibility and access to the institutional investors. Trading on the NASDAQ Global Market will commence on Wednesday, August 1, 2007 under the company’s current ticker symbol “USAT”. Shares ended the week at $8.28, up 17 cents.

Rio Vista Energy Partners LP (NASDAQ: RVEP), a master limited partnership focusing on the acquisition of oil and gas exploration and production assets, last week reported the acquisition of Regional Enterprises, Inc., a Virginia based company principally engaged in liquid bulk storage, railcar transloading and transportation of bulk liquids, for approximately $9.0 million. Located on the James River in Hopewell, Virginia, Regional’s primary facilities receive bulk chemicals and petroleum products from ships and barges, and have approximately 10 million gallons of available storage. Regional also receives product from a rail spur capable of receiving 14 rail cars and utilizes its fleet of 32 tractors and 50 tanker-trailers to distribute the various products it receives, as well as performing direct hauling operations on behalf of its customers. Regional reported revenues of $7.1 million in 2006, and for the eight months ending July 1, 2007 had revenues of approximately $3.7 million. The company also announced a $1.25 cash distribution to pay an existing arrearage in the payment of quarterly distributions, and will be paid on or before December 31, 2007 to record holders as of the close of business on August 7, 2007. Shares ended the week at $20.12, up $3.61.

Drug delivery company Generex Biotechnology Corporation (NASDAQ: GNBT), announced  publication in the peer-reviewed International Journal of Cancer of an article entitled “Induction of potent CD4+ cell-mediated responses by a helper HER-2/neu peptide linked to the Ii-Key moiety of the invariant chain” that was published online July 16, 2007. The article presents studies demonstrating the anti-tumor activity of its subsidiary Antigen Express’ novel Ii-Key/HER-2/neu immunotherapeutic vaccine as well as mechanistic explanations for the enhancements observed using this proprietary vaccine. Specifically, the modification developed by Antigen Express increases the interaction time between the peptide vaccine and T helper cells, thereby enhancing specific stimulation against the HER-2/neu peptide. The HER-2/neu vaccine being developed by Antigen Express (AE37) is currently in Phase II clinical trials in patients with breast cancer. Those studies are being conducted in conjunction with United States Military Cancer Institute’s Clinical Trials Group under a Clinical Trial Agreement. The same compound will also be investigated in patients with HER-2/neu-positive prostate cancer. Patients for those trials have been selected and dosing is expected to begin before the fall of 2007. Shares ended the week at $1.48, down 9 cents.

Volume Alert: IceWEB Inc. (OTCBB: IWEB), a software services provider, traded over 3.2 times average volume last week, and reported that it has been awarded a contract valued at $437,000 to provide software risk analysis tools manufactured by Ounce Labs to a Federal Agency, to help the agency to reduce the potential for security breaches by making it possible to identify, prioritize and eliminate application vulnerabilities across their entire software portfolio. Earlier in the week, IceWEB announced that revenue for the 3^rd quarter 2007 is up 337% over the 3^rd quarter 2006, and now estimate revenues of $19 million for the year, compared with an earlier estimate of $17 million. The company also said it expects revenues of $30 million in 2008. IceWEB reported that high levels of both customer and partner satisfaction with the company’s software as a service offerings have resulted in a subscription renewal rate of greater than 99.5% for the first six months of 2007 and has contributed to the subscription base doubling in size in the 3rd quarter. The company is now forecasting 10,000 subscriptions by year-end. The company also announced that it will launch its IceSECURE product suite in the 4^th quarter, which will allow IceWEB to the offer lucrative hosted email security services into the Federal Government market space, and should significantly increase the company’s revenue-per-subscription. Additionally, IceWEB reported that the latest software update (version 1.0.1) released by Apple for the iPhone platform includes significant enhancements in email capabilities when working with IceMAIL, the company’s flagship product, in a Hosted Exchange environment. Shares ended the week at $0.75, up 2 cents.

Earnings Preview: Auriga Laboratories, Inc. (OTCBB: ARGA), a specialty pharmaceutical company with products for the treatment of acute respiratory diseases and dermatological conditions, will release second quarter financial results, for the period ended June 30, 2007 on Tuesday, August 7th after the market closes. Gross revenues rose significantly last quarter as a result of the launch of new product lines Zinx and Aquoral. With a portion of its product line stemming from seasonal products that treat cold and flu symptoms, investors should look for commentary from management pertaining to the progress of non-seasonal products including Aquoral for dry mouth, Ellevan an OTC intranasal lubricant, Xyralid RC for mild hemorrhoidal symptoms and Xyralid LP Lotion for anti-inflammatory anesthetic relief of itching, abrasions and similar conditions of the skin. Margins for the quarter should continue to benefit from the company’s business model of employing commission-only salespeople to place prescription products into the marketplace. Note that the first and fourth quarter has seasonally been the strongest for the company. Additionally, ARGA last week launched two newest members of the Zinx family of cough cold medications. The Zinx Allergy Kit and the Zinx Kids’ Sneeze Kit include the convenience of two products: a prescription strength combination product to provide symptomatic relief of various symptoms and Zinx Lozenges. These products should help Auriga expand on its already strong presence in the decongestant/antihistamine field, estimated at roughly $1.0 billion annually. Shares ended the week at $0.99, up 15 cents.                   

ProLink Holdings Corp. (OTCBB: PLKH), the world’s leading provider of GPS golf-course management systems and on-course advertising, last week introduced the SmartCart feature designed to prevent golf carts from entering restricted areas or leaving course property. SmartCart enables golf facilities with ProLink’s ProStar GPS system to detect when a cart has ventured off course grounds or into restricted areas on the course itself, first warning the driver while signaling clubhouse personnel. If the driver does not comply, the cart automatically shuts off and can’t be re-started by the driver. While not only helping to deter theft of the carts themselves, the course operator can choose which parts of the course to restrict at any given time, such as environmentally sensitive areas, ground-under-repair, out-of-bounds or sections where maintenance is being performed, keeping golfers from entering potentially dangerous areas while protecting vulnerable wildlife, flora and turf. Additionally, ProLink Solutions, a wholly-owned subsidiary of ProLink Holdings Corp., reported that the Resort Course at Grande Dunes in Myrtle Beach, S.C. has completed installation of the ProLink Solutions GPS system, joining other S. Carolina neighbors including Sea Pines Resort, Barefoot Resort & Golf, Barefoot Dye Club and Wild Dunes. ProLink Solutions also announced that its international distributor, Elumina Iberica, has secured the rights to install the system at the Golf Club Gut Neuenhof, in Frondenberg, Germany, the first German course to feature ProLink. ProLink’s media- rich system is now featured at more than 500 courses worldwide, including past Ryder Cup hosts the K Club (Ireland) and Valderrama (Spain), and in other locations such as South Africa, Japan, Dubai and Mexico. Shares ended the week at $1.20, down 5 cents.

Intellect Neurosciences, Inc. (OTCBB: ILNS), a biopharmaceutical company focused on development of disease-modifying therapeutic agents for the treatment and prevention of Alzheimer’s disease and related disorders, last week reported results from its Phase Ia clinical trial if the company’s lead drug candidate OXIGON. The trial was a double-blind, randomized, placebo-controlled, single-escalating dose clinical study in 54 elderly healthy volunteers, and showed no serious adverse effects in any of the subjects even at the highest tested single dose of 1.2 grams. OXIGON is a unique antioxidant and anti-amyloid compound that is a potentially disease modifying drug for AD, Huntingdon’s, Parkinson’s and other neurological conditions. Patents related to the use of OXIGON, which have been granted in the U.S. and Europe, are owned jointly by New York University and the University of South Alabama, are exclusively licensed to Intellect. Some 24 million people worldwide suffer from the symptoms of Alzheimer’s disease, and that number is expected to increase to 80 million by 2040. Currently, there are no drugs on the market that slow or arrest the progression of the disease, perhaps giving OXIGON blockbuster potential. Shares ended the week at $1.80, down 40 cents.

Isonics Corporation (NASDAQ: ISON), a provider of innovative solutions for the homeland security and semiconductor markets, filed its annual report for the year ended April 30, 2007 last week. Total revenues increased an impressive 49.2% to $27.7 million, mainly driven by semiconductor sales and security services. Net loss for the year was reduced to $(13,165,000) for the year ended April 30, 2007 as compared to $(32,341,000) as management continues to implement cost cutting efforts while growing sales. The company anticipates its overall gross margin to increase correspondingly with increases in revenue. In the near-term, the growth in the semiconductor division may be affected by the reported inventory buildup in certain products by the company’s semiconductor customers. Investors should monitor status updates pertaining to Isonics’ relationship with Lucent as payment deadlines are due. Shares ended the week at $0.89, down 43 cents.

i2Telecom International, Inc. (OTCBB: ITUI), a developer of ultra-portable high quality Voice-over-Internet Protocol products and services, reported last week that the rate of new customers has doubled in July, and the company has completed a major system upgrade, further improving call quality and network stability to support this growth. The company also announced a $50 credit for customers of SunRocket, a VoIP provider that recently ceased operations. I2Telecom believes the company will reach cash-flow break-even by year-end, if new customer sign-up continues at its present pace. Shares ended the week at $0.06, down 2 cents.

Salton, Inc. (NYSE: SFP), a leading designer, marketer and distributor of branded, high-quality small appliances, home decor and personal care products, reported last week that it has received from APN Holding Company, Inc. written notice of termination of the merger agreement dated February 7, 2007 between Salton and APN Holdco. The company believes that APN Holdco has, for some time, not acted in good faith and Salton intends to vigorously pursue its claims and remedies against APN Holdco, its affiliates and representatives. Salton said it has entered an interim amendment to extend the repayment date on some outstanding debt to Aug. 6, and will continue to explore strategic alternatives, which may include discussions with APN Holdco and other third parties. The company also announced that it received notice from the NYSE that trading in the company’s common stock will be suspended prior to the opening of business on Monday, August 6, 2007 and that the company’s common stock will be delisted. The Company does not intend to appeal this notice, and is examining other trading alternatives for its common stock, and expects its common stock to be quoted on the OTC Bulletin Board following delisting from the NYSE. Shares ended the week at $0.46, down 48 cents.

On the Wires: Access Pharmaceuticals, Inc. (OTCBB: ACCP), an emerging biopharmaceutical company that develops and commercializes propriety products for the treatment and supportive care of cancer patients, last week announced that Esteban Cvitkovic, M.D., Vice Chairman (Europe), has agreed to an expanded role at Access Pharmaceuticals as Senior Director, Oncology Clinical R&D, and will focus primarily on ProLindac, Access’ novel DACH platinum drug, which is currently in a Phase 2 clinical trial in Europe in patients with relapsed ovarian cancer. Dr. Cvitkovic has written more than 200 peer-reviewed articles and 600 abstracts focused on therapeutic oncology development. Drug delivery company Generex Biotechnology Corporation (NASDAQ: GNBT), presented last week at the American Association of Diabetes Educators Annual Meeting & Exhibition, in St. Louis, Missouri. The exhibition showcased Generex’s proprietary technologies for the development of products that will help patients manage their diabetes, such as Oral-lyn, the company’s proprietary oral insulin spray product, and Glucose RapidSpray, for people who want or need additional glucose in their diets.

SPECIAL SITUATIONS:

Studio One Media Inc. (OTCBB: SOMD) $5.40

One of the most successful shows in television history has been American Idol. Young or old, people of all ages have made the show the most popular weekly series, and made Simon Cowell, Randy Jackson and Paula Abdul household names. The show has made Fox a force in primetime television. There may now be a way for investors to capitalize on the success of the popular show through Studio One Media, Inc., a company that is engaged in the design and manufacturing of a proprietary (patents pending), self contained interactive audio/video recording studio designed for installation in shopping malls and other high traffic public areas. The Studio will enable the public, for a fee, to record their video and voice images in a state-of-the-art recording studio environment and enter their performances in music, modeling and other talent related contests. In addition, users choose from hundreds of diverse video backgrounds in which to stage their performance including concert halls and landscapes.

Since going public a few months ago, the company has remained under the radar screen, developing the prototype, website and securing the manufacturing to produce the studios on a large scale. The company plans to place the studios in malls throughout the country, where consumers will be able to, among other things, create an “American Idol” type audition. Using state-of-the-art technology, including high-definition video, consumers will be able to record themselves singing, modeling or other activities to demonstrate their talent. The company plans to provide entertainment industry sponsored competitions, offering prize money, and opportunities for contracts such as American Idol offers its winners. A DVD of each performance will be burned onsite for each user and they will also be able to email their videos to their friends.

The company plans to store these videos on its web site, where it will create a social networking experience for visitors, as consumers view their videos and share them with friends. In addition, the company plans to solicit advertising for its web site and for the kiosks. Social networking sites such as YouTube, which was acquired by Google for approximately $1.6 billion, have demonstrated the value that can be created through heavily trafficked sites. Other social networking sites such as Facebook and MySpace have been highly successful.

The Company has assembled an impressive management team. Larry Ryckman, who was the co-founder and President of QSound, a Nasdaq-listed company that develops, licenses and distributes audio enhancement algorithms and software to licensees in the mobile devices, consumer electronics and personal computer industries, is CEO of its operating subsidiary. In a career spanning two decades, Mr. Fisher has represented dozens of internationally recognized models including Naomi Campbell, Stephanie Seymour and Gabriella Reece. Mr. Fisher is also well known for negotiating trend-setting media contracts and the modeling agency he founded which billed in excess of $80 million in contracts with such companies as Calvin Klein, Revlon, Victoria’s Secret and Ralph Lauren. Presently Mr. Fisher specializes in brand management and manages fashion designer Nicky Hilton, heiress of the Hilton Hotels Corporation. Mr. Fisher and Ms. Hilton are currently planning to open a chain of Nicky O hotels and NH Retail stores around the world. Recently, the company named Lionel C. Martin as Director of Video Production. Mr. Martin will oversee the direction and creation of the “virtual video environments” that Studio One will offer users in its interactive high definition audio/video recording studios. Labeled “The Godfather of Music Videos” by Sean “Diddy” Combs, Lionel has dominated the music video industry for over 20 years. Lionel has directed over a hundred videos for multi platinum artists. Other executives include creative director Max Soussan and technical director of video production, Emmy Award winner Matt Long.

The company has a market capitalization of approximately $57 million, reflecting its low-profile on Wall Street and the fact that revenue is not expected to commence until the first studios are installed in the fall. Still, if it is able to capitalize on the unprecedented popularity of American Idol and roll-out its studios across the country, it could increase high-margin revenue quickly. With the enormous popularity of American Idol, if Studio One is able to generate even a small portion of that interest, the stock could become a big winner.

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