Companies featured in this edition of the newsletter: ACTC, CBAI, CICS, CVM, DKAM, ICLK, IMUC, ITUI, PHC
Markets finished mixed this week, as early sell offs on Monday and Tuesday were recouped later in the week following some notable earnings releases and some conflicting news on the economic front highlighted by the Fed’s rate decision on Wednesday. All told, the Dow ended down 1.2% on the week, losing 101 points to close at 8438, bringing its YTD losses to 3.9%. The Nasdaq gained 0.6% to close at 1827, up 16.6 on the year, while the S&P 500 and Russell 2000 finished down 0.3% and up 0.1% respectively, bringing their yearly gains to 1.7% and 2.8%.
The week got off to a bearish start, as the S&P 500 fell 3.1% on Monday following the announcement that the World Bank had cut its worldwide GDP forecast. Energy and financials were the main laggards on the week, posting losses of 2.3% and 1.1% respectively, while telecom and healthcare led the way back from Monday’s sell off, finishing up 3.7% and 1.4%. Earnings releases on the week provided no definitive guidance to investors, as Oracle (NASDAQ: ORCL) managed to beat estimates while raising guidance for the coming quarter, but Walgreen (NYSE: WAG) and Nike (NYSE: NKE) both declined following disappointing results.
Economic news was again mixed for the week, with new home sales coming in below consensus, down 0.6% versus an expected increase of 2.3%, while existing home sales posted an increase of 2.4% from April, slightly below consensus estimates of 2.4%. Initial jobless claims were worse than expected while continuing claims also managed to disappoint. GDP showed a 5.5% annualized decline which was slightly better than the expected 5.7% drop. The FOMC left benchmark rates unchanged noting a slowdown in the economic contraction, but also stated that economic conditions are likely to warrant continued low levels of the federal funds rate for an extended period of time.
What should investors look for this week? It will be an abbreviated trading week with markets closed on Friday in observance of Fourth of July, but the slew of labor market data due out on Thursday morning should garner attention from investors who have not gotten an early start to their holiday. While unemployment figures are a lagging indicator of economic recovery, it is expected that investors will focus on them, as signs of improvement will undoubtedly be interpreted as an indication of pending economic recovery.
Noteworthy earnings reports will be few and far between this week, but look for results from General Mills (NYSE: GIS) before the bell on Wednesday.
Economic releases for the week begin on Tuesday with Consumer Confidence figures for June and the S&P Case Shiller Home Price Index for April released in tandem at 9:00am followed by Chicago PMI for June at 9:45 a.m. On Wednesday, look for ADP Employment Change figures for June, ISM Index for May and Pending Home Sales, also for May, released together at 10:00am followed by weekly crude inventories at 10:30am and Truck and Auto Sales at 2:00pm. The week wraps up on Thursday with Nonfarm Payrolls, the Unemployment Rate, Hourly Earnings and Average Workweek, all for June, along with weekly initial jobless claims all released together at 8:30am, with Factory Orders for May due out at 10:00am.
There are no conferences of note scheduled due to the holiday shortened week.
CEL-SCI Corporation (AMEX: CVM), a company engaged in research and development of drugs and vaccines, announced last week that it has entered into a definitive agreement with an institutional investor that will generate proceeds of approximately $5 million for CVM. Under the terms of the agreement, CEL-SCI has agreed to sell 12.5 million units, with each unit consisting of one of the company’s common shares and 0.67 warrants to purchase one share of common stock; the investor has agreed to purchase the units at a purchase price of $0.40 per unit. The warrants, which represent the right to acquire an aggregate of up to 8.375 million common shares, will be exercisable at any time on or after 181 days from the closing date and prior to the 5-year anniversary at an exercise price of $0.50 per share. The transaction is anticipated to close on or about June 29, 2009. Proceeds from the sale are expected to be put towards acceleration of CVM’s H1N1 swine flu work, the validation of the company’s manufacturing facility for contract manufacturing services, and to produce cancer drug Multikine for the planned Phase III clinical trial. In other news last week, CVM announced that it has filed a provisional U.S. patent application covering its L.E.A.P.S. immune vaccines for the prevention/treatment of H1N1, swine, bird flu, Influenza A and evolving mutants or variants of these viruses. The provisional patent allows the company to preserve its rights to file patents on these inventions and for their use world-wide either as an injected vaccine before a person is infected or as a therapeutic vaccine for treatment. Shares lost ten cents on the week to close just above $0.40.
Volume Alert: Shares of Pioneer Behavioral Health (AMEX: PHC), a leading provider of inpatient and outpatient behavioral health services, gained 13% on more than twice average volume last week, perhaps in anticipation that the company could receive CMS certification for their Seven Hills Behavioral facility in Nevada. PHC previously said that it believed it was “close” to receiving certification. Shares gained fifteen cents on the week to close at $1.30.
interCLICK (OTCBB: ICLK) the fastest growing advertising network in the US according to comScore, announced last week that it has completed a private placement, raising a total of $2.5 million. ICLK sold 2.5 million shares of its common stock and five-year warrants to purchase 625,000 shares of common stock at an exercise price of $1.40 per share to existing shareholders, with proceeds from the financing to be used for working capital in the form of increased investments in sales, marketing, and technology which the company expects will promote continued strong growth. ICLK also recently raised its 2009 revenue forecast for the second time this year in response to strong advertiser demand for high ROI solutions, as the company now expects ’09 full year revenue of over $40 million, up from its previous guidance of $36 million, marking an increase of over 80% from the previous year’s $22.4 million. Shares gained five cents on the week to close at $1.20.
Volume Alert: Shares of stem cell company Advanced Cell Technology, Inc. (OTC: ACTC) soared to a new 52-week high on three times average volume, as the stock continues its month-long surge which has seen shares gain 67% this month on heavy volume. Since the beginning of the year, the stock has jumped more than 700%, far outpacing other stem cell companies. Shares may have rallied due to a recent announcement that the company and its collaborators presented favorable data on its platform technology’s ability to treat diseases of the eye, or news that the company is bringing its financial information up to date in order to relist on the Bulletin Board. Shares ended the week at $0.25, up 5 cents.
ImmunoCellular Therapeutics (OTCBB: IMUC), a clinical-stage company that is developing immune based therapies for the treatment of brain and other cancers, has signed an agreement with Formatech, Inc. for the manufacture of IMUC’s lead product candidate, ICT-121, a cancer stem cell vaccine that has the potential to treat several different types of cancers. Formatech will manufacture ICT-121 for the upcoming Phase I clinical trial of ICT-121 which will target glioblastoma, a highly lethal form of brain cancer, and is expected to begin early next year pending clearance by the FDA. ICT-121 has shown ability in preclinical studies to target and destroy cancer stem cells present in brain tumors; the company has high hopes for its potential to someday offer patients a safer and more effective treatment alternative than the current standard of care. Shares gained three cents on the week to close at $0.43.
Drinks Americas Holdings (OTCBB: DKAM), a company that develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned iconic celebrities, announced last week that it has completed a private placement resulting in the immediate funding of $375,000 in cash for the company with deferred advances aggregating $2,625,000. The debt was structured as a $4 million non-interest bearing debenture with a 25% original issue discount, which, if it reaches maturity, equates to an effective annual interest rate of approximately 8% per annum according to the company. In addition, DKAM issued warrants to purchase 2.5 million shares of the company’s common stock at an exercise price of $0.35 per share. The transaction will provide DKAM with an immediate and near term cash infusion which will enhance cash flow and enable expansion of their growing product offerings, including the impending release of their Kid Rock branded beer. This successful financing should serve as a key strategic catalyst for DKAM as the difficult capital market environment over the past year has significantly inhibited the company’s ability to distribute their award winning line of premium spirits. With the impending launch of their Kid Rock American Badass branded beer -which is projected to be an overwhelming success in middle America- and this latest successful capital raise, DKAM could be in position to grow revenue. Shares lost a penny on the week to close at $0.14.
Cord Blood America, Inc. (OTCBB: CBAI), an umbilical cord blood stem cell preservation company focused on bringing the life saving potential of stem cells to families nationwide and internationally, announced last week that it has signed a marketing agreement that will expand its services into Panama, Bermuda and Aruba. This latest expansion follows news earlier this month that CBAI has expanded its sales operations into the European Union. The company plans to target its marketing efforts towards hospitals and obstetricians/gynecologists in those areas, where the life saving potential of their cord blood storage technology will be most fully appreciated. Cord Blood will be the first to offer stem cell storage services in Aruba and Bermuda and the second to offer them in Panama. CBAI has chosen high income markets for its expansion; Bermuda had the world’s highest per capita GDP until recently, while Aruba is also extremely affluent and Panama has become an international business center in Central America with a rapidly growing economy and the highest per capita consumer spending in the region. The company expects that its expansion efforts into these well to do markets will encourage higher sales as parents who have the means to provide for their children’s future well being will take advantage of the unique opportunity afforded them by CBAI’s storage technology. Shares remained unchanged at less than a penny on the week.
Carbonics Capital Corporation (OTCBB: CICS), a company that provides applied engineering and technology transfer services based on clean technology and process innovations that enhance manufacturing efficiencies, improve resource utilization and minimize waste, has appointed Paul T. Miller, Ph.D. to the position of president and chief executive officer. Dr. Miller was the founder and president of Sustainable Systems, an oilseed processing facility specializing in the production of high oleic vegetable oils for food applications, and has extensive hands on experience in understanding the challenges faced by early stage development projects and companies including diverse experience in finance, sales, marketing, product development and operations. CICS plans to focus on technological development and services that decarbonize and increase efficiency within industry and commerce. Carbonics’ first project involves its planned acquisition of the Sustainable Systems oilseed crush facility in Culbertson, Montana from GreenShift Corporation (OTCBB: GERS), and the restructuring and repositioning of this facility as a strategic location for the processing of carbon-neutral second generation feedstocks for biofuel applications. Shares remained unchanged at less than a penny on the week.
On the Wires: i2Telecom (OTCBB: ITUI), a leading developer of award-winning patented and innovative high-quality mobile applications and services, has appointed David Schafer Senior Vice President of Worldwide Sales for i2Telecom International, Inc. and its subsidiary companies. Mr. Schafer’s role at i2Telecom will be to develop and guide all sales-related activities worldwide which will include channel creation and management as well as organization and oversight of the company’s sales team.