Knobias Clip Report (12-6-2007)

Submitted By Knobias ClipReport

KKD: New Operational and International Strategy Results in Earnings Surprise

Thursday’s session revolved around President Bush’s speech regarding a 5 year interest rate freeze on subprime loans with distinct characteristics to thwart many that are at risk of foreclosure. The decision is one that will bring increased debate about morals and the bailing out of some who should have never been able to afford homes originally without the adjustable rate mortgages. The President and Secretary Paulson noted that the freeze will stave off foreclosures which would cause increased loss of value from investors and homeowners alike. Either way, the government is trying to do something, which is commendable and should boost market confidence, but the moral dilemma will continue as will debates about government intervention into private industry.

While the government attempts to turnaround the mortgage and lending problems, another small cap name saw increased attention due to their turnaround.

Krispy Kreme Doughnuts, Inc. (KKD) announced their third quarter results on Thursday. The Company reported revenues decreased 11.7% to $103.4 million compared to $117.1 million in the third quarter of last year. Company Stores revenues decreased 11.3% to $72.8 million, while Franchise revenues were flat at $5.7 million and KK Supply Chain revenues decreased 15.1% to $24.9 million.

But more importantly, the Company reported net loss for the third quarter of $798,000, or $0.01 per diluted share, compared to a net loss of $7.2 million, or $0.12 per diluted share, in the comparable period last year. The Company continues to streamline their operations and close down underperforming locations. They also are implementing their spoke and hub strategy which saw 20 new satellites open during the quarter, continued reduction in general and administrative expenses, and reduced supply chain costs by outsourcing their coffee supply.

What was also interesting was their international numbers. Krispy Kreme has increased their international franchisee sales increase by 48% year over year. While the American movement to lose weight and ward off weight related diseases, the movement isn’t happening in other nations, especially in the Asian countries.

"As we look past the third quarter, we continue to focus on improving Company shop performance, driving the hub and spoke model, growing our international franchise business, refranchising certain domestic markets and reducing costs to help offset rising commodity prices," said Daryl Brewster, the Company's President and Chief Executive Officer, in the earnings release.

Following the news, shares gained some 27% on 4.45 million shares traded. With the Company continuing their international expansion as well as contracting domestically, more profitably locations could become the result. With that in mind, investors would be wise to watch.



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Knobias Clip Report (12-5-2007)

Submitted By Knobias ClipReport

Aftermarket News Has 3 Names on the Move

Wednesday’s session saw the indices rally on the back of jobs data which was reported higher than analyst estimates. The job growth displayed numbers which were in stark contrast of any expectation of recession. Even so, fear and anxiety remained with continued subprime talk on the horizon. Headlines were reporting that the Bush administration was proposing a 5 year interest rate freeze on owner occupied subprime mortgages. Large investment firms were also reporting the receipt of subpoenas to testify before congress on the selling of these risky debt securities. The fear and anxiety were still expected to be enough to tip the scales in favor of a cut in the interest rates by the Fed next week.

But the real news came post-market on Bidz.com Inc. (BIDZ), Hoku Scientific (HOKU) and Novastar Financial (NFI).

BIDZ has been battling a negative mention by Citron Research which was published last week. The Company refuted the allegations made by Citron in a conference call that did more harm than good to the share price. Following the report and call, shares were effectively been cut in half.

But it still didn’t dissuade analysts from coming to its defense. Roth, Think Equity, and Craig-Hallum all maintained a Buy rating in their reports and noted the weakness as entry opportunities. Roth even commended the Company in its attempt to address the negative report after shares dropped some $2.50 during the call.

Prior to the Citron report, BIDZ had issued guidance on November 27th of $180 million to $182 million in revenue for the 2007 fiscal year. Fourth quarter revenue was expected at $56 million to $58 million. The reason for the raised guidance was noted as the record Thanksgiving holiday weekend which saw a substantial jump. 2008 revenue guidance was also released which noted expectations for $225 million to $230 million in revenue and 47c to 51c in earnings per share.

In aftermarket action on Wednesday, the Company updated their guidance. In a little more than a week, the Company noted that it now expected revenue for the year to be at the higher end of their $180 million to $182 million view. Pretax income for the year was guided for $18 million to $18.5 million. Pretax income for the fourth quarter was expected to be $5.6 million to $6 million on $56 million to $58 million.

Not much changed except the Company’s expectation of 2007 revenue coming in at the higher end of their range. That and the fact that televisions (one of the questions brought up in the conference call regarding shill bidding) are no longer available on the site. Aftermarket trading saw shares hit highs in the $13.00 range before falling back down to closing levels.

Hoku Scientific, a clean energy technology company, which has been gathering extravagant amounts of prepayment contracts for polysilicon in hopes of gathering enough to construct a plant in Idaho, announced that the Company had signed a non binding term sheet with Merrill Lynch for $185 million in financing to facilitate the cost of construction. Following the announcement, shares jumped to the $10.40 range after closing at $9.80.

Novastar Financial Inc. (NFI) shares, which had been on many trader’s screens following their recent activity, saw another boost following the subprime mortgage lender’s waiver acceptance by Wachovia. At issue was the Company’s adjusted tangible net worth which had fallen below the convent levels. The Company originally broke the covenant on September 30th, but received a waiver until November 30th. The Company now announced that Wachovia has until Dec. 7th, this Friday. The first waiver was for 2 months. The second is now only 7 days which could signify Wachovia is running short on patience. Even so, shares were up some 30% in after market trade.

Wednesday’s aftermarket session saw a plethora of exciting, market affecting news cause some large swings in after hour trading. If the action continues to Thursday’s session, investors would certainly be wise to watch.



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Knobias Clip Report (12-4-2007)

Submitted By Knobias ClipReport

Solar Sees Increased Attention on Energy Bill

Tuesday’s session saw continued talk of Fed rate cuts, financials seeing increased selling pressure, speculation regarding gaming consolidation, and solar names on the rise again. This alternate energy sector saw a barrage of news from many located in the China market which spilled over into a sympathy related rally for the whole space.

Solarfun Power Holding Company Limited (SOLF) began the rally when shares gained over 39% following news that the Company had reached an agreement with Good Energies Inc., a renewable energy investor, to sell some 66.7 million ordinary shares and 281,011 American Depository Shares to the investor. Included in the investment were almost 50% of the shares held by SOLF’s chairman and CEO, Yonghua Lu. It was noted that Lu would retain a 16.1% stake in the Company. The deal effectively raises Good Energies’ holdings to 34.7% from only 6.3% of the Company before the deal. It also will allow Good Energies to have additional control of the board of directors.

The deal left some investors worrying about the CEO’s faith in the Company. There aren’t many instances of CEO’s liquidating 50% of their holdings. Even rarer was the security gaining over 40%.

Canadian Solar Inc. (CSIQ) also was in on the action as speculation circulated of a potential partnership circulated the floors. The Company has been highlighted a few times with their growing top line and more recently by raising $75 million in a 144A private placement. Shares gained some 17% on the day with over 5 million shares traded.

LDK Solar Co Ltd (LDK) shares saw a 31% increase on Tuesday. The Company had become embattled in an inventory disagreement with a former employee. Shares had seen their price fall from highs of over $75 in late September to lows in the $26 area in late November. On November 15th the Company announced guidance for sales of $165 to $170 million. Earnings were expected to be between 37c and 41c.

No official news had been reported over the past few days but a story circulated that noted the Company had raised some $700 million in debt and had retained all of their customers throughout the inventory discrepancy. The Company earlier had noted that the investigation into inventories reporting had continued. They were expected to announce their findings in early December. With that on the horizon, the shares could see additional attention.

Also contributing to the heightened attention to the sector was the proposed energy bill. The legislation was seen as a negative catalyst last month as news that the Democrats were proposing a stripping out of alternative energy tax cuts to gain favor of the Republicans to override any presidential veto. With the bill possibly being on the agenda in the coming days, investors would certainly be wise to watch many in the solar area.




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Knobias Clip Report (12-3-2007)

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Cohesant Soars after Graco Agrees to Acquire Its GlasCraft Subsidiary

Cohesant Technologies (NASDAQ: COHT) announced on Monday that it has entered into a definitive agreement pursuant to which Graco Inc. (NYSE: GGG) will acquire the Company's GlasCraft Inc. subsidiary. The total transaction value is $35 million including indebtedness assumed by Graco at the closing and transaction expenses.

Graco is expected to acquire Cohesant's outstanding shares for $9.05 - 9.55 per share in cash following a spinoff of all of the Company's non-GlasCraft Operations. The acquisition is expected to be completed in the first quarter of 2008.

Shares of Cohesant soared on the news, reaching a high of $9.30, gaining almost 60% over the previous day's close. Graco shares were trading flat after the announcement.

Cohesant recently consolidated all of its non-GlasCraft operations under the umbrella of its CIPAR subsidiary. As part of the sale of GlasCraft, the Company will spin-off its CIPAR subsidiary by declaring a taxable dividend of one share of CIPAR for each share of Cohesant common stock outstanding. The Company has received an opinion that CIPAR will be valued at $6.6 million at the time of the spin-off. The resulting company will be quoted on the over-the-counter market and be known as Cohesant Inc.

Morris Wheeler, the Company's CEO, stated in a press release, "This transaction is a classic win-win scenario. The transaction allows Cohesant to focus its resources on its infrastructure protection and renewal businesses and provides a significant immediate cash return to its shareholders. The $9.05 minimum cash merger consideration represents a significant premium over the 30-day volume weighted price of Cohesant Technologies shares. In addition, Cohesant shareholders will retain the upside of the infrastructure rehabilitation businesses, including the full line of CuraFlo and Raven products and services."

Graco CEO Patrick McHale added in a separate release, "GlasCraft is a well respected company [Graco] has been interested in acquiring for several years. [GlasCraft] has approximately 70 employees and annual sales of approximately $18 million. [GlasCraft] is recognized for its presence in the global composites market as well as the polyurethane foam and polyurea coatings markets. GlasCraft's products, brands and engineering capabilities highly complement Graco's core businesses, creating an opportunity to leverage each company's unique strengths and create future sales and net earnings growth."

GlasCraft manufactures and sells solutions for both the open and closed-mold segments of the Composites manufacturing industry. GlasCraft also designs, manufactures and sells high performance dispense systems for the polyurethane foam and polyurea coatings industries. Graco Inc. supplies technology and expertise for the management of fluids in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and spray fluid materials.



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Knobias Clip Report (11-30-2007)

Submitted By Knobias ClipReport

Alternate Energy Names Get Another Drink From the Well

Friday’s session saw the Dow try to extend a two day rally into three as many of the financials gained while tech names fell, basically swapping places from the past few weeks. Dell shares led the way down as earnings were lighter than analyst estimates. On the commodity side, crude slipped again as speculation OPEC would increase production circulated the floors while the dollar index climbed.

In the small cap space, alternate energy names were in the news again following their recent rallies. Two of the names raised money through private placements, diluting shareholders but at the same time, raising money at ideal times to sustain their growth and implement their plans.

Canadian Solar Inc. (CSIQ) announced that it plans to make a private offer, subject to market conditions and other factors, of approximately $75 million of its convertible senior notes due 2017. Canadian Solar intends to grant the initial purchaser of the notes an option to purchase up to an additional US$11.25 million in aggregate principal amount of the notes to cover overallotments. The notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. The notes and Canadian Solar's common shares issuable upon conversion of the notes have not been registered yet.

The Company anticipated using the net proceeds from the offering for working capital, general corporate purposes and potential future acquisitions. The announcement comes after a two month rally in the shares that have seen prices spike from $10 to highs in the $18 area before Friday’s close of $15.84. Over a 50% rally will then be followed up with a potentially dilutive financing.

Altair Nanotechnologies Inc. (ALTI) announced the completion of a $40 million private placement of its common stock to Al Yousuf LLC. Under the purchase agreement, Altairnano has agreed to issue an aggregate of 11,428,572 shares of common stock to Al Yousuf LLC at a purchase price of $3.50 per share. The shares will be contractually restricted from resale for at least two years, with one-third of the shares being released from this restriction on the second, third and fourth anniversaries respectively.

The proceeds were noted as being used to support manufacturing growth, working capital and general corporate purposes. The deal comes after shares have experienced a rally over the past two months from the $3 area to highs in the $5 to Friday’s close of $4.05.

Al Yousuf is a leading commercial group in the United Arab Emirates. It’s becoming somewhat apparent that the Middle East is an area that domestic companies are turning to for financing with Citigroup’s recent transaction with Abu Dhabi’s sovereign fund.

In any event, many alternate energy names have seen increased attention over the past few months which put them in excellent shape to raise funds at attractive levels. With many in the same boat, this trend could continue which investors would be wise to watch.




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Knobias Clip Report (11-27-2007)

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UFPT: Specialty Packaging Is Becoming Big Business

Wednesday’s session saw the bulls out in full force as the Dow’s two day run has added back some 500 points back to the index in the face of weak economic data. Some pegged the rally as a short covering while others noted the fall in oil and in the increase in energy inventories as the cause. Either way, there wasn’t much good news minus the energy inventory report and depending on which theory subscribed: another possibility of Fed interest rate cut.

The possibility of the cut had analysts on each side of the fence clamoring and debating on which course of action would be wiser. One side pointed out the rising LIBOR rate and the fact that rate cuts aren’t helping the problem; hence they should be halted for fear of increased inflation in the long term. The other side noted the market’s two day rally which was in response to an increasing possibility of a rate cut, and the fact that additional cuts could continue to ease the credit problems.

Either way, the Dow saw a 300 point rally on the day with cheaper oil, gold, and all 30 stocks on the index seeing gains.

In the small cap space, the Bidz.com drama continued with many analysts coming out in its defense noting that the questions it had regarding inventory and cash levels had been answered. Citron responded with its second report highlighting many instances of what it termed as fake bidding by insider’s or somebody with a stake in the company. The culmination was another down day for the name as shares lost another 15% on 11.5 million shares traded.

Another company that might warrant another look in the small cap space could be UFP Technolgies Inc. (UFPT). The Company is a leading designer and manufacturer of interior protective packaging solutions using molded fiber, vacuum-formed plastics, and molded and fabricated foam plastics. The Company also designs and manufactures engineered component solutions using laminating, molding, and fabricating technologies. The Company primarily serves the automotive, computers and electronics, medical, aerospace and defense, consumer, and industrial markets.

Specialty packaging is a big business and has been growing for some time now. The Company recently released their third quarter numbers which solidified that thought.

Sales for the quarter were $22.9 million or 5.5% higher than 2006 third quarter sales of $21.7 million. Net income was reported at $883,000 or $0.15 per diluted common share outstanding for the third quarter which was more than double the Company's net income of $396,000 or $0.07 per diluted common share outstanding for the third quarter of 2006. Add to it that the Company’s cash level was $5.5 million with declining debt and one can easily see that the balance sheet is beginning to show signs of some possible leveraging. And that may be what the Company does in the coming months.

Noted R. Jeffrey Bailly, Chairman, CEO, and President in the Company’s earnings release, “This (strengthening balance sheet) gives us a solid platform to grow through acquisition, invest in new technologies, and develop new products. All these factors make us very optimistic about the future of UFP Technologies.”

If the Company meets analyst expectations for the year of 57c, their price to earnings ratio comes in at nearly 11. With an expectation of 74c next year from analysts, the Company is trading at only a forward price to earnings ratio of 8.45. With these types of P/E’s, investors would be wise to watch.



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Knobias Clip Report (11-27-2007)

Submitted By Knobias ClipReport

BIDZ: Diamonds Maybe Aren't Forever

Tuesday’s session saw investors cheer for the first time in a while as the market rallied on the heels of a major cash influx for Citigroup from an Abu Dhabi investment firm. The move gave many a warm and fuzzy feeling for investors in the financial group and extended to the overall market. Bears still warned that the largest dollar gainer on the Dow was Altria Group which has long been grouped into the defensive play category. Never the less, Bulls were abound as all three indices gained on the day.

In the small cap space, one name was under increased scrutiny following a report by the internet blog Citron Research. The site, formerly known as StockLemon.com, has been known as having short positions in stocks it highlights and has amassed a fairly accurate and profitable track record.

In its latest post on November 26th, the operator names Bidz.com (BIDZ) as a suspicious company that warrants increased due diligence before investing. The Company is an online auctioneer of jewelry. Bidz offers its products through a live auction format requiring only a $1 minimum opening bid. The auctions are unlike any others on the Web with starting bids at $1 and have an extended auction time that resets if bids are placed during the last 15 seconds.

On Tuesday, the Company reaffirmed its outlook following sales over the Thanksgiving holiday weekend which was noted as being 78% higher compared to last year’s holiday weekend. Guidance for the fourth quarter was projected to be in the $56-$58 million range and expectations were for pre-tax income of $5.6-$6 million. For the year, expectations were for $180-$182 million with gross margins of 27-28% and pre-tax income of $18-$18.5 million. Analysts were expecting revenue for the fourth quarter of $57 million, 2007 revenue of $181 million

2008 full year revenue guidance was to be in the range of $225-$230 million, pre-tax income of approximately $23.5-$25.5 million and gross margin of approximately 27-28%. Earnings per share for the year were expected to be in the 47 cents to 51 cents a share range. Analysts expect a fiscal 2008 profit of 50 cents a share and revenue of $230 million.

In Citron’s report, the appreciation in the stock was due to the sympathy type buying action which caused a name like Medifast to grow in market capitalization because of the growth in Nutrisystems. Citron contended that Blue Nile is the names causing the sympathy players to pile into BIDZ.

Citron also noted that the Company’s inventory numbers are somewhat alarming when comparing to other online liquidators. Cash balances were also something investors should focus on when comparing this name to others such as Overstock.com and Blue Nile. Finally, Citron points to some related party transactions, which in fundamental analysis causes many red flags to appear because of their disingenuous nature. The related party transactions are with a fairly large shareholder who also happens to be BIDZ’s largest creditor and also a convicted felon according to Citron.

Following the report, shares plunged from over $22 on Monday to close at $11.89 on Tuesday, almost cutting the market cap in half. In response, the Company called a conference call after the close to discuss with investors what it labeled as “innuendo and inaccurate information” about the Company.

In the conference call, the Company said that they felt obligated to respond to the report and noted that inventory and cash levels don’t necessarily compare to Blue Nile and Overstock since they have different business models. With inventory, the Company noted that the increase had to happen to increase revenues. On cash, the Company noted a large line of credit to fall back on if cash was needed.

On the CEO’s salary payment, Citron alluded to the Company paying 30,000 shares a month to its top executive. But the Company noted that the selling of the stock was due to a 10b5 trading plan. The Company noted that since that time, it reduced the plan from 30,000 a month to only 10,000 a month.

On Citron’s alluding to the Better Business Bureau’s rating of F due to poor customer service, the Company noted that it was true and that the growth in the business from the early years outgrew their ability to offer quality service. But they noted that since that time, only 7 total complaints were still unresolved.

In the question and answer session, management took a barrage of questions from analysts who questioned everything from the presence of televisions on the site to the ‘shill bidding’ accusations. Overall, management attempted to defend each and every aspect which is commendable, but in reality might have only opened the door even further to scrutiny and speculation as the stock dropped another $2.50 in after hours trade. With Citron Research expecting to release additional information in a follow-up report, the name is certainly loaded with shorts and will certainly be a closely followed name over the coming days. Investors would be wise to watch.



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Knobias Clip Report (11-26-2007)

Submitted By Knobias ClipReport

Solar Names See Increased Attention

Monday’s session saw the Dow turn from green to red, dismissing the holiday cheer and initial reports from retailers following Black Friday. Initial reports had the number of shoppers increasing some 5% but also had average tickets decreasing by the same amount. The reports had many selling retailers into the initial rally following the open.

In the small cap space, alternate energy names highlighted many traders’ screens as being one of the only ways besides shorting to earn quick gains.

A new line of thought regarding the long term prospects of the solar area, a couple of news reports from some of the names, and a change in the overall environment had many looking at the percentage of their portfolio solar names occupy.

The line of thought regarding solar has many believing a supply increase in the number of solar panels will increase at a faster pace than demand. The theory could be conceivably true since the number of companies in the alternate energy space have increased exponentially over the past year. The ensuing fall out will be a land grab and market share fight based on price. Names with larger budgets for R&D that can offer new products and names with larger cash positions that can weather the storm for the years of over-supply will be the winners in the space. It was noted that some 88% of solars expected a price decrease in the coming years on products while margins were to remain somewhat unaffected as bulk buying and producing began to take place, thereby decreasing costs. The remaining 12% were expected to increase prices.

The fact is, the simple law of competition displays that many competitors enter the market following the initial entry by a few with positive returns on capital. What follows is barrage of new entrants and a market share fight based on either price or service where margins are depressed and the weak are eliminated. This will inevitably happen and one would be wise to find the names that can weather the storm through sustainment through times of depressed net incomes or new and improved products.

Also worthy of note in the solar area was the replacing of John Howard as Australia’s Prime Minister. His replacement, Kevin Rudd, has been considered extremely friendly towards the environment and much more so compared to his predecessor. The fallout could be increased tax initiatives which would definitely increase the demand in the country. The name that could possibly benefit would be Suntech Power Holdings Corp Limited (STP). The CEO of the Company, Dr. Zhengrong Shi, has had extensive research and business experience on the continent country. The Company already has a presence there but noted in a third quarter conference call that if the environment changed favorably, they would certainly consider expanding their operations there.

Also in the smaller cap solar space, Hoku Scientific Inc. (HOKU) announced entry into a supply agreement with Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (SOLF), for the sale and delivery of polysilicon over an eight-year period beginning in July 2009 for up to total cash consideration of $309 million.

In the agreement, SOLF agreed to pay HOKU $1 million upfront and also and is required to pay an additional cash deposit of $9 million on or before December 28, 2007, as a prepayment for future product deliveries, and requires that SOLF pay HOKU an additional $45 million in increments of $20 million, $20 million, and $5 million on or before September 30, 2008, March 31, 2009, and March 31, 2010.

The contract is one of a few that HOKU has announced with prepayment options over the past year. These prepayments serve to help the Company finance their new facility in which the polysilicon would be produced in Idaho. The Company has yet to produce any polysilicon though since their facility has yet to be built and with a harsh winter in Idaho, it wasn’t immediately known if their construction milestones were expected to be met that ensure other prepayments from earlier contracts. Shares still rose by 38% on over 8.5 million.

In any event, with the solar industry still waiting for a domestic alternate energy bill, as well as many of the names announcing new contracts, new facilities, and increased top and bottom lines, the sector is certainly one to follow. Investors would be wise to watch.



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Knobias Clip Report (11-20-2007)

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AeroVironment Receives $19.3M in Orders from U.S. Marine Corps

AeroVironment, Inc. (NASDAQ: AVAV) announced on Tuesday that the U.S. Marine Corps has ordered $19.3 million in BATMAV (Battlefield Air Targeting Micro Air Vehicle) systems, each consisting of two Wasp III micro air vehicles, AeroVironment’s Battery Charger, spares and support services.

The Company designs, develops, produces, and supports an advanced portfolio of Unmanned Aircraft Systems (UAS) and efficient electric energy systems.

Tuesday’s announcement is in addition to contracts awarded in September from the United States Special Operations Command and Danish Army Operational Command to deliver UAS. Combined with these other orders, total value of UAS contracts has reached $78.7 million in recent months, with a potential of approximately $129.3 million.

The order followed a successful Marine Corps evaluation of Wasp systems provided by the Defense Advanced Research Projects Agency (DARPA). The Marine Corps is obtaining the BATMAV systems through the Air Force BATMAV contract, which was awarded to AeroVironment in December 2006, and plans to issue Wasp III systems at the platoon level.

According to the Company’s website, the Wasp III Micro Air Vehicle (MAV) is a small, portable, reliable, and rugged unmanned aerial platform designed for front-line day/night reconnaissance and surveillance. Wasp is the result of a multi-year joint development effort between AeroVironment and DARPA.

With a wingspan of 72 cm and a weight of 430 grams, the Wasp is the Company’s smallest Unmanned Aircraft System. Wasp can be manually operated or programmed for GPS-based autonomous navigation, and carries integrated Forward and Side Look EO Cameras. Able to fly as high as 1,000 feet above ground level, it has a range of 5 km line-of-sight. Wasp can reach speeds of 65 km/h, and has a battery life of up to 45 minutes.

U.S. Marine Corps Major James Roudebush, Tier I UAV Program Manager, PMA-263, noted in the press release, "The small size and light weight of Wasp makes it ideally suited for deployment directly to platoons, where flexibility, portability and reliability are critically important. We have been evaluating Wasp for some time, and believe that it offers a unique new capability to support our Marines' missions around the world.”

In addition to its Military relationship, AeroVironment offers a variety of products and services to civilian markets as well. Last month, in conjunction with Altair Nanotechnologies Inc. (Nasdaq: ALTI), Micro-Vett, SPA and Go Green Holding AS, the Company announced successful public demonstrations of the all-electric Fiat Doblo to government officials and potential commercial customers in Oslo, Norway. The Doblo is designed both as a commercial medium-duty transport vehicle, as well as a regular size family car. With battery packs from Altairnano, the fast-charge infrastructure is provided by AeroVironment.

And in October, the Company announced the installation of its Architectural Wind system on the roof of a manufacturing facility in Salem, Oregon. The project included 18 wind turbines, and assuming normal wind conditions, was projected to generate approximately 28,000 kilowatt hours of power each year.

AeroVironment has reported TTM revenues of $191.4 million, EBITDA of $27.7 million, $1.26 in diluted EPS, and a net margin of 9.56%. The Company recently reaffirmed guidance for fiscal year 2008 of 20% to 25% revenue growth over fiscal year 2007 and 12% to 14% operating margin.



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Knobias Clip Report (11-19-2007)

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HRZ: Cuts Fourth Quarter and 2007 Guidance; Announces $50M Buyback

Monday’s session saw the overall market dive heading into one of the largest shopping days of the year. The annual Black Friday title reserved for the day following Thanksgiving has many market onlookers trepid after the last few months of hits the American consumer has taken.

With oil prices still hovering at record highs, the day may be the beginning of a pitiful holiday buying season if the status quo holds. Consumers who’ve already seen their home prices fall, the buying power in their dollars slip, and the budget reserved for energy expenses increase, will now be saddled with the task of scrounging every penny they own to spend in hopes the culmination will satisfy the analysts’ estimates for the national retailers? The daunting chore may be too much for the consumer to handle.

Oil is beginning to take hold many of the logistics names as well with one in particular reporting some downward revised guidance.

Horizon Lines, Inc. (HRZ) is the nation's leading domestic ocean shipping and integrated logistics company comprised of two primary operating subsidiaries. Horizon Lines, LLC operates a fleet of 21 U.S.-flag containerships and 5 port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico.

On Monday, the Company reported revised guidance that had many preparing for the worst. The Company now expects for the fourth quarter of 2007, operating revenue of $310 - $315 million, earnings before interest expense, net, taxes, depreciation and amortization (EBITDA) of $35 - $38 million, and diluted earnings per share (EPS) of $.28 - $.35. Previous fourth quarter 2007 guidance included operating revenue of $300 - $310 million, EBITDA of $43 - $48 million, and diluted EPS of $.53 - $.65.

The Company also updated its financial guidance for the full year 2007, with projections of operating revenue of $1,200 - $1,205 million, EBITDA of $160 - $163 million, diluted EPS of $1.31 - $1.38 and free cash flow of $19 - $22 million. Prior full year 2007 guidance projected operating revenue of $1,190 - $1,200 million, EBITDA of $168 - $173 million, diluted EPS of $1.56 - $1.68, and free cash flow of $27 - $31 million.

Noted as the reason for the cut guidance was the surging cost in oil which has caused bunker fuel to soar over $55 per ton or 12% from $445 per ton on October 26th to $500 per ton. Also contributing was the Company’s inability to recover the impact of higher fuel charges with their surcharge recovery program.

But the Company did paint a somewhat rosy picture for 2008. Based on current market conditions and forecasts, the Company projects full year 2008 operating revenue of $1,360 - $1,380 million, EBITDA of $175 - $185 million, diluted EPS of $1.94 - $2.18 and free cash flow of $115 - $125 million. At the mid-ranges of the EPS guidance, 2008 results are projected to be up 53% from 2007 numbers.

The Company also announced a $50 million share buyback program in which managment noted they would make purchases from time to time as market conditions warrant.

In any event, shares of the Company were down over 5.5% on the day, continuing a trend that has seen the name fall from highs in the $33 range to Monday’s rang of $22.50. With any continuation in share depreciation, the name could become somewhat cheap with a forward price to earnings ratio in the 14 area if 2008 guidance is accurate and oil price spikes subside. With that in mind, investors would be wise to watch.



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Knobias Clip Report (11-16-2007)

Submitted By Knobias ClipReport

NASV: Attempting to Automate Profits in 2008

Automation is becoming an integral part in today’s world. As the cost of producing products by hand increases, machines are constantly being found as viable replacements for labor intensive tasks and mundane jobs.

The growth has already taken place in many industries from mail sorting to automobile production. The ability of companies to work 24/7 without breaks at a lower cost per unit has caused demand in automation to soar over the past decade.

The use of automation is now seeing its spectrum broadened and applied to many other tasks that have historically been reserved for lower wage, lower skilled employees.

One company in the industry that is attempting to garner some of this $400 billion industry is National Automation Services, Inc. (NASV). The Company is building a strong network of automation and controls companies through key acquisitions in every major city such as Las Vegas, San Diego, Los Angeles, San Francisco, Phoenix, Denver, Dallas, Chicago, Miami, New York, and Seattle. Through such synergistic acquisitions, NASV is able to capitalize on national contracts for such entities as Army Corp. of Engineers, TSA and major airlines among others.

An integrated company, with separate regional operations, allows large clients to deal with one organization for their automation control needs, while dealing with local operations in the fulfillment of those contracts. Furthermore, the cost synergies derived through the elimination of duplicate administrative, accounting and back office functions, allows the consolidated organization to achieve higher profit margins than if each entity continued to operate separately.

The Company has been public for less than a month, yet has announced multiple contracts and an acquisition.

On October 25th, the Company announced that its Intuitive System Solutions Inc. subsidiary signed a contract with the Virgin Valley Water District in Mesquite, Nevada for $1.02M for certain specialized automation equipment and services. On November 1st, NASV reported that its subsidiary had procured a $260,000 contract with a 35% margin for an expansion and automation of the baggage handling for a major national airline at McCarren International Airport in Las Vegas. On November 6th, the subsidiary announced a $42,000 contract with a 60% margin for an upgrade of 42 RTU stations for the Las Vegas Valley Water District. On November 15th, the Company announced another contract at the McCarren International Airport but this time for $107,897 with a 35% margin for Southwest Airlines. The contract was for an upgrade to the Southwest Airline Node 8 Control room. The Company also noted that it was awaiting award of an automation project from the Southwest Water Reclamation Facility, which would be valued at $1,300,000.

During this time the Company announced the acquisition of Intecon Controls located in Phoenix, Arizona for a combination of cash and restricted stock worth $1,750,000. Intecon was noted as specializing in engineered controls, UL certified panel facility and systems integration.

In each of the press releases announcing these contracts, the Company also submits guidance which projects them achieving gross revenues in 2007 of $4,544,094, with a net pre-tax income of $1,781,688.

Through an acquisition strategy that encompasses a minimum of one major acquisition per quarter, as well as through internal growth of ISS, due to its recently granted increase in licensing capacity to $2 million per project, the Company should also increase gross revenues to $25,780,972 in 2008, with net pre-tax income of $16,190,755. With a total of 40 million shares outstanding the management of the Company projects earnings per share of $0.03 in 2007 and $0.27 in 2008.

In any event, with the growing numbers both top and bottom line and with the Company being in a growing market, it merits mention as a name to follow over the coming months. Investors would be wise to watch.



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Knobias Clip Report (11-15-2007)

Submitted By Knobias ClipReport

Canadian Solar Guides Above Estimates

Nov 14, 2007 (EarningsWhispers Guidance Summaries via Comtex) -- Canadian Solar (NASDAQ: CSIQ) said it expects fourth quarter revenue of $110.0 million to $120.0 million and 2008 revenue of $650.0 million to $750.0 million. The current consensus estimate is revenue of $101.9 million for the quarter ending December 31, 2007 and revenue of $497.6 million for the year ending December 31, 2008.

This earnings guidance summary was provided by EarningsWhispers, a leading provider of earnings expectations - including corporate guidance announcements and analysts' expectations that differ from published estimates. http://www.earningswhispers.com



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Knobias Clip Report (11-14-2007)

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SHPI: CEO Optimistic About Continued Growth Prospects

Specialized Health Product International (SHPI) has been the recipent of two recent awards. It was ranked Number 228 on Deloitte's 2007 Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America. It was also ranked Number 30 on MountainWest Capital Network's 2007 Utah 100 List of Fastest Growing Companies. The Utah 100 list is based on revenue growth over the last five years.

Specialized Health Products' President and CEO, Jeff Soinski, credits the Company's rapid pace of new safety needle product introductions and the success of its manufactured product lines with the company's 714% revenue growth over the past five years.

The Company designs, develops, manufactures, and markets proprietary disposable medical devices for clinician and patient safety. Their innovative safety devices are designed to maximize the efficiency and quality of healthcare, while minimizing the risk of accidental needlesticks, which are a leading occupational cause of the spread of blood-borne diseases such as HIV/AIDS and the hepatitis B and C viruses. The Company manufactures and market certain products, including three of the leading brands in the safety Huber needle market, under its own label. It licenses or supplies other products on an OEM basis to leading manufacturers and marketers in the global disposable medical products industry, including Tyco Healthcare, a subsidiary of Covidien Ltd., Bard Access Systems, and BD Medical. Product royalty income is generated from proprietary products subject to license agreements with larger corporate partners, including Tyco Healthcare, BD Medical, and TAP Pharmaceutical Products Inc. In each case, these products are manufactured and sold by licensing partners, and SHPI receives on-going royalty payments on product sales.

Mr. Soinski told Knobias on Wednesday, "To date, other areas of the world have been slower to adopt the safety medical needle mandates now adopted and enforced in the U.S. However, the danger of needlestick infection knows no national boundaries. Demand for safety products in certain medical needle categories is growing as certain countries in Europe and the rest of the world pass legislation of their own, including Germany, France, Italy, Australia, and Canada, and as unions become more active in requiring stronger measures to protect healthcare workers from accidental needlestick injuries. We anticipate that our products will be among the very first safety Huber needles available broadly in Europe, giving us a potentially strong first-mover advantage. More broadly, we expect international sales to be an important growth driver in 2008."

"Huber needles are specifically designed to access surgically implanted, subcutaneous vascular ports in patients requiring vascular access frequently, for infusions of drugs or fluids or for blood sampling, over periods extending from six months to one year. A major cause of accidental needlestick injuries to healthcare workers from Huber needles is due to the "rebound effect" which occurs during needle withdrawal from the implanted port."

"Regarding competition, the leading suppliers of syringe needles and syringes with needles are BD and Kendall, both partners of SHPI. B. Braun Medical is a leader in Europe and Asia, while Terumo Medical Corporation is a leader in Japan and the Pacific Rim. Competitive suppliers of safety Huber needle products with an integral safety feature or mechanism include Smiths Medical, Bard Access Systems, AngioDynamics and B. Braun."

Mr. Soinski explained, "The advantages of our products are shown by our market success, especially in the Huber market niche. We believe our LiftLoc(R) and MiniLoc(R) Safety Infusion Sets and SafeStep(R) Huber Needle Set provide significant advantages versus competitive safety Huber needle products on the market, including safety, reliability and ease-of-use. Between our branded products and our OEM products, Specialized Health commands approximately 58% unit share of the Huber safety needle market and 39% of the overall market for this important specialty safety medical category."

"Approximately six billion needles are used in the U.S. healthcare industry each year, and U.S. healthcare workers suffer an estimated 800,000 needlestick and sharps injuries annually. Each year, an estimated 1,000 U.S. healthcare workers contract serious, potentially life-threatening infections from accidental needlestick and sharps injuries. Besides HIV/AIDS and Hepatitis B and C, diseases that can be acquired from such accidents include diphtheria, gonorrhea, typhus, herpes simplex virus, malaria, syphilis and tuberculosis. The Centers for Disease Control and Prevention estimate that approximately 80% of accidental needle sticks are preventable with the use of safety needle devices."

"The products that we produce make a significant impact on the global healthcare market. The U.S. market for disposable medical needles alone is estimated to be $1.5 billion and growing, with the addressable market for safety medical needle products estimated to be approximately $1.2 billion annually based on an 80% conversion rate to safety products. We have developed multiple safety needle products based upon a broad intellectual property portfolio that applies to virtually all medical needles used today. We manufacture and market three of the leading brands in the safety Huber needle market."

He added, "Our philosophy of business maximizes our potential. Our business model is to enter into licensing, OEM supply, or distribution agreements for our products, rather than engage in direct sales of products to end-users on our own. The OEM supply of products to corporate customers and the sale of our own branded products through distributors are our preferred business relationships for targeted specialty products that can be manufactured efficiently on semi-automated manufacturing lines without a large capital investment. Targeted specialty products typically represent lower-volume, higher-margin opportunities in niche markets. We pursue out-licensing arrangements for high-volume, typically lower-margin; product opportunities that would require a tremendous capital investment to develop high-speed automated manufacturing equipment or would require competition with dominant multinational companies."

Mr. Soinski concluded, "We are now structured for growth. Our board of directors and management is ready to build on the transition of our business model in recent years from an R&D company with limited development funding and license fee revenue to a predominantly market-driven manufacturer and marketer of proprietary safety medical products. Management is focused today on profitability and expanding our positive cash flow. For our company, cash is king. We are focused on growing cash reserves that we can generate internally, through operations, and then reinvest into strategic growth alternatives without taking on debt."

"We are optimistic about our continued growth prospects, as we put new growth initiatives in place for 2008. We also see potential opportunities to expand beyond safety needles into adjacent areas of technology related to healthcare worker and patient safety. Nearest at hand are opportunities in the disciplines of vascular access, oncology, interventional radiology and surgery. Elements of our growth strategy include capturing significant market share in targeted product segments, broadening existing product lines, developing new products, and seeking additional market opportunities through merger and acquisition activities."


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Knobias Clip Report (11-13-2007)

Submitted By Knobias ClipReport

CWRL: Web 3.0 Social Networking Site Garners Attention

The face of technology has seen a transformation to put it simply. Traditional tech giants such as IBM, Cisco, and Dell are still huge in the industry, but have seen their standings slip down the list when investors think of technology names. Google, Yahoo!, Microsoft and other software producers have become the bellwethers when one thinks about the industry.

It’s basically due to consumers being wired to the teeth. An average person is now armed with handhelds, gaming platforms, and computers with ten times the memory and power of what was used to put a man on the moon almost 40 years ago. It also helps that the three names are gobbling up smaller niche players in the space to add to their growing line of services and offerings. The amount of specialization and functionality provided is almost incredible when trying to grasp the wide spectrum of this market.

Social Networking has become the newest “buzz” in this industry over recent years. NewsCorp’s purchase of MySpace at the beginning had everyone wondering what Rupert Murdoch was thinking. But now with Microsoft’s recent acquisition of a 1.6% stake in Facebook for $240 million which puts Facebook’s total value in the $15 billion range, Murdoch’s purchase looks like a move that would bring a tear to Warren Buffet’s eye. But another Buffet, tear jerking investment opportunity in the space could still exist and its name is CornerWorld Corp (CWRL).

Most of these sites are still in the Web 2.0 phase. From Wikipedia (which is also categorized as a Web 2.0 site) the definition is a perceived second generation web-based community and hosting service which aims to facilitate collaboration and sharing between users.

The next obvious question is: What is and when is Web 3.0?

In May of 2007, Eric Schmidt, CEO of Google attempted to answer the question. “Web 2.0 is a marketing term, and I think you’ve just invented Web 3.0. But if I were to guess what Web 3.0 is, I would tell you that it's a different way of building applications... My prediction would be that Web 3.0 will ultimately been seen as applications which are pieced together. There are a number of characteristics: the applications are relatively small, the data is in the cloud, the applications can run on any device, PC or mobile phone, the applications are very fast and they're very customizable. Futhermore, the applications are distributed virally: literally by social networks, by email. You won't go to the store and purchase them... That's a very different application model than we've ever seen in computing.”

Well CornerWorld is starting to piece it together and could become the first to establish the new standards for Web 3.0, or in the company’s perspective, Web2010. They foresee rich opportunity in building the platform for creators on keyboards and consumer consumption on rich mobile devices. They believe that over the next 3 years most people will desert their cell phones for powerful mobile devices that let them browse the Internet as well as talk. The Company is a social networking site and a web audio-video solution provider focused on the promotion and distribution of content from independent professional creators. But the aggregation and consolidation warrants Web 3.0 mention.

The origins of the Company started with the creation of CornerBand in Colorado as a destination for local bands attempting to get their content to broader markets thereby increasing consumer awareness and demand. CornerBand did this by providing the back end of weekly news publications in major cities throughout the US, predominantly for the marketing-leading New Times publications.

Fast forward some and after succeeding in their goals of raising awareness for these local bands, Kazaa, a Napster type survivor predominantly focused on MP3 sharing through the peer to peer architectural style, selected the Company to establish its emerging artist section. In May 2003, Kazaa was the leading application on the Internet and the fastest growing software and network of people of all time. The experience formed a unique understanding of distribution and global demand and eventually evolved into the founding of CornerWorld, which not only caters to the emerging bands market, but to professional and amateurs alike involved in photography, comedic skits, videographers and basically anyone who wants to share and profit with creative media.

But instead of starting from scratch, CornerBand members were turned into the newly created CornerWorld to the tune of 30,000 artists with over 250,000 registered members.

Knobias spoke with CEO of CornerWorld, Scott Beck who articulately described the business and future prospects.

“The key component in terms of attracting more (artists and users) is really the services that aren’t currently available. The business management tools that include: the ability to send out email invitations, the live broadcast component, the picture sharing, the audio sharing, the video sharing and the ability to charge. It’s all of these components and the widgets that exist with it that we believe are very attractive to the content creators. And we’re coming at it from a different angle. Whereas most Web 2.0 sites are geared towards the amateur creator, we start by solving problems for the professional creator but give all the tools available to the amateur as well.”

And the tools and functionality available is where the Company differentiates itself from all of the rest. Right now, Video Sharing (YouTube), Audio Sharing, Picture Sharing (Flickr), Online Classifieds (Craigslist), Invitiation Mailer (Evite), Social Networking (MySpace, FaceBook), Instant Messenger, and Email Web Account and Mail Aggregation (Plaxo) are all available under one roof: CornerWorld.com. Add to these the Live Broadcasting component, User Content Sales, live online help, and eventually on-demand iTV, and you basically get what could be compared to as the latest Rolls Royce with every imaginable amenity, versus a single seat moped.

With that in mind, comparing functionality with total value is seemingly incredible. FaceBook has an estimated value of $15 billion. MySpace, which is easily worth more now, was bought for $580 million in 2005. Both have functionalities that only include their core social networking and a small portion of what CornerWorld offers. YouTube was bought for $1.65 billion and only offers video sharing. So why is CornerWorld’s market cap only $140 million?

That question is easily answered: users. That and this ship is only beginning to sail. But to attract these users, content is usually the only prescription. The platform is there; the functionality is there. And the Company has started the content gathering to rival some of these Web 2.0 behemoths.

CornerWorld already has a deal in place with Napster in which their content is available on CornerWorld and vice versa if users want it available through Napster. Another advantage will certainly be its functionality. With the tools of almost every Web 2.0 available under one roof, the viral phenomenon will certainly take place, adding to the content and users.

As mentioned earlier, the site has 250,000 registered users. MySpace adds 230,000 new registrations a day. But CornerWorld also has a key executive who is adequately experienced in procuring users. Kelly Larabee, Co-Founder of CornerWorld and former strategist of Skype who helped promote and guide the once obscure internet telephony company into an international powerhouse ending with the acquisition by eBay for $2.6 billion, is on board and will attempt to achieve similar results through executive strategy and visibility via public media. Growing user bases is something that she proverbially wrote the book on and has the t-shirt to prove it.

But at the heart of this is Virality. Its something Wall Street hasn’t been able to put a dollar sign on and is much of the reason for the extreme valuation multiples behind MySpace, FaceBook, and YouTube. Social Networking has become this day and age’s “it” thing. And before the imminent tailwind comes to set this ship a sail; investors would be wise to check it out for themselves. Knobias certainly will as CornerWorld is its newest addition to the Investor Relations Issuer Services (IRIS) Program. We will keep you updated accordingly.

The company profiled above is a participant in IRIS™, a Knobias, Inc. program designed to feature selected small- to nano-cap companies. Knobias may have received monetary compensation from the investor relations firm representing the featured company. Please refer to http://www.knobias.com/ for the full IRIS™ Disclaimer for more information.




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Knobias Clip Report (11-10-2007)

Submitted By Knobias ClipReport

Solar Names Shed Gain on Possible Energy Bill Revision

Monday’s session saw the market’s losses decelerate with many blue chips finding their footing for most of the day while tech names saw a sell off led by E-Trade Financial which saw its shares fall by 60%. An end of day sell off saw the Dow close below 13,000 for the first time in nearly 3 months, but with the holiday season approaching, and an already weary consumer knocked on his heels, the buying season might not be as giving to many investors.

In the small cap space, many of the solar names saw their shares take a huge hit following the industry’s trade group posting of an alert on its web site noting that Congress may not pass renewable initiatives in the much anticipated energy bill.

There was no confirmation that Congress would pass the bill without the tax credits but the Solar Energy Industries Association lobbied supporters to call their representatives and display their reactions to the cut in solar initiatives.

Some media outlets reported that Senate Majority Leader Harry Reid and House Majority Leader Nancy Pelosi had decided to remove the renewable portfolio standard (RPS) and all tax provisions benefiting renewables so that they could pass an energy bill through Congress before Thanksgiving break, but a spokesman for Pelosi noted a decision hadn’t been made on any provision yet.

Even mentioning the dropping in the provisions had many clamoring for a change.

Noted Rhone Resch, President of the Solar Energy Association, “We truly hope that Congress will provide the leadership that brings our country into the 21st century on energy technologies and energy policy-not remain stuck in the 19th and 20th century.”

Following the reports, shares of the solar names saw huge losses. SunPower Corp. (SPWR) fell 14.6%, Ascent Solar Technologies Inc.'s (ASTI) stock fell 12%, First Solar Inc.'s (FSLR) shares fell 14%, Evergreen Solar Inc (ESLR) dropped 13.7%, and even wafer producer MEMC Electronic Materials, Inc (WFR) shed 4.7%.

The pullbacks could be an attractive entry point for long term investors wanting a piece of the solar pie. Oil continues to hover in the $100 range. With crude that high, all alternatives will continue to be in higher demand globally. Also, the US market only accounts for some 10% of the global solar market.

Analysts confirmed the thought. Think Equity Partners noted the removal of the domestic tax credit would not be the end of the world. Stanford analysts acknowledged that the solar tax credits will be set aside for now, but expects there will be an extension as they don't expire until the end of 2008. SG Cowen analysts viewed the move as a “psychological blow” but noted it would have little near term impact on demand and recommended building positions. American Technology Research noted that the recent correction presented a buying opportunity.

In any event, the sector got beat up pretty badly on the speculation the Democrats would concede some points in their energy bill. Even if it isn’t passed in this session, it isn’t the end of domestic tax initiatives for alternate energy. At a later date, a new bill or initiative could be put in place to do what needs to be done which is to curb America’s dependency on foreign energy and with that in mind, investors would be wise to watch.



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Knobias Clip Report (11-09-2007)

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IEAM: Accounting Issues Abound; Shares Plunge

Friday’s session again saw the bears win again for the fourth day this week after Wachovia fueled the subprime fire by raising their loan loss provisions. The action was just another of the large banks to admit to over exposure to the risky mortgage market.

Technology names were experiencing some selling pressure as Qualcomm Inc. released some disappointing guidance for the coming months. Economic data released included the Michigan consumer index which fell further in the month to 75.0 from 80.9 in October.

Signs are pointing to a slowdown in many areas of the market. Some caused by the subprime and others unrelated, but for the time being, many equities aren’t the place for investors looking for quick gains. Instead, long term investors should be looking for bargain buys after the recent pullbacks that might or might not continue in the near term.

One small cap name that could fit the bill is Industrial Enterprises of America Inc. (IEAM). The Company focuses on automotive aftermarket chemicals and oil and is a leading supplier in the space.

Through its wholly owned subsidiaries, the Company specializes in producing “Value Brands” within the automotive aftermarket. These value products include; motor oil, antifreeze, washer and brake fluids, lighter fluid and automotive additives and chemicals as well as refrigerant kits and fire suppressants. The Company’s brands include: Phoenix, Nu-Energy, TMP, Unifide, and Pitt Penn.

According to the Automotive Aftermarket Industry Association (AAIA), “U.S. motor vehicle aftermarket sales grew by 5 percent last year to $267.6 Billion.” And the Company had been growing their share of this market through organic means and acquisitions.

In May, the Company reported their third quarter revenue of $17.6 million as compared with $9.0 million for the same period in fiscal 2006. The increase in revenue over last year was partially due to the inclusion of the Pitt Penn Group, acquired January, 2006, and more importantly due to increased production capabilities. GAAP EPS was a loss of (47c) versus a loss of ($1.60). But some of the loss was due to an accounting change. The Company switched inventory accounting methods from the Average Cost Method to First in First Out. The latter has sometimes been used to prop up inventory and thus asset levels at the expense of accurate readings on the income and balance sheet. The Company also incurred approximately $9,300,000 in non-cash charges during the quarter.

Over the next few months, management changes arose from the appointment of Dan Redmond to COO and the hiring of Jorge Yepes as CFO due to Dennis O'Neill’s incapacitation due to health.

In July, the Company reported an increase in share count due to convertible debt being converted, warrants being exercised, and other debt being paid with equity. The number of outstanding was noted as being 19 million but would be combated with an increased buyback program which was upped to $25 million.

Between that time and September, more organization changes began to take place causing accounting difficulties and the establishment of a reserve account to pay recent layoffs, litigation charges, and organization reconfigurations. The Company noted a delay in filing their 10-K.

In October, another accounting discrepancy arose, and the Company announced they were reviewing its accounting practices regarding revenue recognition practices regarding "bill and hold" transactions. Also noted was the review of past financial statements regarding the accounting treatment on financing transactions with variable conversion prices for 2006, hence management noted that their 10-KSB for 2006 should not be relied upon by investors. Again, management announced the continuation of share buybacks facilitated through a new revolving line of credit.

During this time frame from June to October, shares fell from the $5.40 range to $3.00 at the end of October. Then on Nov. 7th, the Company announced an increase in their reserve for current litigation by a large $9.5 million to $13.5 million, an admission of using non GAAP revenue recognition procedures regarding revenue recognition using the “Bill and Hold” techniques, a settlement of litigation by issuing additional shares and a $500 thousand cash payment, the reimbursement of litigation expense paid by CEO John Mazzuto with the additional issuance of shares and another admission that the expense wasn’t recorded on the Company’s financial statements.

The result was an increase in shares outstanding by 9 million to 26 million. Additionally, the Company announced that the stock buyback would still continue but at a “slow and consistent pace”.

In another release on the same day, the Company announced the suspension of newly hired CFO, Jorge Yepes, and that the board would conduct an integrity review for possible violations of policies and procedures.

The announcements culminated in share depreciation from $6’s in May to 67c for a Company with obvious accounting difficulties but one that did have growing revenues and EBITDA before the news. With a clean up of the accounting difficulties, a management re-focus on growing top and bottom lines, and a continuation and acceleration of their share buyback which would give investors a vote of confidence in the long term prospects for the name, and the name possibly becomes a cheap one to follow. Investors would be wise to watch.



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Knobias Clip Report (11-08-2007)

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INPC: Files Chapter 11; Agrees to Sell to Versa Capital

Thursday’s session saw a bit of a reversal from what has been common place in the markets over the past few days. The Dow which was down over 200 points on the day saw bulls take hold and stave off another triple digit loss, closing down only 33 points.

Financials led the reversal while technology names were mainly down following Cisco’s earnings reports that painted a bleak picture.

Bernanke testified in Washington and commented that the subprime mess could be in the $150 billion ballpark. The comment early in the day sparked the selloff but reversed when many theorized that he didn’t see the problem coming in the first place giving rise to the theory that he probably doesn’t know the extent and that his estimate could be inaccurate.

In the small cap space, another technology related name saw its shares’ 10 month long continue after filing for bankruptcy.

InPhonic, Inc. (INPC) is a leading online seller of wireless services and products. The Company sells these services and devices, and provides world-class customer service through websites that it creates and manages for online businesses, national retailers, member-based organizations and associations under their own brands.

The Company also operates Wirefly, a leading one-stop comparison mobile phones and wireless plans shopping site that has been awarded "Best of the Web" by Forbes magazine and "Best in Overall Customer Experience" by Keynote Performance Systems. They also deliver a full range of MVNO and mobility solutions to enterprise clients through its Mobile Virtual Network Enablement (MVNE) platform.

On Thursday, InPhonic announced that it had entered into an agreement to sell substantially all of its assets to an affiliate of Versa Capital Management, a Philadelphia based private equity firm.

In order to implement the sale, InPhonic filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

It was noted that Versa would also be providing a Debtor-in-Possession ("DIP") financing facility to provide working capital and financial resources necessary to fund the transition in operations to new ownership pending court approval of the sale to Versa. InPhonic will continue to conduct normal business operations at all of its facilities consistent with its obligations as a Chapter 11 debtor-in-possession.

The filing of bankruptcy was triggered by an Oct 1. missed interest payment on the Company’s secured loans which triggered the default notices.

Top unsecured creditors were noted as being Microsoft at $8 million, Yahoo at almost $4 million, and Google at $3.5 million.

Following the announcement, shares plunged some 84% to 6c a share. The Company’s equity began the year at $11 a share and hit highs of $14.50 in February before sliding to current levels.



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Knobias Clip Report (11-06-2007)

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MNTA: Shares Plunge on FDA Rejection

Tuesday’s session saw Wall Street retrieve an earlier bounce and rallied into the close as Exxon Mobil gained on record crude oil prices. But not all blue chipper’s gained as Citigroup saw its shares fall again on continued fallout from subprime.

With oil reaching higher and higher and closing in on the $100 psychological resistance level, investors should look again at alternate energy plays with solar being a major focus. Many of the larger solar names such as First Solar Inc. and SunPower Corporation have seen extensive runs without the help of $100 oil.

In the small cap space, one pharmaceutical saw shares decline enormously on some disparaging news for holders.

Momenta Pharmaceuticals (MNTA) is a biotechnology company specializing in the detailed structural analysis of complex mixture drugs. The Company applies its technology to the development of generic versions of complex drug products, as well as to the discovery and development of novel drugs.

Their most advanced product candidate, M-Enoxaparin was designed to be a technology-enabled generic version of Lovenox(r). Momenta's first novel drug candidate is M118, a rationally engineered anticoagulant specifically designed for acute coronary syndromes. Within the Company's discovery program, it is seeking to discover and develop novel therapeutics by applying its technology to better understand sugars' functions in biological processes, with an initial focus in oncology.

On Tuesday, the Company announced that the FDA had denied the approval of their most advanced candidate, the blood clot drug Enoxaparin Sodium. The product was being developed with partner Sandoz, a unit of Novartis AG (NVS).

The FDA's letter stated that the ANDA was not approvable because the application did not adequately address the potential for immunogenicity of the drug product and recommended that Sandoz and Momenta meet with the Office of Generic Drugs to determine what additional information should be provided to adequately address this concern.

It was noted that Sandoz and Momenta were working together to identify the additional information that is necessary to obtain approval of the ANDA.

Following the announcement, analysts were out in droves updating price targets and giving their take on the prospects of the Company.

In a note to investors, Cowen & Co. analyst Eric Schmidt called this news "surprising" and said that receiving a non-approval letter for an abbreviated new drug application is extremely rare. "We expect investors to be skeptical around Momenta's entire technology platform, pipeline and complex generic strategy," Schmidt wrote.

Bear Stearns reiterated an "underperform" rating on Momenta shares after the disclosure and estimates that Momenta's pipeline is now worth about $2 per share.

At the close on Tuesday, shares had fallen over $7.70 to close at $5.67, down over 57% on 17.58M shares traded. With extreme pessimism over the Company’s future prospects and pipeline from analysts and investors, investors would be wise to watch.



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Knobias Clip Report (11-05-2007)

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Airtrax Rolling in New Direction

Like countless other companies with stocks trading under $1, Airtax, Inc., (AITX) has found itself facing hurdles in turning around its fortunes. In addition to fighting a perceived identity misconception from the public in general, the Company has undoubtedly struggled with its financial situation. After mourning the passing of former CEO Peter Amico in August of last year, the Company underwent management changes. Along with the appointment of Andrew Guzzetti to Chairman of the Board, Robert M. Watson was named as the Company’s CEO.

“We’re a company that’s been in existence for a while, but the leadership team we’ve brought in has really only been in operation for about a year,” Mr. Guzzetti said. “A lot of people think we’re in the forklift business, but we’re really in the technology business, trying to find ways that Omni-Directional can be used.”

A U.S.-based developer of Omni-Directional Technology, Airtrax designs and manufactures Omni-Directional Vehicles. The Airtrax patented wheel was designed and developed after receiving a technology transfer from the U.S. Navy in 1997. Its precursor, the Mecanum wheel, was developed in Sweden in 1973, and the patent was sold to the Navy in the 1980’s. According to Wikipedia.com, “It is a conventional wheel with a series of rollers attached to its circumference, these rollers having an axis of rotation at 45° to the plane of the wheel in a plane parallel to the axis of rotation of the wheel. As well as moving forward and backward like conventional wheels, they allow sideways movement by spinning a pair of wheels in opposite directions.”

Mr. Guzzetti commented, “[the vehicle] can turn around in its own footprint, that’s really how you describe it.”

Intrigued by the technology, the Israeli Air Force wanted to check it out for themselves, and signed an initial agreement in September of 2006. This past May, a MP2 Equipment Handler Prototype was shipped to Israel for evaluation in its actual operating environment.

The tests were successful, and Airtrax announced last Tuesday the Israelis had ordered five more units. And in addition to the vehicles themselves, the IAF expressed its intent to order certain support equipment including stand-by battery cassettes, chargers, battery installation and service carts, as well as spare consumable and replacement parts.

The Company said it would receive approximately forty percent of the total revenue from the order in the fourth quarter of 2007, with the remaining balance to be paid in the second quarter of 2008.

Due to the sensitive nature of the vehicle’s intended use, specific details have not been disclosed, however Mr. Guzzetti did say, “The MP2 that the Israelis bought is about a car length long, weighs 2,000 pounds, and has the ability to cut on a dime and get out with whatever they are loading. I would say it can carry over 3,000 pounds.” Total contract value has not been release either, but Guzzetti noted, “The individual machines are in the $100K plus range, we can tell you that.”

And before the Israelis came calling, Airtrax was already developing the technology for civilian use. Along with SIDEWINDER forklifts, the Company plans to launch the KING COBRA line of scissor lifts early next year.

In June, Airtrax signed a 10 year sales and distribution agreement with Metalman Engineering Ltd. of Waterford, Ireland. The agreement granted Metalman the exclusive rights for the sale and distribution of Airtrax's SIDEWINDER and KING COBRA products throughout Ireland. By September, four SIDEWINDER ATX-3000 forklifts had been shipped.

And have the Israelis shown interest in continuing their relationship with Airtrax?

“Absolutely,” noted Guzzetti, “They’ve already indicated that this is just the first order, and want to look at how Omni-Directional technology can benefit their other military divisions.” In fact, the Company recently hosted a contingent from the Israeli Ministry of Defense in October, including top level officials.

“We’re doing a lot of things to get this company up and running; we think it’s exciting technology…. there are a lot of different applications for it and we’re one of the leaders in it, if not the leader.”

Airtrax currently reports TTM revenues of almost $300 thousand, with net losses of $7.1 million. The Company’s stock was recently quoted at $0.23 per share.



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Knobias Clip Report (11-02-2007)

Submitted By Knobias ClipReport

LOV: Investors 'Love' the Latest Earnings Report

Friday’s session saw subprime headlines emerge again causing financial stocks to continue their slide following the Fed’s announcement on Wednesday. Merrill Lynch and Washington Mutual led the way down as Merrill was the subject of a Wall Street Journal report noting the firm had engaged in deals with hedge funds to delay recording the losses on risky mortgage backed securities. It was noted that the SEC had begun a probe looking at how all Wall Street firms were valuing mortgage securities.

Washington Mutual saw shares slide following a suit filed against First American Corp by the NY Attorney General accusing the firm of colluding with Washington Mutual in inflating the appraisal value of homes.

Citigroup was also rumored to have set up emergency board meetings for this weekend to discuss possible additional writedowns or the dismissal of CEO, Chuck Prince.

It seems the subprime fiasco is beginning to completely unfold and display some of the largest losers who are grasping at possibly unlawful activities to soften the blow from mistakes made by the risk managers in the firms.

In any event, earnings were still the name of the game in the small cap space with one in particular displaying some impressive growth. Spark Networks, Inc. (LOV) is a provider of online personals services in the US and internationally. The Company sites include: AmericanSingles.com, BBWPersonalsPlus.com, BlackSingles.com, CatholicMingle.com, ChristianMingle.com, CollegeLuv.com, Cupid.co.il, Date.ca, HurryDate.com, JDate.com, LDSMingle.com, and