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VistaGen Therapeutics (VSTA): A Better Way to Play Stem Cell Technologies

Tuesday, November 27th, 2012

VistaGen Therapeutics Inc. (OTCQB: VSTA) is a biotechnology company applying human pluripotent stem cell technology in a whole new way. Unlike StemCells Inc. (NASDAQ: STEM) or Aastrom Biosciences Inc. (NASDAQ: ASTM), VistaGen is focused on leveraging stem cell technology for drug rescue and for screening new drug candidates for heart and liver toxicity and metabolism issues.

The Failure-Prone Drug Development Paradigm

Pharmaceutical companies spend a lot of time and money trying to bring new drugs to market. Eli Lilly & Co. (NYSE: LLY) noted on its company blog around Super Bowl time that, on average, it costs $1.3 billion to bring a new drug to market. That’s enough to buy 371 Super Bowl ads, pay the salary of almost all NFL players, or purchase two professional football stadiums.

But adjusting for failure rates, these costs could really be between $4 billion and $11 billion, according to Bernard Munos of the InnoThink Center for Research in Biomedical Innovation. These costs are derived by everything from clinical trials (the highest can cost $100 million) to manufacturing and clinical testing (that can cost upwards of $1 billion).

Finally, experts estimate that fewer than one in 10 medicines that start human clinical trials end up succeeding. The combination of rising costs and rising failure rates has led to a growing problem for the pharmaceutical industry.

Improving Results with Stem Cells

VistaGen Therapeutics is using stem cell technologies to address the largest component of drug development failures – heart and liver toxicity. Some 60% of the cost of failure associated with new drug candidate R&D is related to heart and liver toxicity, according to the company’s management, which means that the elimination or even reduction of ongoing losses in drug development could save billions.

Using stem cell technologies, the company’s versatile stem cell technology platform, Human Clinical Trials in a Test Tube™, provides clinically relevant predictions of potential toxicity of promising new drug candidates long before their testing on humans. And its CardioSafe 3D™ human heart cell-based in vitro screening system, soon to be complemented by its LiverSafe 3D human liver cell-based bioassay system, represent the two most advanced applications of this game-changing technology.

While predictive toxicology may be a great way to generate revenues, the company is really focused on developing a pipeline of new drug candidate assets by leveraging small molecule compounds that have already demonstrated efficacy through the investment of millions by others, but went off track due to heart or liver toxicity or metabolism issues. VistaGen’s drug rescue initiatives are designed to combine human stem cell technology with modern medicinal chemistry to generate new, safer chemical variants (“drug rescue variants”) of once-promising drug candidates. These are small molecule drug candidates with potential efficacy benefits (but also safety concerns) previously discovered and developed by pharmaceutical companies, the U.S. National Institutes of Health and other governmental agencies, and academic research laboratories. Hundreds of such drug candidates have already been identified and reviewed, and the firm has chosen five as areas of further focus and potential drug rescue activities.

Near-term Commercialization

VistaGen Therapeutics’ lead drug candidate is AV-101 for the treatment of neuropathic pain. AV-101 is completing Phase IB clinical trials. The company hopes that Phase I safety studies will enable a corporate partnering arrangement for further clinical development and, ultimately, commercialization of the drug for the treatment of neuropathic pain and, potentially, depression, epilepsy or Parkinson’s disease. Notably, the firm has received $8.5 million from the National Institute of Health (NIH) for preclinical and Phase 1 clinical development of the drug.

VistaGen plans to develop drug rescue variants and put them back in the hands of the pharmaceutical company that developed the original drug. By limiting their focus to toxicity, the firm requires very little headcount to generate drug rescue variants, and it could generate and license or sell its first variant in 2013.

Finally, the company’s management team has a lot of experience in leading and building OTC companies and has strong backing from existing long-term institutional shareholders. With plans to seek a listing on a NASDAQ or NYSE market next year, investors can look forward to additional value being unlocked, while capital costs should remain relatively low due to its innovative business model that does not require any time-consuming interaction with the FDA, elaborate and expensive manufacturing infrastructure, or costly clinical trials.

For more information, please see the following resources:

Tags: NASDAQ:ASTM, NASDAQ:STEM, NYSE:LLY, PINK:VSTA
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Xhibit (XBTC): Effectively Monetizing Online Advertising

Tuesday, November 27th, 2012

There is little doubt that the online advertising industry is rapidly growing, but not all public companies are created alike from an investor standpoint.

Many companies like Millennial Media Inc. (NYSE: MM), Incontact Inc. (NASDAQ: SAAS), and ExactTarget Inc. (NYSE: ET) are focused on growing their business at the expense of profitability, while many social media and gaming companies like Zynga Inc. (NASDAQ: ZNGA) are targeting niche markets that have low barriers to entry and difficult monetization.

Finding the Optimal Balance

Wall Street has struggled to value Internet companies for years. On one hand, they offer strong cash flow generation with their limited overhead relative to many traditional industries. But on the other hand, they tend to reinvest a significant amount of that capital in their growth in order to stay ahead of the competition and maintain their edge over time.

Some larger companies have reached a sweet spot, having reached a critical scale that enables profitability. For instance, ValueClick Inc. (NASDAQ: VCLK) and IAC InterActive Corp (NASDAQ: IACI) both generate consistent profitability, while IACI even offers a 2.24% dividend yield. But these stocks don’t necessarily have the upside they used to given their size.

Xhibit Bridges the Gap

Xhibit Corp. (OTCQB: XBTC), a cloud-based marketing and technology development company, is a relatively small player, with a market capitalization of $262 million. With a keen focus on monetization, the company has reached profitability early on for investors, but unlike many larger players, there is still a lot of potential upside remaining.

By combining many services under one roof, the company offers advertisers a one-stop shop for all of their digital marketing needs. These services range from creative design to lead generation to e-mail marketing, combining many of the services found individually in other companies.

For example, the company’s TwitYap and MovieSocial properties will offer advertisers unique access to targeted social media audiences following celebrities and the film industry after their anticipated launch later this year, while its FlyReply™ e-mail marketing solution offers something similar to Constant Contact Inc. (NASDAQ: CTCT) but has monetization properties unique to Xhibit.

Blue Chip Clients & Profitability

Unlike many small public companies, Xhibit has generated sustainable profitability with a blue chip client base that includes companies like esurance, Capitol Records, American Laser Center, and The Beach Boys. And more recently, this has expanded to include others like the Bob Bondurant School of High Performance Driving, celebrity nutritionist David Allen, and most recently Xhibit announced a deal to manage digital marketing for American Idol winner Jordan Sparks.

Meanwhile, the company reported gross profits that increased 228% to $1,606,369 and net income that jumped 74.8% to $232,161, signaling that its business is rapidly growing. The balance sheet also remains very healthy with $5,398,315 in assets compared to $2,256,817 in liabilities, yielding shareholders’ equity of $3,141,498.

Taking Stock of the Company

Xhibit Corp. (OTCQB: XBTC) offers investors an early stage play on the growing online advertising industry. With top-tier advertisers already using its technology, the company’s management believes that it can continue growing the company and generate significant revenue increases over the next 12 months – setting it apart from many other OTC companies.

For more information, please see the following resources:

Company Website
Recent SEC Filings
Fill out the form on the right

Tags: NASDAQ:SAAS, NASDAQ:ZNGA, NYSE:ET, NYSE:MM
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Versant (VINTB): Part Private Equity, Part Berkshire Hathaway

Monday, November 26th, 2012

Versant International Inc. (OTCBB: VINTB), a diversified financial holding company focusing on investments in environmentally responsible, profitable and growing companies, aims to combine the best elements of private equity firms, like BlackRock Inc. (NYSE: BLK), and value-centric financial holding companies, like Berkshire Hathaway Inc. (NYSE: BRK). Recently, the Company has acquired private businesses in the specialty foods space. Similar public comparables would be The Fresh Market (NASDAQ: TFM), and United Natural Foods, Inc. (NASDAQ: UNFI).

Perfect Market for Acquisitions

Sam Zell recognized that the real estate market was sharply undervalued in the 1970s and founded Equity Group Investments to capitalize on that fact. Using a public company entity, he strategically acquired properties and eventually became the largest apartment owner and the largest office owner in the entire United States, making billions for investors.

The economic crisis today has yielded a similar opportunity in the private company space, where simple lack of financing has constrained growth rates. Similarly, a lack of capital in the private equity and financial industry has resulted in fewer mergers and acquisitions, which has further depressed the valuation of many private companies around the United States.

The Best of Both Worlds

Versant is a holding company that aims to capitalize on these opportunities by identifying, acquiring and growing undervalued or underfunded private companies. As a public company, Versant has access to the capital markets that can provide debt or equity financing, which can then be channeled into these subsidiaries to help them unlock value.

Like a private equity fund, the company seeks to identify smaller private turnaround opportunities that can yield outsized returns rather than investing in already-public companies that appear to be undervalued. But like the long-term orientated Berkshire Hathaway, the company aims to hold these investments rather than spinning them off into public entities.

Experienced Leadership Team

Versant is led by Chairman and Chief Executive Officer Glen W. Carnes, who’s a seasoned investment banking professional with over 14 years in the financial investment industry. Before starting Versant, Mr. Carnes served as a managing partner of a private investment management firm between October of 2010 and November of 2011.

A Great Investment Opportunity

Versant has acquired three private companies that it hopes to build into significant businesses moving forward by infusing them with growth capital and providing guidance as needed, since its acquisition strategy was first implemented in early 2012.

The three companies include:

Mamma’s Best LLC – An organic natural foods company that develops high-quality organic barbeque sauces, marinades, soups and spreads that are available at Sprouts, Whole Foods and specialty grocers around the country.
Grocers Direct LLC – A food brokerage firm focused on emerging brands in the natural and organic food arena.
Strategic Management Consultants – A consulting firm that provides skilled advice for businesses to streamline and make more efficient management and organizational decisions.

For more information about Versant, please see the following resources:

www.versantinternational.com

Tags: NASDAQ:TFM, NASDAQ:UNFI, NYSE:BLK, NYSE:BRK, OTC:VINTB
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EastBridge (EBIG) Makes Big Move into Regenerative Medicine

Thursday, November 15th, 2012

There is little doubt that the stem cell industry – or regenerative medicine industry – is rapidly growing in size and popularity around the world. In fact, stem cell pioneers John Gurdon and Shinya Yamanaka were recently awarded the Nobel Prize in Physiology or Medicine for their work in laying the foundation for the regenerative medicine industry.

Investors have been equally optimistic over the past couple of years, as the regulatory uncertainty around the industry has improved. The U.S. FDA approved its first cord blood product for use in transplantation last year, while Osiris Therapeutics Inc.’s (NASDAQ: OSIR) Prochymal became the first Western-approved stem cell therapy in May of 2012.

What is Regenerative Medicine, Exactly?

Regenerative medicine refers to process of replacing or regenerating human cells, tissue or organs to restore or establish normal function. Rather than relying on chemical-based drugs to modify the behavior of natural systems, regenerative medicine uses the body’s own cells to repair broken biological systems and recover their original function.

Scientists take stem cells from the patient (autologous) or from a donor (allogeneic) and grow them into specific cell types that are then transplanted into patients to repair or replace damaged or destroyed cells. Since there are no external chemical used, scientists believe that these processes involve far fewer risks than traditional pharmaceuticals.

The regenerative medicine industry is expected to reach $1.4 billion by the end of 2015, according to a new report by Global Industry Analysts Inc., led by an increasing focus on stem cell research, greater use of non-autograft products, ageing baby boomers and higher investments in research and development activity.

China Represents a Promising New Market

Currently, the U.S. houses just over half of worldwide regenerative medicine clinical trials, but only about 43% of late-stage Phase III clinical trials. Meanwhile, China is rapidly developing a regenerative medicine regulatory framework and has already surpassed Germany and France to become the third largest pharmaceutical market after the U.S. and Japan.

Clinical trials in China cost about a tenth of those conducted in the U.S., while regenerative medicine treatments could also be approved much more quickly. As a result, regenerative medicine companies are increasingly focused on building global brands that can be rapidly commercialized in some markets, while setting the stage for others.

EastBridge Merges with One Such Company

On November 14, 2012, EastBridge (EBIG) announced a merger agreement with Cellular Biomedicine Group Inc. (CBMG), a translational regenerative medicine company with multiple planned clinical trials in the Greater China market. Under the terms of the agreement, CBMG will own approximately 70% of the combined company, while EBIG shareholders will own 30% of the entity.

Here’s an outline of the structure and benefits to each party:

CBMG’s Chairman and CEO Steve Liu will lead the combined company as Chairman and CEO, EastBridge’s Keith Wong will remain on the Board of Directors, and EastBridge’s Norm Klein will serve as CFO of the combined company as well as being a Board Director. The two divisions will operate autonomously within the new company that will trade under the future ticker symbol “CBMG”.

A Look at CBMG’s Strong Market Potential

Cellular Biomedicine Group Inc. is a translational medicine company focused on the regenerative medicine space with existing and planned clinical trials in both the United States and China. With an extensive portfolio of biomedicine patents, the company is positioning itself to become of the leading players in China’s regenerative medicine industry.

Currently, the company has several biomedicine patents and has in-licensed exclusively for greater China a completed U.S. FDA Phase II clinical trial for late stage skin cancer (melanoma) immunotherapy (tumor cell targeted dendritic cells) and has agreements with three large AAA China hospitals to expedite liver cancer and skin cancer clinical trials based on U.S. protocols.

The company also has significant existing business operations in Greater China, including a diverse set of autologous and allogeneic regenerative medicine technologies, as well as two U.S. compliant biologics cGMP facilities for manufacturing new drugs and therapies. Finally, its seasoned scientists and management team are well equipped to generate significant revenue.

Several Catalysts Moving Forward

Prior to the merger, EastBridge’s market capitalization was approximately $6.58 million, which means that the combined entity would need to be worth $21.93 million in order for existing shareholders to break even on the transaction. With the enormous potential outlined above, the stock could very well exceed this figure and deliver significant value to shareholders.

The merger may also enable the combined company to pursue an uplisting to the NASDAQ stock exchange. With many institutional investors forbidden to invest in OTC securities, the move could open the door to a far wider investment audience and help unlock additional value. And, any added funding could expedite clinical trials and lead to nearer term commercialization.

For more information, please see the following resources:

Tags: NASDAQ:OSIR, PINK:EBIG
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New SaaS Provider Reports Breakthrough Quarter

Thursday, November 15th, 2012

Accelerize New Media Inc. (OTCBB: ACLZ), a software-as-a-service (SaaS) platform providing a comprehensive and complete online tracking solution for advertisers featuring easy-to-use wizards, real-time reporting, and a seamless integration API to interface with third party applications, recently reported its third quarter financial results.

Highlights from the quarter include¹:

Revenues increased 225% to $1,570,948 year over year.²
Operating income increased to $207,040 from a loss last year.
R&D investment increased to continue building an industry-leading solution.
Average number of clients increased 102% year over year.
Average monthly fees per customer increased 106% year over year.
Net income swung to a net profit of $166,132³ vs. a year ago loss of $244,265.

According to Forrester Research, a full 66% of all advertising budgets will be spent on performance-based marketing by 2013, compared to just 32% impression-based and 2% sponsorship. The company’s Cake Marketing platform seeks to capitalize on these trends by making performance-based marketing more measurable and trackable.

New Clients & Recurring SaaS Revenues Drive Results

Accelerize New Media has been consistently expanding its business over the past quarter with a number of new clients and partnerships. The average number of clients using the company’s Cake Marketing platform more than doubled over the past year, as its marketing efforts and platform improvements continue to drive new business.

On June 25^th, the company announced that LegalZoom.com – a leading provider of online legal documents – selected Cake Marketing’s advanced tracking and analytics platform to help power its affiliate program. And in August, the company enhanced its infrastructure by becoming a Rackspace (NYSE: RAX) Premiere Platinum level partner.

Combined, these new clients and partnerships contributed to the 225% increase in year over year revenues to $1,570,948, during the third quarter.²

SaaS Business Model Enhances Profitability

In addition to its triple-digit top-line growth, Accelerize New Media’s profitability has also been improving over the past year. Operating income jumped to $207,040 last quarter from a year ago loss, while its gross margins more than doubled quarter over quarter, from 6.2% to 13.2%, demonstrating the company’s scalability and profitability.

These results were largely driven by a 106% increase in the average monthly fee per customers, as many of the firm’s larger existing customers began ramping up their transaction volume. The market acceptance on the part of these larger clients is also a large vote of confidence in the Cake Marketing platform and its viability in the marketplace.

These factors combined to produce positive net income of $166,132, compared to a net loss of $244,265 during the year ago period.³ Meanwhile, the firm reported $96,189 in positive 6-month operating cash flow, as revenue growth flowed down to the bottom line.²

Comparing SaaS Valuations on Wall St.

Accelerize New Media recently reported triple-digit revenue growth, sustainable profitability, and strong cash flow generation. With a market capitalization of $25.1 million, the stock trades at a trailing 12-month price-sales ratio of less than 2.5x, which is lower than many of its competitors.

Company Name	Ticker Symbol	Price-Sales Ratio (TTM)	Revenue Growth Rate (Q YoY)
Responsys	NASDAQ: MKTG	2.92x	19.6%
Salesforce.com	NYSE: CRM	7.68x	34.0%
ExactTarget Inc.	NASDAQ: ET	5.83x	41.9%
Millennial Media Inc.	NASDAQ: MM	9.14x	75.6%

For more information, please sign-up for updates using the form on the right side of this page or see the following resources:

Footnotes

Data from Accelerize New Media’s 10-Q Filing Dated November 14, 2012 on SECFilings.com.
Excludes the results of operation in connection with the sale of certain assets in September 2012 relating to Accelerize New Media’s online marketing services business as further described in its September 27, 2012 8-K filing: http://edgar.sec.gov/Archives/edgar/data/1352952/000143774912009802/aclz_8k-092712.htm.
Excludes the receipt of sale price in connection with the sale of certain assets in September 2012 relating to Accelerize New Media’s online marketing services business as further described in its September 27, 2012 8-K filing: http://edgar.sec.gov/Archives/edgar/data/1352952/000143774912009802/aclz_8k-092712.htm.

Nothing on this website is either an offer to purchase, or a solicitation of an offer to sell, shares of Accelerize New Media, Inc. or any other entity. Nothing on this website is a solicitation of a proxy from a security holder of Accelerize New Media, Inc. or any other company. Emerging Growth LLC, the author of this website, has received consideration valued at $20,000 from Accelerize New Media, Inc. for services in connection with an online marketing campaign running between November 15 and November 30, 2012 that includes the information on this website. Such consideration shall reduce the outstanding principal balance of the services promissory note made payable from Emerging Growth LLC to Accelerize New Media, Inc. as further described in Accelerize New Media, Inc.’s current report on Form 8-K filed on September 27, 2012: http://edgar.sec.gov/Archives/edgar/data/1352952/000143774912009802/aclz_8k-092712.htm.

Tags: OTC:ACLZ
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Greyson (GYSN): Strong Management Team with History of Success

Wednesday, November 14th, 2012

Microcap and small cap stocks are often early-stage growth companies with little in the way of operating history, substantial revenues or significant assets. Given this lack of fundamental information, management’s history of success is one of the most important elements to look at for investors looking to get involved at an early stage.

Greyson International Inc. (Pink Sheets: GYSN) is an early-stage developer of health and beauty products whose management team has an impressive track record of success, including working with companies like Revlon Inc. (NYSE: REV) and L’Oreal (EPA: OR). And with a market capitalization of just $12.1 million, the stock represents a potentially strong early-stage investment opportunity for those willing to bet on this team.

Several Past Successful Ventures

Greyson was founded by Chairman and CEO Harvey Tauman, who has substantial experience in developing cosmetic and personal care products. In the 30 years prior to starting Greyson, Mr. Tauman founded and led Hydron Technologies Inc., which rose from $0.15 to approximately $150.00 per share in one year, adjusted for three stock splits.

Before that venture, Mr. Tauman worked for the National Patent Development Corporation, which was responsible for introducing soft contact lenses to the world. In one year during his consulting tenure, shares of that company rose from $1.00 per share to approximately $441.00 per share, adjusted for three stock splits during that year.

Mark Karsch, Greyson’s marketing and distribution consultant, also has extensive experience in the cosmetics business. In the 1980s, he purchased a business with an annual volume of less than $750,000 and grew the company to $242 million in annual sales before selling it in 1989.

Well-Rounded Industry Experience

Greyson’s management team includes a combination of leaders from the success at Hydron Technologies Inc. and others instrumental in bringing successful cosmetic products to market. A few examples of this talent include Paul Thau, Richard Tauman and Donna Pascoe, who are leaders in various parts of the multi-billion dollar cosmetics industry.

C. Mukesh Prasad, the company’s executive vice president and corporate secretary, worked with Mr. Tauman at Hydron Technologies Inc. for over 25 years holding a wide variety of positions. Mr. Prasad brings hands-on managerial experience and was instrumental in bringing Greyson International public on the OTC markets.
Paul Thau, the company’s research and development consultant, worked at Cosmair L’Oreal USA for over 20 years serving as Assistant Vice President of Cosmetics R&D and then as Senior Research Fellow. Mr. Thau has also worked for over 50 years in R&D positions at Revlon, Bristol-Myers, CIBA Pharmaceuticals and Warner-Lambert.
Richard Tauman, the company’s executive consultant, previously worked with Quorum Productions, an independent television production company. As producer and business manager, he generated over $45 million for “Designing Spaces”, a home improvement show that airs weekly on Lifetime Television Network.
Donna Pascoe, the company’s research and development hair consultant, became a household name with her own hair care line “Mine” and her latest line called “Revenge”. In 2011, Ms. Pascoe’s salon – the Donna Pascoe Salon – was named the Best Salon of 2011 in New Times magazine.

Strong Potential in the Cosmetics

Greyson International is focused on developing innovative new cosmetic products based on its proprietary Trilexon® delivery system. Earlier this month, the company announced a breakthrough new foundation based on this technology that offers longer wear times and continuous release of ingredients to give skin a healthy and youthful look.

Moving forward, the firm plans on launching many more products based on this technology, ranging from additional cosmetic products to potential applications in the medical industry. For instance, the delivery system could prove useful in restoring damaged cells and reducing scar discoloration, while leaving skin smoother and clearer.

The company’s strong management team has demonstrated a track record of success, while covering virtually every aspect of the cosmetics industry. From research and development to advertising and marketing, the team has extensive experience in all of the areas necessary to successfully bring its revolutionary new cosmetic products to market in a big way.

For more information, please see the following resources:

Tags: EPA:OR, NYSE:REV, PINK:GYSN
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The Best Way to Capitalize on China’s Vocational School Boom

Tuesday, November 13th, 2012

China’s stock market has suffered from the global economic downturn, as exports fell dramatically to both the U.S. and E.U. Fortunately, the country’s domestic economy has offered investors a number of growth opportunities. Private education in particular has benefited enormously from urbanization and an increasingly competitive job market.

China’s (Still) Booming Education Industry

China’s education industry has been rapidly expanding over the past decade and this growth is expected to continue over the foreseeable future. BDA expects the private training and educational market to grow at a 23% compound annual growth rate between 2008E and 2013F, with the total market reaching $115 billion by the end of 2013.

These substantial growth rates are supported by improving population demographics. By 2025, China’s middle class will represent 80% of the population with considerable more spending power than right now. Meanwhile, the country’s one-child policy means that parents are spending an increasing amount on their children’s education over time.

A number of public companies are capitalizing on this industry, including New Oriental Education & Technology Group (NYSE: EDU), Ambow Education Holding Ltd. (NYSE: AMBO), ATA Inc. (NASDAQ: ATAI) and others. Over the past month, these stocks have outperformed the S&P 500 by nearly 5%, according to TickerSpy’s Chinese Education Stocks Index.

College Alone Isn’t Enough Anymore

Before the new millennium, a college education in China virtually guaranteed a job offer, but these dynamics are rapidly changing. The 2008 global economic crisis and increasing numbers of graduates have led to more competition for jobs. Unemployment rates among college graduates jumped from just 18% in 2001 to 30% in 2008 and may be even higher now.

As a result, an estimated 40% of college graduates participated in extra training sessions in 2007 to enhance their competitiveness in English, IT training, exam preparation and management training, according to BDA. Similarly, blue-collar vocational training is also rapidly growing with some 111 million, or 69% of 15-22 year olds, not enrolled in public education.

Considering that the $100 billion private education industry currently targets only a third of the potential market, there is an enormous additional opportunity that private vocational schools are attempting to capitalize on with few industry leaders. As a result, there’s an enormous opportunity for investors to get involved and profit from these trends.

Wonder Offers the Best Opportunity

Private vocational schools exist for just about every segment of the market, but not all opportunities are created alike. Primary and high schools are dominated by the public sector, with only 4% to 10% penetration by private companies, while even vocational schools only have a 13% market penetration by private firms, according to BDA statistics.

Wonder International Education (OTCBB: WIEI) operates seven vocational training schools located in different provinces in China, including Anhui, Jiangsu, Zhejiang, Fujian, Henan, Hubei and Liaoning. These schools provide primarily IT education with a focus on job placement services to students through 12 employment centers nationwide.

By focusing on employment, the company operates in a segment of the vocational school industry that’s more than 80% controlled by private companies. Even industry leaders like New Oriental in English and Aptech in IT training still account for a small market share, meaning that the fragmented market remains ripe for consolidation.

Many Other Potential Catalysts

Wonder Education also benefits from a number of other catalysts. For instance, the company only recently became listed on a U.S. exchange and much of the transaction activity has been buying transactions versus selling transactions so far. Still, the stock trades with a market capitalization of just $30 million, despite being profitable and growing.

During the first six months of the year, the company’s revenues jumped 36.5% to $9,265,867 due to aggressive marketing and promotional campaigns. Net income also increased on the bottom line, jumping 41% to $4,225,020, or $0.21 per share. If successful in earning an additional $0.21 over the next six months, the stock’s P/E ratio would be just 3.1x.

Finally, the company also plans to up-list to the NASDAQ after meeting new requirements on Chinese companies to remain on the OTC markets before up-listing. The new up-listing could significantly improve liquidity in the stock, as institutional investors would have easier access to buying the shares and taking major positions in the stock.

More Information

For more information, please see the following resources:

Tags: NASDAQ:ATAI, NYSE:AMBO, NYSE:EDU
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How to Play China’s Coming Turnaround

Monday, November 12th, 2012

China’s economy has taken a hit over the past couple of years, as key end markets for its export-driven economy suffered. High levels of unemployment in the U.S. kept consumer spending at bay, while the European debt crisis resulted in dramatic cuts from those markets. But now, there are some signs that fortunes may be changing in the world’s most populous country.

Industrial Production Signals Turnaround

China’s industrial production accelerated in October to 9.6%, according to the National Bureau of Statistics. The reading was higher than September’s 9.2% figure and beat analyst estimates of 9.4%, but the year to date results were still below the government’s 11% target. Chinese stocks rose modestly on the data after falling some 16% from the year’s peak amid slowdown concern.

The results drew positive reactions from many analysts and economists. Zhao Qingming, an economist at the Beijing-based University of International Business and Economics, believes that the October data indicated that China’s economy has bottomed out, but noted that the recovery will be moderate amid increasing uncertainty at home and abroad.

“The key question for investors is whether China’s economic growth has truly bottomed out,” said Ting Lu, chief China economist at Bank of America/Merrill Lynch in Hong Kong to clients in a note. “Based on October data, especially the 9.6% industrial production growth reading, the answer is firmly ‘yes’.”

The Best Ways to Invest in China’s Recovery

China doesn’t have the best track record when it comes to public companies trading on its stock exchanges, with the Shanghai index falling some 16% from this year’s peak. But the reality is that the market is thinly traded and highly speculative, driven largely by large state-owned companies that can be somewhat volatile.

Chinese stocks trading in the U.S. can be somewhat more stable, but still experience a lot of volatility, since they track companies in China. One way to gain exposure to the broad market is therefore through exchange-traded funds (ETFs), which offer diversified exposure to the country’s major companies all in a single U.S.-traded security.

The problem is that Chinese ETFs are usually heavily weighted in large state-owned companies that may not represent the key areas of growth within the country. For instance, the iShares FTSE/Xinhua China 25 ETF (NYSE: FXI) is 10% weighted in China Mobile and 57% weighted in financial companies that may not represent the country’s best opportunities.

EastBridge Offers a Great Way to Capitalize

EastBridge Investment Group Corp (OTCBB: EBIG), a provider of financial services to emerging companies looking to go public on U.S. exchanges, offers investors a great play on China’s economic turnaround. Investors can benefit from a combination of high-growth potential and diversification, since it retains equity in many of its clients as a part of helping them list.

Currently, the company has ten clients that it’s assisting in listing on a U.S. stock exchange, ranging from educational companies to luxury resort operators. And most recently, the company helped Wonder Education (OTCBB: WIEI) list in the U.S. on the OTC-BB initially, but soon the NASDAQ stock exchange, once the time requirements are met.

Surprisingly, EastBridge trades with a market capitalization of just $8.15 million, which represents just a fraction of its potential valuation. In fact, the listing of Wonder Education will result in revenue and deferred revenue of $8.5 million that will be recorded during the third quarter, which represents more than the entire market capitalization of the company.

For more information, please see the following resources:

Tags: NYSE:FXI, OTC:EBIG, OTC:WIEI
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Liberty Star’s (LBSR) Tombstone Hosts Enormous Copper Reserves

Monday, November 5th, 2012

Liberty Star Uranium & Metals Corporation (OTCQB: LBSR) is a mineral exploration company engaged in the acquisition of exploration-stage mineral properties in Arizona and Alaska with lands management considers to be some of North America’s richest mineralized regions for copper, gold, silver, molybdenum and uranium.

For the upcoming winter of 2012-2013, the company will be largely focused on its Tombstone Super Project (TSP) in Arizona, given that operations are possible year-round there.

Great Location & Jurisdiction

Liberty Star’s Tombstone property is located in southeast Arizona near some of the most prolific porphyry copper mineral centers in the world. Thanks to a large volcanic and intrusive geologic feature known as a caldera, the region has demonstrated significant potential for copper and other elements like molybdenum that are currently trading at very valuable levels.

Beginning in the late 19^th Century, mining in the region took off and helped create legendary boomtowns like Tombstone, Arizona and became home to mining giants like Phelps Dodge Mining. Arizona itself has long been a very favorable location for mining companies, with its 300 days per year of sun and business-friendly regulatory environment.

Chief Geologist and CEO James Briscoe has significant experience in the Tombstone district having worked there since 1972. In the mid-1980s, he found that earlier geologic work had erroneous conclusions and the region was in fact a large and ancient caldera. Studies over the years subsequently confirmed that the alteration associated mineralization was much more extensive than previously thought.

After realizing the significance of the deposits in the area, Liberty Star contracted SRK Consulting to prepare NI 43-101 style technical reports over three areas within the TSP, including Hay Mountain, Tombstone South and Walnut Creek. These reports confirmed the claims were worthy of further exploration and the company began technical work to determine commercial viability.

Located in a Wealthy Neighborhood

More recently, the region has seen a revival in copper mining as new technologies have enabled exploration in areas that were previously inaccessible. In 2007, Freeport-MacMoRan Copper & Gold Inc. (NYSE: FCX) purchased Phelps Dodge Mining in a $25.9 billion cash and stock transaction to create the largest publicly traded mining company in the world.

As a result of this acquisition, the company acquired the Morenci open-pit copper mine in southeast Arizona 50 miles northeast of Safford that is projected to produce some 225 million pounds of porphyry copper when enhancements are completed. Meanwhile, FCX also owns the Safford open-pit copper mine that has produced over 200 million pounds annually in the region.

The growing popularity of the region, as evidenced by the buyout of Phelps Dodge Mining and these two large copper mines, suggests that Liberty Star’s Tombstone property is also likely to hold a lot of potential. In fact, management has indicated in the past that the property could host one of the largest porphyry copper reserves in the world.

Solid Progress Over the Past Year

Liberty Star has made significant progress in developing this potential over the past year. After completing several technical reports in late-2011, the company completed an extensive geochemical survey and a review of previously gathered data, including a low flight level magnetic survey. In July 2012 Briscoe and his geological team confirmed the Tombstone caldera’s size and location, which could pave the way for additional drilling targets in the region.

In August 2012, the company announced a proposal for a helicopter-borne ZTEM (geophysical) survey covering the Hay Mountain and other lands comprising its Tombstone project in southeastern Arizona. With the ability to “look down” about 6,000 feet into the earth’s crust, the ZTEM will detect sulfides that may be associated with porphyry copper systems.

While these projects will provide more in-depth mapping, the company has also made progress on the regulatory front. The Arizona State Land Department approved the company’s application for mineral exploration permits in late-September 2012 and gave it the go-ahead to proceed with state-mandated archeological reconnaissance.

Moving forward, the company plans to obtain Phase I permitting for up to 30 potential drill sites to allow flexibility in drill placement. This permitting will be followed by the drilling of five to ten Phase I drill holes this winter. After the positive results from those holes, the company will then begin Phase II drilling that will result in more tangible data for investors.

Great Opportunity for Investors

Liberty Star represents a great opportunity for investors at its current levels, with a market capitalization of just $18 million. Successful data from upcoming ZTEM aerial reconnaissance and preliminary drilling could confirm the presence of a significant porphyry copper deposit that could become on of the largest in the region and provide a strong catalyst for investors.

For more information about Liberty Star, please see the following:

www.libertystaruranium.com

Disclosure: The subject security is a client of Emerging Growth, LLC. For full financial disclosures for all Emerging Growth, LLC clients, please visit http://secfilings.com/Disclaimer.aspx

Tags: NYSE:FCX, PINK:LBSR
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Socket Mobile (SCKT) Gears Up for a Solid Fourth Quarter

Monday, November 5th, 2012

Socket Mobile Inc. (OTCQX: SCKT), an innovative provider of mobile productivity solutions, has made a lot of progress over the third quarter. While Motorola (NYSE: MSI) and Honeywell (NYSE: HON) account for the majority of the market, the company’s innovative solutions are gaining traction among customers as new features are regularly added.

Highlights from the Third Quarter

From new software development kits (SDKs) to new customer announcements, Socket Mobile has made a lot of progress during its fiscal third quarter. The product improvements promise to help drive new customer adoption, while the new contracts could equate to tangible increases in revenues and net income for the quarter.

Third quarter highlights include:

October 29 – The company released the SoMo 655 SDK, which gives developers control over several unique hardware features of the SoMo 655 handheld computer.
October 8 – The company announced Android support for its Socket Bluetooth® Cordless Ring Scanner (CRS) 9P hands-free barcode scanner for warehousing/logistics.
September 24 – The company announced that NCR Corporation selected its Socket Bluetooth® Cordless Hand Scanner (CHS) 7Ci barcode scanner for use with its NCR Silver POS software platform for the Apple iPad that enables small businesses to management payments.
September 12 – The company announced that its stock would begin trading on the OTCQX – the premiere OTC Marketplace, which could enhance liquidity.
September 12 – The company announced that Enphase Energy incorporated its Socket Bluetooth® Cordless Hand Scanner™ (CHS) 7Xi into its ArrayGun mobile solution for solar panel installations, with more than 44,000 installations worldwide.
August 20 – The company announced that CBORD® recommends the Socket SoMo® handheld computer for use with their CS Pocket Reader, Troubadour™ card reader, and NetHIMS™ integrated solutions for campus security, sales and foodservice at colleges and universities.
August 3 – The company announced the completion of a subordinated convertible note financing of $400,000, with the company’s officers and directors being the purchasers.

Financial Results Conference Call

Socket Mobile will report its fiscal 2012 third quarter financial results at the close of the market on Tuesday, November 6, 2012 and host a conference call to discuss the results that will begin at 5:00pm Eastern Time (2:00pm Pacific Time).

Investors can access the conference call by calling 877-407-9210 from within the U.S. or by calling 201-689-8049. Replays will also be available for one week following the call at 877-660-6853 from within the U.S. or 201-612-7415 from international locations.

Investors can also access a live webcast at http://www.socketmobile.com/ConferenceCall.

About Socket Mobile Inc.

With 20 years of experience in the Automatic Identification and Data Capture (AIDC) market, Socket makes mobile computing and productivity work. The company offers a family of handheld computers and an extensive portfolio of AIDC peripherals specifically designed to increase productivity and drive operational efficiencies in healthcare, hospitality and other business mobility deployments. The company also offers OEM solutions for the mobile device market. Socket is headquartered in Newark, Calif. and can be reached at +1-510-933-3000 or www.socketmobile.com. Follow Socket Mobile on Facebook and Twitter @socketmobile and subscribe to sockettalk.socketmobile.com, the company’s official blog.

Tags: NYSE:HON, NYSE:MSI, PINK:SCKT
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