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Aytu Bioscience AYTU Stock News

Time and time again, investors get taught a valuable lesson: invest for the longer term, and gamble for the short term. In fact, statistics show that while focused investing may lead to consistent financial gain, gamblers tend to lose almost 100% of the time using that same long-term mindset. For Aytu Bioscience investors, the path to significant revenue recognition has not been as quick as some had expected, but, it’s fair to say that AYTU may have finally caught traction in a multi-billion dollar urology market, focusing on global opportunities and commercialization of novel treatments and diagnostics. Thus, those focused on Aytu’s likely long term success should prepare to ultimately get rewarded.

Now flush with a growing pipeline of products that have either been FDA-approved or provided CE marking designation, AYTU is proving that their model of growth by acquisition is beginning to produce the investor rewards some expected months ago. The AYTU pipeline, which currently includes Natesto®, MiOXSYS®, ProstaScint®, and Fiera®, is gaining the consumer and physician attention they deserve, and recent revenue numbers and forward guidance is proving that fact.

Natesto® Sales Surge

Currently, Natesto® may stand as the most opportune product in the pipeline, and if the FDA took serious notice of the deficiencies in Natesto®’s competitive landscape, it’s likely that Natesto® would be addressing the multi-billion dollar testosterone replacement market on its own. Leaving the FDA-Big Pharma conspiracy theories aside, Natesto® has proven itself to not only be best in its class but is the obvious safe choice when it comes to overall safety and efficacy in patients treating their low testosterone levels.

In fact, Natesto® remains the only topical testosterone replacement therapy not labeled with a Black Box Warning, the most severe of disclaimers that the FDA requires for approved products that may hold serious safety and risk concern to patients. Different from FDA-approved products like AndroGel® and Axiron®, which have the Black Box Warning, and are marketed by AbbVie and Eli Lilly, respectively, Natesto® provides proven treatment without the associated and known risk from AndroGel® and Axiron®. The effects of Natesto®’s competition can be severe, with the FDA citing the potential for heart attack, increased risk of prostate cancer, reduced sperm count, or in the case of an unintentional transfer of product, cause masculine traits to emerge on female bodies. Perhaps these side effects are one of the main reasons that Natesto® sales are beginning to attract market attention away from its competitors, and at the same time generating significant and noticeable top-line revenue increases.

According to the most recent sales data released from AYTU, Natesto® sales have reached all-time highs, increasing 20% between April and May, and compounded by an additional 20% between May and June of this year. Sales results should continue to track higher, especially when Natesto® has proven to be highly effective in treating and improving erectile dysfunction on all five of the measured domains, and showed dramatic and tangible improvement in the desire for sexual activity beginning in as little as thirty days from initial use.

Generating results by being the only nasally administered therapy, 91% of patients in Aytu’s pivotal clinical trial studying the safety and efficacy of Natesto® achieved normal testosterone results by day ninety of treatment. Of those treated in the twice daily dosing of Natesto®, over 70% achieved normal testosterone levels, also by day ninety of treatment. Importantly, being dosed through nasal passageways, Natesto® has also proven its method of administration to be far superior in comparison to topical treatments, with the occurrence of an accidental transfer of the TRT product unlikely and less of a concern for those who use the product on a daily basis.

While product sales have surged recently, the share price is not reacting as it should to the increased market traction. Natesto® is addressing a $2 billion market, and by grabbing just a 10% share of sales, Natesto® could bring in over $200 million in revenue for Aytu. Additionally, if the FDA was proactive and strict in managing drugs that have been proven to cause severe health issues and even death in some patients, Natesto® may indeed be in a position to grab a significantly higher percentage of the market share. But, let’s not count on the FDA to make the sales for Natesto®, as the product can do it on its own. And, the trends in place should be a signal to investors that Natesto® is beginning to seize its opportunity to garner significant market share as the only FDA-approved, nasally administered testosterone replacement therapy. With a 300% increase in Factory Sales Units expected between the Q2 and Q4 in the fiscal year 2017, an exclamation point to the momentum is certainly warranted. To put that sales number in perspective, real demand and production show an increase in sales and orders from 1,764 units sold in Q3 of 2017 to a projected 4,248 units produced for sale by the end of the company’s 2017 fiscal year. Thus, while estimates are encouraging and investors like to hear positive guidance from management, real demand trumps all, and the focused commercial effort to drive Natesto® sales has generated record sales volume for the product.

While AYTU success is accelerating on the Natesto® front, the company is creating additional and accretive support from other pipeline products, results generated from management’s forming of a strategic initiative to fully integrate into the urology and sexual wellness market. By capitalizing on strategic opportunities, AYTU is focusing on its already commercially available products and building a focused salesforce to drive prescriptions from a product portfolio that has been de-risked from both a clinical and regulatory perspective. And, when analyzing the product pipeline, each product offers significant opportunity to generate substantial revenue increases.

MiOXSYS® Now In 20 Countries

Take MiOXSYS®, for instance. MiOXSYS® is a CE marked, male infertility device that is now sold in twenty countries and used as an infertility diagnostic system. The first-in-class “in-vitro” diagnostic device is a test available to physicians who require rapid in-office screening for male infertility. The test is unique, measuring undetected oxidative stress as an added indicator to current testing and semen analysis procedures. Working to capitalize on the United States market, MiOXSYS® is currently progressing through the U.S. regulatory process toward a 510K pathway, which should provide an abbreviated and well-defined track to approval.

Potential approval and research support gets generated from multiple prominent U.S. study sites, and the expected results will not only help to identify infertile patients quickly but will also allow immediate initiation of treatment, improving the chances of a wanted pregnancy. As a device, the company intends to exploit the razor-razorblade marketing model, generating recurring revenue from its globally patented disposable sensor technology. Considering the potential for mass adoption of this intelligent device, the opportunity is significant.

Worldwide, the male infertility market opportunity is estimated to reach $4.7 billion by 2025, with approximately 80% of that total derived from outside of the United States, countries where MiOXSYS® is already on-market. In just the first half of 2017, market placement for MiOXSYS® doubled, and Aytu expects that that placement number will double again during the next twelve months. With the MiOXSYS® device placement expanding on a global basis, including countries in Europe, Africa, Asia, Australia, and the Pacific regions, the opportunity for Aytu management to exploit global commercialization is ripe. Keeping in mind that Josh Disbrow, CEO at Aytu, has already proven himself by taking Arbor Pharmaceuticals from zero revenues to over $127 million in less than five years’ time, investors should remain confident that the same pathway to substantial sales increases can be duplicated with MiOXSYS®. But, even with a successful model already in place for MiOXSYS®, Aytu offers more to investors.

ProstaScint® Is Already FDA-Approved

Remember a key point in the thesis for considering Aytu. The company is almost entirely de-risked from FDA regulatory pressure, which serves to enhance additional opportunities presented from other pipeline products like ProstaScint®, AYTU’s FDA-approved prostate cancer imaging agent.

Clinical performance for ProstaScint® has been close to perfect, returning results with greater than 95% accuracy, along with durable and positive predictive value in patients. When the ProstaScint® agent gets used in combination with either single-photon emission or computed tomography, the accuracy in cases of profiling high-risk patients with Gleason levels of 8-10 provided results of between 95.7% and 100% when evaluated for accuracy, sensitivity, and positive predictive value. Now, with both SPECT and CT routinely made part of a prostate examination, Aytu believes that the results generated by ProstaScint® offer a compelling case for use in clinical evaluation, and is strategically adding the product to the sales team’s arsenal of marketable therapies.

The opportunity is, once again, significant. The global prostate cancer drug market has grown beyond $7 billion in 2016, up from only $2.5 billion in 2011. With an estimated ten drugs either in late-stage development or commercially available, the market is looking for reliable screening alternatives that can catch the disease in its earliest stages. The issue is serious, with prostate cancer identified as the second most common form of cancer in men, with an estimated 240,000 new cases reported each year. When diagnosed early, performing a prostatectomy in combination with radiotherapy has resulted in virtual five-year survival rates in patients 100% of the time. However, that’s in the cases where cancer gets identified in the early stages. Poorer diagnosis and screening lower five-year survival to just 37% in patients, demonstrating the importance of having reliable and sensitive measures in place to detect prostate irregularities. So, it’s not a matter of “if” the market needs an agent like ProstaScint® to accentuate the results, it’s more a question of how the Aytu sales team can effectually manage its multiple market opportunities to drive sales.

In a nutshell, the “so-called” issues facing Aytu growth are not problematic at all. With four products either in the pipeline or already commercially available, building its salesforce takes time. Each product has multi-billion dollar potential, and each requiresit’s the company’s dedicated team of professionals to drive those opportunities. So, for investors, the short-term growth pains that have stagnated the share price may, in time, generate exponential returns as the company continues to implement its marketing plan. But, Aytu’s strategy to drive growth and value opportunity does not stop at the three products already discussed. A fourth has emerged, and its future is just as promising.

Fiera® Added To Aytu’s Product Arsenal

The first products in the Aytu pipeline were, for the most part, designed to assist men in either sexual dysfunction symptoms or with cancer screening. However, expanding on its opportunities to grow through acquisition when appropriate, Aytu purchased Nuelle, Inc, on May 5, 2017, acquiring the rights to Fiera® in the process.

Developed by Nuelle, Fiera® was born out of thorough and significant clinical evaluation and validated by extensive consumer research. Already commercially available, Fiera® is gaining attention from the over 43% of women that have identified as having one or more sexual concerns. And, the market is substantial, with an estimated 53 million women in the United States alone meeting the clinical criteria as having sexual dysfunction issues.

Fiera® is the first pre-intimacy device proven to increase sexual desire and arousal in women, utilizing two clinically validated technologies of suction and stimulation to enhance blood flow to areas of the vagina that induce sexual interest and desire. Fiera® has generated highly favorable reviews, and in almost 90% of all responses, females expressed that the mood for sex, the enjoyment of sex, the looking forward to sex, and the excitement about sex improved significantly. An additional set of responses favored Fiera® for its ability to generate enhanced sexual intimacy, heightened orgasms and pleasure, and a greater feeling of arousal.

As is the case for each of the other products being developed and marketed by AYTU, Fiera® offers substantial market opportunity. The global market for female sexual dysfunction is increasing at a significant pace, and the awareness of having options available to address the issues is growing accordingly. Because of the technological advances and research capabilities, North America dominates the current female sexual dysfunction market. However, markets in countries throughout Asia and Europe are quickly developing, and are expected to create meaningful opportunities in the next several years. The growth rates of female sexual dysfunction should continue to bode well for AYTU, as Fiera® is already on the market and is targeting the estimated $4 billion market that continues to grow. Now with Fiera® in hand, Aytu can take advantage of the exploding market potential outside of the United States, noting that Fiera® is the only scientifically validated, with clinical device to contribute to decreasing or eliminating sexual dysfunction measures in women, and the only to improve pre-intimacy sexual desire.

How Aytu Bioscience Brings It All Together

Although Aytu has the ingredients in place to deliver exceptional growth, it will take vision, strategy, and focus to deliver tangible results. Led by an experienced management team and an independent BOD, Aytu is proving its capability to achieve their desired results. Although the share price is not reflective of the inherent value of the company, the track record of the leadership team has been shown to be reliable, as Natesto®, ProstaScint®, MiOXSYS®, and Fiera® are already commercially available in worldwide markets. Since the launch of Natesto® in August of 2016, quarterly sales have continued to increase, and the product is supported by a fully developed commercial infrastructure.

To capitalize on the opportunities presented by both ProstaScint® and Fiera®, the company is building its professional sales presence in the U.S. and is further developing its distribution channels to take advantage of an increasingly global market. The opportunity held by MiOXSYS® is also compelling, and any company would likely be able to realize serious potential from that product alone, but for Aytu, it’s only one piece of a well-defined and niche oriented product portfolio.

According to management, the strategy is in place to continue to acquire late-stage urology pipeline products that can be quickly accretive to company revenue and asset growth. Enhanced by patent protection, the vision to build upon its income generating base of treatments not only provides an opportunity for proper valuation multiples to be applied but creates an asset base for a future strategic opportunity. Aytu sports a team of sixty employees, and with forty dedicated salespeople in place, the focus on developing product sales and opportunity has moved to the forefront of the business. Concluding a bolstering of its sales force several months ago, Aytu is lean, focused, and determined to deliver shareholder value in the near term.

The current market cap of less than $6 million borders on ridiculous for a company that has four products commercially available and entirely de-risked from a regulatory perspective. And, with only 16.4 million shares currently outstanding, Aytu has capital leverage and availability to add to their portfolio should an attractable acquisition candidate emerge. Insider ownership at roughly 20% of the outstanding shares also works to align insider interest with that of the retail and institutional holders, thereby magnifying the allegiance to increase shareholder value in an accretive and non-dilutive manner when appropriate. With a product arsenal that is growing at a significant pace, and with plenty of product adoption still available to the company, Aytu, at these levels, deserves serious investor attention. As long as investors recognize that an investment into Aytu may take a quarter or two to develop fully, the ultimate reward may pay significant returns, especially once all four of its products begin to absorb substantial market attention.

In a market that teeters on volatility, staying course with a company like Aytu Bioscience, which has significant assets available for commercial market penetration, may prove to be far less risky than many perceive -and the opportunity, especially at currently depressed prices, may be ripe for the taking.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. Hart Partners paid CNA Finance $3,500 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to Aytu Bioscience by CNA Finance. All information researched and provided through any article associated with Aytu Bioscience and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

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Mirage Energy MRGE Stock News

With the revival of the oil and gas exploration industry, it’s no secret that many emerging companies are finding innovative and economical ways to extract the precious minerals from the ground. What was once a game for the oligopolist giants in the industry has become a far more level playing field, allowing small and emerging companies to utilize innovative and inexpensive synergies that offer great opportunity to capitalize on either production or storage initiatives.

What hasn’t changed, though, is that the oil and gas exploration business is still a boom or bust prospect. But, even so, the rewards for success can be a thousand times greater than the loss, and opportunity is ripe for the taking on a global scale. And, speaking of the global opportunity, a particular company is putting the pieces in place to undertake one of the most ambitious multi-billion dollar mid stream projects ever to be constructed in Mexico, and you’re entitled to an introduction. Meet Mirage Energy Corporation.

Now, what MRGE is working to put in place is no run of the mill project. In fact, the uber-ambitious plan being spearheaded by longtime oilman, Michael R. Ward,won’t require his company even to purchase a pump, or use 3D seismic technology, or utilize any of the new innovative instruments that some companies are using to hedge their bets and stay away from dry holes. No, MRGE wants to do something far less risky…they simply want to store natural gas product for their customers. And, since natural gas is continuing to be brought to the surface for sale to an increasing marketplace, MRGE’s business strategy is likely to be met with strong demand. What should make the project more enticing to investors is that MRGE is attempting to do what no other company has ever done before in Mexico, and once implemented, has the potential to return to the company a billion dollar payday. Even better, the project can be duplicated by MRGE throughout the country of Mexico.

The project is expensive, but with creative financing options, MRGE expects to place the first underground natural gas storage facility inside the Mexican borders within the next eighteen months. To accomplish this aggressive pace of construction, MRGE needs permits, and it’s assuring to note that MRGE has nearly all of the permits ready to file. And, with these allowances lining up for project commencement in late 2017, MRGE’s historic project may reap enormous benefit from its almost three-quarters of a billion BCF gas storage unit that producers have shown tremendous interest in using. So much so, that MRGE has told the markets that the completed storage unit is expected to be fully leased based on current interest.

The project isn’t simple, but the company is well on their way to fulfilling their objective by taking advantage of strong relationships within the Mexican regulatory agencies and from expertise provided by a host of reliable and well-respected industry contractors. If all plays out according to plan, MRGE is expected to have the project completed by late 2018 – and, here’s how the project should flow.

What’s in the Pipeline?

Before we get into the details, allow me to provide a summary of what the company plans to do, and why it has the potential to return a huge profit for investors. As stated earlier, MRGE intends to construct a massive natural gas storage facility in Mexico, allowing the company to provide a much-needed service to producers and suppliers of natural gas. The project is scheduled to construct an initial underground storage field, with capacity set to house 52 BCF of natural gas in the first phase of the project. Upon completion, storage capacity is expected to house roughly 786 BCF, making it one of the largest natural gas storage facilities of its kind. The scope of the project provides for an integrated pipeline that can transfer and store natural gas for any entity willing to pay the storage fee, making it both accessible and available to any production or supply company. The transmission pipelines, which deliver the gas, are being designed to add 800 mmcf per day into Mexico. This increase is necessary because currently less than 70% of Mexico’s consumption of natural gas is produced in the country, making the market unstable and potentially prone to disruption for its infrastructure requirements. What MRGE is looking to do, besides creating significant shareholder value, is to provide a means for Mexico to secure itself with energy security and stability by allowing for reserve replacement and price effective marketing.

The MRGE project should pique the interest of those with an understanding of Mexico’s current economic climate, as the country’s government is working to improve self-stability and growth in the wake of rising US import costs. Fearing a dependence on US natural gas imports, Enrique Peña Nieto, the president of Mexico, has passed eleven national reforms to strengthen the country’s self-sufficient capabilities. Mexico plans to invest over 170 billion pesos (roughly $9.6 billion USD) into over 10,000 kilometers of new pipelines during the next few years, a plan designed to accommodate the country’s continuously increasing supply of natural gasses. Projections site that natural gas needs are expected to rise to 10,400 million cubic feet (mcf) in 2025 from the current 5,700 mcf. With all this in mind, investors should be able to see that projects focused on natural gas opportunities in Mexico are ripe for the taking, and MRGE has entered the sector at a fitting time.

Now, MRGE may have taken on an ambitious strategy to build this facility, but the company management does have the skill to back up their plans. The company’s President and CEO, Michael R. Ward, has over 45 years of experience in the oil field and has laid down a solid foundation for the upcoming years at Mirage Energy Corporation. Well in the process, MRGE is close to securing all necessary permits through Mexico’s regulatory agencies for natural gas storage and expects to receive final approval to begin construction by the last quarter of 2017. Already, MRGE has been steadily acquiring the required documents to file by working through the administrative procedures with CNH, CENAGAS, SENER, and CRE, the governing oversight which all play a crucial role in granting permission for the project to commence.

The company has also already started work on structural procurement and plans to continue doing so for the next few months. Of course, the process of building a natural gas storage facility requires a substantial sum of cash, and CEO Michael R.Ward has already set numerous plans in motion to help MRGE secure an adequate supply of funding to realize the company’s goal without any unexpected setbacks. For example, the company is likely to see funds coming in through new partnerships or working interests that may become likely later in the construction schedule; Ward has even spoken about laying off some of his ownership of the company as collateral should it prove necessary.

Start-Up Plans In September of 2017

Construction, estimated to commence in September of 2017, is the next step in MRGE’s playbook. The company has selected six preferred contractors and is in the process of negotiating the most beneficial contract to maximize profit. Each contractor that MRGE has engaged is experienced and well-respected in the business, specializing in pipeline and industrial plant construction. Exterran, one of the company’s top choices, is well known as a premier contractor in the industry. Headquartered in Houston, Texas, Exterran offers solutions to nearly all of MRGE’s construction needs, from the pipeline to the facility. Arendal, another preferred contractor to MRGE, is a respected contractor headquartered in Monterrey, Nuevo León. Having participated in over 63% of pipelines built in the last ten years, Arendal is committed to developing Mexico’s energy infrastructure through their construction of pipelines, industrial plants, and other civil works. Along with these two companies, MRGE also has a slew of subcontractors, and other vendors to choose from should additional services prove necessary. However, regardless of who MRGE continues to work with, the options in place provide confidence in allowing the company to complete their project plans in line with their aggressive schedule.

Clearly, Mirage Energy is a small company with massive plans, which is a combination that may raise the eyebrows of many investors. But, as shown by their detailed timeline and already considerable progress, MRGE knows what they are doing, and are dedicated to action. And, if everything continues to fall into place for MRGE, profit for the company and investors could be substantial.

Ambition Plus Demand Equals Enormous Potential

Taking the sum of the parts, the project by MRGE may seem mighty ambitious for a small company. But, in actuality, MRGE may have found the right niche, the right country to pitch the plan, and a customer base that is eager to use the facility. Investors who failed to recognize oil field ingenuity have lost many historic paydays, and not taking MRGE seriously may again lead to missed investment windfalls. No, this deal is not a sure thing, but, investors who have been around for awhile have learned to not judge an investment from its name only, but to look beneath the surface of a deal to see hidden opportunity that can return gains along the way.

Perhaps that is what is intriguing about this deal. With MRGE already well into the licensing process in Mexico, the company opens itself up to partnership opportunity from much larger players that join the vision and understand the potential of the completed project. Keeping in mind that this is only the first storage facility planned, the revenue opportunity can grow exponentially when accounting for potential future development. With company management having the ability to make deals and incorporate creative ways to finance the project, chances lay in favor of MRGE completing the storage project. Once done, it becomes a cash cow, and managing a facility has far less risk than owning a rig, pump, or a fracking drill. All in all, investors who believe that MRGE can raise the capital, either through partnership, leverage, or capital raises, should find an investment into MRGE a potentially lucrative opportunity. For those who usually watch from the sidelines, the view may get somewhat frustrating, especially when pieces of this project begin to come together in a meaningful manner.

Avoiding ambitious projects remains a mainstay to investors with a conservative investment style. However, for those who keep a portion of their investment dollars set aside for high-risk, high-reward opportunities, MRGE may be the ideal candidate to deliver exponential gains. But, as with all investments, only risk what you can afford to do without, and always stay apprised of news and company developments. With the MRGE project set to undertake multiple phases before completion, investors can expect to be kept informed on project milestones, allowing for accretive gains in shareholder value along the way.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. World Wide Holdings paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to Mirage Energy by CNA Finance. All information researched and provided through any article associated with Mirage Energy and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

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Interpace Diagnostics Group Inc IDXG Stock News

Those who have undergone surgery understand the hardships that come along with it – the lengthy hospital visits, the meticulous recovery processes, and the debilitating side effects that can significantly interfere with a patient’s daily activities. Not to mention, it’s no secret that these procedures are extremely costly even with insurance, and can be financially devastating to a patient who requires these services. Unfortunately, the medical industry is just that, an industry, and making a profit is just as much of a goal as providing care to patients. Additionally, many diseases can be difficult to diagnose, yet wreak havoc if left untreated. Take all of this into consideration, and one can see why it’s not uncommon for a patient to undergo a long, expensive, and potentially unnecessary process at the quick recommendation of their doctor, when a simpler solution could have been discovered before treatment even began. Enter Interpace Diagnostics (NASDAQ: IDXG), a company that has set out to provide personalized medicine that helps patients receive the right treatment, and at the right time.

The Importance of the IDXG Platform

Rather than providing the treatment itself, Interpace Diagnostics is a company focused on the diagnostics. In the medical world, there is often little time for patients to wait around while a condition continues to worsen, and doctors, needing to assist these patients as soon as possible, often greenlight inappropriate and expensive procedures despite having inconclusive data on the patient’s potential diagnosis. Moving forward with these indeterminate results can lead to unneeded or even wrong practices including unnecessary surgeries, which can result in taking money and resources from both the patient and the care provider as well as misdirecting therapies by the physician. Sensing a need to remedy this issue for the benefit of patient and industry alike, Interpace Diagnostics provides molecular diagnostic tests and pathology services at a time when current first line assessments of cancer are simply not able to determine the nature and extent of cancer. The Interpace Diagnostic assays for both thyroid and pancreatic cancer can paint a much more accurate picture not only of the patient’s current condition but also of the patient’s prognosis to deadly metastatic cancer, thus in turn assisting doctors to recommend the most beneficial treatment at the right time and delivered to the right patient. Not only does this allow the patient to receive only the necessary treatment for their condition, but it can also potentially prevents them from spending thousands more on a follow-up procedure due to a misdiagnosed ailment. These ideas are reflected in numerous statements from industry associations, with groups such as the American Thyroid Association and the American Society for Gastrointestinal Endoscopy recommending the use of molecular diagnosis in cases of indeterminate results. In addition to the health and financial advantages, IDXG faces much less risk than companies focused on drug development, enjoying lower developmental costs and a quicker path to the market. IDXG’s emphasis on discovering a precise diagnosis is something that can be appreciated by all parties involved, and investors should respect the robust portfolio the company continues to build.

IDXG Product Portfolio Serves Billion Dollar Potential

With three products on the market and a potentially lucrative fourth being prepared for a 2017 roll-out, IDXG has already built a powerful portfolio of molecular diagnostic products. The first of the three is PancraGEN®, a fully-integrated molecular pathology test designed to identify the risk of pancreatic cancer progression. Pancreatic cancer is the third most deadly cancer in the United States, with a five-year survival rate of only 7.2%, meaning a quick and accurate diagnosis is absolutely essential. In fact, clinical trials have shown PancraGEN to be significantly effective at identifying potential progressors to metastatic cancer in cases where biopsy results are indeterminate; meaning at a very early stage. While the 2012 Sendai guidelines are quick to recommend surgery due to the disease’s aggressive tendency, PancraGEN allows pathologists to have a better understanding of the risks at hand. With over 30,000 tests already performed in over 250 hospitals around the world, IDXG is enjoying continuous adoption and growth of their product. Most importantly PancraGEN is virtually the only product in this market currently and today that market is estimated to be in excess of $300 million. Along with PancraGEN, IDXG also has two products on the market designed to diagnose thyroid modules by identifying the possible signs of thyroid cancer: ThyGenX® and ThyraMIR®. An estimated 726,646 people in the US were living with thyroid cancer in 2014, and according to the American Cancer Society, an estimated 56,870 new cases of thyroid cancer have been diagnosed in 2017. Additionally, up to 18 million US adults have been plagued with thyroid nodules, which can carry the potential to lead to thyroid cancer if left untreated. Similar to PancraGEN, ThyGenX and ThyraMIR aim to eliminate the risk for unnecessary procedures stemming from indeterminate biopsy results. When used together, ThyGenX and ThyraMIR have been clinically shown to provide more accurate and detailed results of both ruling in and ruling out cancer, than the current market leader, Afirma, allowing doctors to prescribe the necessary treatment with confidence. Like PancraGEN, IDXG’s thyroid-focused products have also seen strong support from medical leaders, boasting a partnership with LabCorp and use by over 400 hospitals and physicians. The market for ThyGenX and ThyraMIR is also estimated to be in excess of $300 million with only a small number of competitors.

Finally, there is one more product in the pipeline at IDXG that deserves serious attention: BarreGEN®. BarreGEN is a molecular diagnostic test developed using the same platform as PancraGEN, to analyze the risk of esophageal cancer in patients with Barrett’s Esophagus. Investors should take note because there is massive potential in the market waiting to be realized by a product that may preemptively and accurately assess this risk. Barrett’s Esophagus is a condition in which the original tissue lining one’s esophagus is replaced with a tissue similar to that of the intestine. There is a small risk of Barrett’s Esophagus leading to esophageal cancer, which, like pancreatic cancer, is known to be one of the most lethal cancers in the world. Currently, no tests can predict whether a patient’s condition will lead to this disease, and IDXG is in the enviable position to fill that need. With over 3.3 million adults undergoing endoscopic screens annually, there is an estimated $1.5 to $2 billion market for a product like BarreGEN. BarreGEN began its Clinical Experience Program in September of 2016, and like IDXG’s other tests is designed to reduce the overall cost of care by providing an accurate diagnosis that quickly allows for the necessary and correct treatment. As stated earlier, the market is begging for a product that could help doctors accurately identify the risk of progression of Barrett’s Esophagus patients progressing to esophageal cancer, and since IDXG is already begin to prepare for its roll-out BarreGEN this year, IDXG’s current share price is in no way reflective of the substantial potential it could bring to the table. Clinical trials have demonstrated strong reliability in the test, and a successful launch of the BarreGEN product would almost certainly give this undervalued stock the attention it rightfully deserves.

A Company Transformed

From a financial perspective, IDXG has never looked better. The company has transformed itself mightily during the previous 18-months, boosting its balance sheet strength and increasing shareholder equity to roughly $24.5 million in the first quarter of 2017, a near 276% increase.

Revenue growth has been spurred by the recent reimbursement agreements from major insurance carriers, contributing to year-over-year revenue growth of 39% during the 2015-2016 fiscal accounting periods. Not only has revenue increased substantially, but IDXG also eliminated all outstanding debt, royalty, and milestone obligations from a 2014 asset purchase, and has raised approximately $26 million since the third quarter of 2016. Although growth is apparent and appears to be gaining momentum, investors were not treated to formal revenue guidance during the most recent conference calls, likely due to the complex accounting and receivables recognition associated with healthcare reimbursement. However, investors should not assume that the team lacks visibility or robust opportunity in the near term, especially when taking into account the company’s emerging financial strength and product adoption rates.

At the end of June, the company reported a cash balance of approximately $13 million, which is significant in that IDXG had slashed its operating overhead by approximately $30 million a year since 2016. Thus, with a cash burn rate churning at just $500K per month, IDXG is well positioned financially to proceed aggressively in driving revenue-generating opportunities for its broadening diagnostic platform. Now trading at less than a dollar per share, the company appears to be significantly undervalued, especially when investors consider that the business has no debt, at least two years of operating capital without including new cash flow, and has non-trading warrants that can bring an additional $21 million of cash to the company. Assuming all the warrants get exercised, IDXG will have an outstanding share count of approximately 36 million shares. What investors should find attractive about the warrants outstanding is that they have no cash value and do not trade on the open market, which dramatically reduces the financial overhang often associated to open warrants, as investors hedge stock positions utilizing arbitrage trading strategies.

As of now, however, IDXG has just 18.68 million shares outstanding, and the company is well placed to take advantage of the opportunities recognized from the adoption of the diagnostic portfolio. The IDXG product line address a combined market potential of more than $3 billion when accounting for successful market penetration of its PancraGEN, BarreGEN, ThyGenX and ThyraMIR diagnostic solutions.

At current prices, the case for investment is compelling.

IDXG Makes A Case For Itself

There are times when investors need to be told the story of a compelling stock, and then there are the cases where a stock can provide its own measure. IDXG is one of those companies that can let its accomplishments speak for themselves.

Too many investors make the mistake of lumping all sub-dollar stocks together, passing over the potentially lucrative opportunities that may be at hand. IDXG is far from typical, and for that matter, is differentiating itself from those that rightfully trade at sub-dollar levels. So, to not acknowledge that IDXG is far different from the others at its current price level may prove to be a terrible mistake – and, here’s why.

While a large number of companies trade at levels similar to IDXG, few can boast of having at least two years of operating capital in the bank, no debt, and a fully-diluted share count of less than forty million. Add to that a product portfolio that has already proven to be a necessary and much-needed addition to the healthcare industry, and the recipe at IDXG leads to success. The IDXG diagnostic products are not only necessary, but they should also be a requirement that the insurance industry puts in place to stop the unnecessary and often life altering events associated with surgical procedures that prove to be unwarranted. With IDXG products used as validating tools, not only can hundreds of millions of dollars of healthcare cost be saved, but countless numbers of lives may be spared the burden of surgical procedures that should never have been performed. But perhaps most importantly is that IDXG differentiates itself by not being just a sophisticated molecular diagnostics company. IDXG differentiates itself by being a provider of personalized medicine and IDXG is first and foremost a commercial company of over 20 sales reps that has sophisticated customers and provides sophisticated solutions. Once a company has the confidence of its customers at the highest levels the opportunity to commercialize other products may be significant.

And then there’s the fact that IDXG is addressing a multi-billion dollar industry, and is well positioned to capitalize from a partnership, licensing, and merger opportunity. Obviously, there is interest in what the company is doing, proven by successfully raising over $14 million in just the last six months. Insurance companies also realize the benefit, and the momentum of reimbursement inclusion is gaining momentum.

At roughly 90 cents a share, with sufficient cash in the bank and a diagnostic product line that can save both lives and money, IDXG becomes a compelling case for investor consideration. Markets often play catch-up and remain inefficient when pricing emerging companies. Retail investors are typically the last to know of businesses that bring transformational products to market. It’s true again, in this case, demonstrated by the fact that IDXG has raised substantial capital, eliminated all debt, and is positioned to generate exponential revenue increases in the coming quarters. Obviously, big money is already onto the story.

In this case, however, retail investors don’t need to be the last to know, as long as they pay attention to what IDXG is revealing to the market and respect the progress made on multiple fronts. IDXG may very well be a break-out winner in 2017. The next few quarters may spur a new chapter in the evolution of this promising company, but it may be just a small addition to the IDXG story that is only beginning to unfold.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. World Wide Holdings paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to Interpace Diagnostics Group by CNA Finance. All information researched and provided through any article associated with Interpace Diagnostics Group and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

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U.S. Cobalt USCO Stock News

US Cobalt Inc (CVE: USCO)

More often than not, investors remain oblivious to many of the most promising investment opportunities of the times. Unfortunately, even the most obvious of opportunities can get overshadowed by hot news stories or over-hyped achievements, leaving the most opportune investments unnoticed or ignored, even when the markets associated with that trade are ripping higher. (OTC: SCTFF) (USCO.V)

For some investors, too much time is spent focusing and investing on the media hype, placing stakes in the covered companies that often are involved in some six-degree financial association with the network or its affiliates. While those investors rely on the self-professed wisdom of the talking heads, the astute investors look elsewhere and work hard to find the emerging companies that are primed to deliver substantial gains. For the fast buck investor, following the smart investors take more time and diligence, so for the most, taking the natural approach and listening to paid commentary is their quickest means to compile investment ideas. But, while following the herd can lead to returns if the timing is right, it’s the investors that find and take advantage of emerging companies and markets that usually realize the greatest gains. And, that’s the style that my team follows.

The world we live in is evolving rapidly, and understanding where the direction is leading plays just as important of a role as knowing where we are standing today. In that respect, while returns get made from investments that focus on traditional commodities like gold, silver, and oil, they leave out the obvious that will undoubtedly play an integral role in the future of the worldwide economy. And, this multi-billion dollar opportunity is summarized in a single word: Cobalt.

Cobalt is a tradeable metals commodity as are the precious metals. However, unlike gold and silver, which have both industrial and aesthetic value, cobalt has quietly positioned itself to become one of the hottest and most sought after industrial use products of our generation. While understanding the significance of cobalt itself is important, investors also need to focus attention to where the opportunities to profit from cobalt-related investments exist. Finding potential in unknown or emerging companies, and then taking appropriate action to capitalize on that potential is vital to investment success. And, as it stands, investors have a unique and almost ground floor opportunity to seize an opportunity in the cobalt related trade that can potentially deliver superior investment results. That’s why when the time came to find a company that is well-positioned to take advantage of the spiking, global cobalt market, smart investors were led right into the corner of U.S. Cobalt Inc (USCO.V) (OTC: SCTFF).

Acting On Cobalt Opportunity Now

It’s no secret that I spend a good amount of my investment research time trying to find and introduce emerging companies that have positioned themselves to generate substantial growth in the near term. When the idea of investing in cobalt attracted my attention, I began to dig into the matter and found U.S. Cobalt, an emerging, and stable company that trades under ticker symbol USCO. From what the company has told the markets, many investors believe that USCO is not only undervalued but is simultaneously positioned to capitalize on and command a significant portion of the rising demand in the cobalt market.

Now, many may still be wondering: what is the primary use of Cobalt? Although most people may now know that the sought-after metal is a critical component in the making of rechargeable batteries utilized by the likes of Tesla, Apple, and Samsung, they may not be aware that cobalt demand is also growing in several additional high-profile industrial markets. The diversified cobalt demand story becomes more compelling because even though most investors are well aware of the growth in the EV market, few are paying enough attention to the enormous need of cobalt to serve the rechargeable battery market that serves a tremendous number of products in the technology and services sector. These industries will need tons of the metal just to keep pace with the current demand of new devices and products.

U.S. Cobalt Inc. has risen to the top of the focus list at many investment desks, not only because of its growing asset base, but because of the leadership team that is heading the charge toward capitalizing on this billion dollar market opportunity. Led by Wayne Tisdale, an incredibly successful investor who has delivered over $2.5 billion to investors through his recognition of undervalued opportunities, USCO is one of the few North American companies positioned to become a significant contributor and supplier of cobalt to the market. At USCO, recognizing the opportunity is only the first step; acting on that opportunity is the critical component. The progress that is gaining momentum at USCO originates from the fact that the leadership team is acutely aware of industry trends, the need to acquire and develop the right assets, and the necessity to surround themselves with a team of professionals to guide the company forward in an aggressive but orderly fashion.

Following alongside Wayne Tisdale may not be a bad idea, especially when investors account for his track record of success. In 2015, for instance, he helped start a company named Pure Energy to take advantage of the spiking lithium market that was then pricing the metal at roughly $5,000 per ton. Getting in early paid off, as lithium prices skyrocketed to over $23,000 per ton within the next two years, providing Pure Energy with substantial gains in share price. The spike in prices did more than just allow Pure Energy and its investors to reap the benefits – the price increases triggered a modern day rush to create new lithium companies, which drove prices well upwards of 1000% higher in some markets. The price of lithium went up for a couple of reasons. First, the mad dash to get into the market caused investors to speculate on increased price traction for the product. Second, and more applicable to the case of USCO, prices skyrocketed because investors understood the importance of the metal in the EV market. Now, USCO believes that a similar bull case, which follows the lithium dynamic, can be made for cobalt.

The good news for investors may be that the demand of industrial-grade cobalt may still be an under-the-radar proposition to many traders, keeping the metal’s prices relatively tame with increases of only 20%-30% during the past 6 months. While those gains are respectable, they remain in sharp contrast to what lithium did, and the USCO management team believes that significant profit potential is for the taking, which is why they are by taking swift advantage of a cobalt market that is expected to grow significantly during the next few decades. Not all investors are naive to the massive demand increases that the cobalt market is experiencing. Several investment funds, including Pala Investments and China’s Shanghai Chaos, have been active in the market, purchasing and storing the metal as both a speculative and market driven strategy, amassing an estimated 6,000 tons of cobalt during the previous five years that now has an estimated market value more than $300 million. Thus, while the cobalt market has been relatively tame regarding price increases, it is only a short matter of time before those that control the major stockpiles make it a media buzzword and start the bidding wars.

The USCO Difference

For those that do some research on the uses for cobalt, it’s apparent that the market is growing rapidly. But, it’s up to investors to discover which companies are best positioned to deliver substantial returns on investment. With an estimated 60% of the global cobalt supply coming from the Democratic Republic of Congo (DRC), investors need to understand that an undercurrent to that DRC supply chain finds itself mired in what numerous reports cite as “unethical” production. Child labor issues are only one aspect of the DRC product. Complaints of worker death and almost slave-like conditions are reported and documented by Sky News and The Washington Post. Similar to “blood diamonds’, the industry is beginning to take sharp notice of the inhumane treatment at these mines, and companies like USCO are attracting increased interest for the need of a viable alternative to purchasing DRC product. Despite higher prices, companies like Tesla, Panasonic, Renault, and other significant users of cobalt have no choice but to take notice of the market and focus their trade to companiesoutside the DRCwhich provide premium grade cobalt while at the same time using ethical mining practices. Perhaps with so much attention now being directed toward the labor practices in the DRC, companies may have little choice but to accept the fact that inexpensive cobalt produced at the detriment of human life is becoming less of an option. With activist groups scrutinizing the markets and business practices of both publicly traded and private companies, supply choices may become a public issue and a potential liability to companies that support unethical mining.

The USCO difference is far more robust than just ensuring fair labor practices. The company is buildingan asset baseto help address a market which is expected to be substantially larger than both solar and wind power alternatives. Noting that solar and wind have production and storage limitations depending on the climate conditions,lithium0ion batteriesare relatively immune from such disruptions. With cobalt being an essential component that allows batteries to store energy, its use in batteries is diversified with applications in the home, automobiles, electronics, and recreational markets. See, it’s not just EV manufacturers, it’s a vast market that has an almost limitless use. As the debate about the use of fossil fuel continues to take center stage on a global scale, the interest in rechargeable batteries continues to grow and gain market acceptance as a reliable and efficient alternative to hard burning fuels.

As an exploration company, USCO is intent on securing assets thatwill allow them to contribute production-grade cobalt to the market. Although the rechargeable battery market has now grabbed almost 50% of the market share for available cobalt, the metal is also essential in supporting the production of magnets, pigments, super-alloys, and use in pneumatic systems. The industrial attraction to cobalt is enhanced by the metal’s high melting point of over 1495°C, which makes it ideal for industrial applications due to its ability to retain strength at extreme temperatures. Hence, the demand and market for cobalt are expected to experience exponential growth due to the relatively limited supply of cobalt available. Certainly, the supply/demand issues bode well for USCO.

Although not provided much attention, demand for cobalt has already exploded, withover 100,000 tons mined and sold in 2015 to a current market that is approaching 200,000 tons of demand. Estimates point to continued demand growth, with anticipated demand to eclipse 500,000 tons within the next fifteen years. As investors know, demand spurs price, and when supply is limited, it often causes a market frenzy. Additionally, with no sign of a workaround when it comes to using cobalt in producing rechargeable batteries, USCO may be positioned to benefit for decades from their current production projects.

In fact, as the demand continues to rise, production is not keeping pace. Historically, cobalt forms alongside copper, and due to depressed copper markets, the mining operations have been slowed or even stopped entirely as production cost outweighs the market price. In turn, an estimated 10% of worldwide cobalt production is currently offline, making USCO’s positioneven more valuable.

USCO and Iron Creek

The need for cobalt is attracting worldwide attention, and production in the United States currently only accounts for less than 1% of global supply. Other than the DRC, which claims over 50% of the 2016 total production of 124,000 tons, the combined production from China, Canada, Russia, Australia, and the United States account for less than 24% of last year’s total output. Thus, noting the issues facing the DRC product, USCO’s opportunity is strengthened, and they are taking advantage of the opportunity in the Cobalt Belt, located in the United States.

Recognizing inherent production value, investors are looking to USCO’s Iron Creek Cobalt Project. . Located in Central Idaho, the USCO property spans more than 1600 acres of both patented and unpatented claims. Although historical claim assessments on the property should not be relied upon as currently accurate, Historical, non 43-101 compliant reports show the project has the potential to yield over 1.3 million tons of .59% cobalt. The USCO claims, located in the Idaho Cobalt Belt, were first discovered in 1940 and served as both an iron and copper producing mine. Explored and mined vigorously, the exploration area encompasses over 30,000 feet of deep diamond drilling and an additional 1,500 feet of completed underground drilling done previously.

USCO’s initial drill program is targeting high-grade underground cobalt which previous non 43-101 compliant reports indicatemore than one million tons of potential reserves grading .59%. The second region istargeting 229,000 tons ofsimilar grading material. Increasing the value, the historical grade of the projectis higher in quality compared to many other cobalt mining projects in North America.

The focus toward EV production is taking center stage. With companies like Tesla, Ford, and General Motors being forced to look for alternative sources of cobalt due to the controversies of DRC production, many are needing to make proactive decisions as to how to best secure cobalt with minimal production disruption. Tesla’s first Gigafactory, for instance, will require between 5,000 – 10,000 tons of cobalt annually once it begins to operate at full capacity. But, this cobalt requirement is only Tesla’s need, so USCO investors should embrace the fact that a significant number of additional manufacturers will be scrambling to ensure substantial cobalt supply. Because of the potential run for the metal, the cobalt market should see its deserved rise, especially if these same companies increase production or begin new projects that require the use of rechargeable battery powered vehicles or products. The lack of potential supply then begs the question, where will the supply originate?That is what USCO is banking upon.

As the USCO story unfolds, it’s apparent that USCO is well positioned.While the historic resource assessments of the Iron Creek project is reported to be roughly 1.3 million tons, USCO believes that the property may contain upwards of 10 million tons, which would make the market cap of USCO ridiculously low. In fact, even at the historical assessment level of an estimated 1.3 million tons, the current market cap of USCO is arguably significantly undervalued. Taking into account that USCO is fully funded to complete their entire 2017 exploration program, and the valuation becomes even more ridiculous. The mispricing is even more conspicuous when USCO gets compared to a company like eCobalt, who operates a property that is only twenty-fivemiles away from the Iron Creek project but sports a market cap of approximately $170 million, trading in a range of between 46 cents and $1.48 per share. For some reason, the markets have provided eCobalt with a substantial market cap premium that is roughly 385% higher than that of USCO. However, many believe that the valuation disparity will soon correct itself, and USCO will close the gap to the upside for a good reason.

USCO’s market cap of just $35 million appears to not factor inmuch value from the Iron Creek project, nor does the valuation pay attention to the strong current financial position of the company. For these reasons alone, this undervalued stock may soon find refuge in a valuation that recognizes the full potential of USCO to deliver on multiple fronts.

With just over 51 million shares outstanding, and a fully diluted count at approximately 63 million shares, USCO can generate substantial shareholder value once its production grade cobalt begins to reach the market. Insider ownership is high which aligns insider interest with that of the company’s shareholders, and also provides confidence that decisions made by management during production and expansion initiatives will get ratified with all shareholders in mind.

Mining For Value

While the current share price of USCO may reflect a micro-cap valuation, the company is in an entirely different class than most companies with similar market caps. Not only is the company managed by a remarkably successful executive team, but USCO has also capitalized on the perfect storm of opportunity. If the market provides a value similar to eCobalt, gains of more than 400% may be realized on that measure alone. Factor in historical reserve value and that multiple can be significantly higher. And, if the market wants to truly get into “valuation sync” with USCO, then it should apply value to some of the blue sky potentials which could ideally deliver a reserve of 10 million tons.

What is reassuring about USCO is that the demand for cobalt is not slowing down, and even if the company were to experience production delays, the value of their reserves would likely rise as supply remains tight. Investors should also keep an eye on the issues out of the DRC, as the inhumane work conditions continue to push companies toward suppliers with more ethical means of production. Just as the diamond industry underwent a significant shift in its supply chain due to unethical mining practices, investors tracking cobalt may experience the same change, which would be hugely beneficial to the market value at USCO based on the loss of DRC supply to the market. While those in the industry do not expect that the DRC will be completely shut out of the market, many expect that their market share will continue to shrink as more attention gets placed on the practices employed at many of their mining operations. Also important to note, if investors believe that North American competition is likely to emerge against USCO, think again. The likelihood for any company to get through the permit cycle within the next few years is extremely unlikely, which bolsters the market position of USCO even further.

Currently, USCO is small, but they may grow into a powerful player within the next twelve months. With drilling permits secure, and with cobalt demand set to skyrocket, this emerging company may provide investors with an opportunity that is hedged by consumer demand and technological reliance. Well managed and funded, USCO may very well become the North American star of cobalt production.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. World Wide Holdings paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to U.S. Cobalt by CNA Finance. All information researched and provided through any article associated with U.S. Cobalt and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

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Youngevity International YGYID Stock News

Youngevity International (YGYID) is achieving growth by building upon an omni-direct “consumer cloud” driven by an independent direct selling network. Despite the Herbalife headline saga, companies that engage in direct sale business models are far from losing competitive traction. In fact, a small handful, including Youngevity, are experiencing growth through multiple revenue streams and by a customer focus enabled by state of the art technologies.

What drives the Youngevity story? At the heart of the matter is a commitment to three key things: 1. Providing ways to help people improve their physical and emotional wellbeing, through unique products, including best in class nutritional products grounded in years of research.2. Building a culture of belief, and a community of like-minded distributors who are looking for achievement in their lives. That success that may come in different forms and varying levels of degree, depending on personal goals. 3. Giving back, with a focus on social responsibility that is carried out through the Be the Change Foundation.

Here is a six-minute video that represents both the mission and enthusiasm at YGYID and readers are highly encouraged to take the time to view the video in its entirety.It may change the way you may look at direct sales companies, and will certainly convey why YGYID is unique.

Youngevity Your Path to Betterment from Youngevity International on Vimeo.

What Has Youngevity Already Done?

While there may be a tendency to compare Youngevity to Herbalife (HLF) and their multi-year news making battle, investors should know that the only real similarity is that the two engage in direct sales business models.

The quick answer is that Youngevity has done quite a bit since becoming an OTC-traded company in 2012. YGYID has built out a seasoned leadership team and is experiencing impressive growth as a result of a focused and clear business strategy.

Some of the prioritized initiatives include improving operational efficiencies, developing a core competency in brand acquisition, creating a technology roadmap, and developing effective global e-commerce and social selling platforms ( As a result, annual revenue increased to $163 million in 2016, a staggering 307% increase from just $40 million in 2011. YGYID is already positioned as a Top 100 Global Direct Selling Company and has recently secured a NASDAQ listing that may open the door to substantial institutional interest.

So, even accounting for the revenue growth, the richly experienced leadership team, and the NASDAQ uplisting, discerning investors may want to know more.

Since 2011, YGYID has consummated sixteen mergers and acquisitions. These complement and help build the Youngevity portfolio and provide diversification for the consumer products division. They further strengthen the commitment to support socially conscious efforts, with the addition of brands like Good Herbs, Beyond Organic, RESTART Your Life, Sta Natural, and Paws Group. And one of the most exciting areas for acquisition has been services. Telecare is a direct access portal to doctors and medical care via telephone consultations, and David Allen Capital offers small lending services that can provide same day loan approval.

The Global Initiative

While YGYID is expected to generate organic revenue growth from these accretive acquisitions, some of the significant opportunities continue to get generated from the company’s scalable and sustainable global expansion efforts. With just 9% of current revenue recorded from sales outside of the United States, the international market represents a relatively untapped venue to support a global growth strategy. Internationally located, YGYID has offices in New Zealand, Mexico, Russia, and Singapore. This global strategy is intended to extend product and service offerings to countries identified as having immediate and long-term goth opportunity, as well as having the ability to serve as a corridor for expansion into neighboring countries.

The company has also secured revenue generating opportunities in the Eastern regions of the world, with offices in Taiwan, Malaysia, Hong Kong, and the Philippines.Global product development and distribution rights have been met with enthusiastic praise from these countries. Future targets will include highly populated countries in Latin America, Southeast Asia, and Eastern Europe. Global expansion will serve as an avenue for explosive growth within the next several years.

The Culture at YGYID

Satisfying customers, the markets, and the communities YGYID serves is a driving force. YGYID is attracting motivated and socially conscious customers, distributors and employees. YGYID intends to continue to adapt to and address rapidly evolving consumer preferences in the marketplace.

As an example, take a look at company owned CLR Roasters ( Café La Rica, one of its brands, has quickly become the 5th best-selling espresso brand in the United States. The coffee roasting operation is based in Miami, Florida and enjoys the capacity to roast up to ten million pounds of coffee per year in its 50K square foot state-of-the-art facility. Primarily focused on the CLR brands, YGYID also extends its offerings by creating private label package design, marketing opportunities, and brand building for commercial customers. CLR Roasters entered the single serve K-Cup market in 2015 and extended its market presence in national grocery and retail chains throughout the world. CLR Roasters is also served aboard major cruise lines and is the official coffee of the Miami Marlins baseball team – served proudly in its stadium.

Coffee is the connective thread between the business side of the business and the socially conscious side. Being a vertically integrated coffee company, delivering field to cup production, YGYID takes both pride in and advantage of its company-owned coffee plantation and state-of-the-art dry processing facility in Matagalpa, Nicaragua. YGYID plans to purchase a second plantation in the coming months. With CLR Roasters using only sustainable farming methods to foster increased yields, as well as realize cost savings, the brand has become a recognized leader in providing high-quality coffee. In addition to the high quality, the company is also credited for being USDA Organic, Rainforest Alliance Certified, Fair Trade Certified, and Bird Friendly Certified.

Serving as an exemplary model for sustainable and responsible business practices, the CLR Roaster model demonstrates the socially engaged culture at Youngevity. A new generation of consumers are intent on supporting companies like YGYID. Readers are encouraged to view this 3-minute video to learn more.

CLR Plantation | Matagalpa, Nicaragua from Youngevity International on Vimeo.

Youngevity Financials at a Glance

And this is where the YGYID story gets even better. While the company has a great fundamental story, the financial details are just as provocative. The growth at YGYID cannot be understated, with the company experiencing steady revenue growth since 2011. Although the expenses related to an aggressive merger and acquisition strategy may trickle to the bottom line of the financials in the short term, what remains certain is that YGYID is an EBITDA positive company, and has been since FY2013. From the company’s most recent FY2016 filing, gross revenue exceeded $162 million and produced EBITDA income of $6.77 million.

The balance sheet shows cash on hand and receivables of approximately $3.8 million at the end of FY2016 and $66 million in total assets. Stockholders equity stood at $18.98 million, up 62% from its FY2013 level of $11.7 million.

YGYID has traded within a tight, and arguably undervalued level during the past 52-weeks, with an adjusted high of $6.40, and a low price of $4.60 per share. Average volume is roughly 80,000 shares traded per day, and the company currently has 19.65 million shares outstanding after a 1:20 reverse split. Importantly, insiders own 77% of the company stock, so investors who may become spooked by the split should take comfort in knowing that management has a similar incentive in creating shareholder value for both themselves and company shareholders. Keep this in mind as well. With YGYID performing admirably on multiple levels, the promise for institutional and investor interest is magnified once the NASDAQ listing is maintained. With a small float of roughly 4.5 million shares, new acquisition and revenue news may be met with strong upside bias in the trading of shares, as liquidity and demand for shares may have a positive impact on stock price movement.

The Youngevity Difference

For investors getting their first look into YGYID, there is a tide of promising data that should enthuse even the most conservative of investors. Youngevity is a company that has an extraordinarily strong leadership team that in less than five years has driven revenue and brand equity significantly higher. Looking ahead, investors should expect more of the same.

YGYID has proven their ability to drive organic growth, implementing a global expansion plan that is likely to generate explosive revenue opportunity. Their merger and acquisition strategy is on-going and has created accretive cash flow for the company, allowing leadership to intensify its product expansion to both diversify the scope of the business and attract a larger base of both consumers and distributors.

In addition to building their offering through acquisitions, the YGYID internal product development engine is strong. Examples include a roadmap of compelling nutritional supplements with superior formulations, as well as technology-driven products like SNAP2FINISH- a stunning web application that offers photo gifts (

Already offering over 5,000 high-quality consumer goods through an updated and user-friendly web portal, YGYID has developed a business platform designed to provide seamless and efficient development of global commerce. In essence, the company acts as a “parent brand” to a diverse product base, inclusive of food and beverage, wellness, apparel and jewelry, spa and beauty, and nutrition and wellness options, with each category being demand driven throughout the world. Capitalizing on a demand-driven business model, YGYID has turned a substantial 89% of its revenue through direct sales and has also built an impressive market in its commercial coffee segment, which has driven 11% of the company’s total revenues.

Youngevity is fostering a development strategy that is expected to pay long-term reward for investors. Growth in a global market, taking advantage of technological advances to seamlessly develop new markets, and the vision to build a diversified and worldwide brand through socially conscious means is a testament to the forethought that the management team has put into the strategic initiatives. The world has seen a paradigm shift in the way business gets conducted, and the prolific use of social media can either become a key ally or foe for an emerging company. For YGYID, the story is positive, compelling and timely.

Even if investors were to leave the 307% growth in revenue on the side for just a moment, the numerous intrinsic factors in play at YGYID could surely make up for the difference. In reality, though, the surging revenue growth is important and combined with the value-driven business model in place at YGYID, the decision to invest into YGYID stock should not be a difficult choice to make.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. Youngevity International paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to Youngevity International by CNA Finance. All information researched and provided through any article associated with Youngevity International and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

Here is a bit of big news for DarioHealth investors – the company is getting labeled as a “disruptor” in the multi-billion dollar diabetes monitoring market. Now, in most instances, being stigmatized by a label is not necessarily a good thing, as most of the adjectives that come to them are typically not favorable. In the case of DarioHealth, however, being classified as potentially “disruptive” is just about the best compliment the company could earn, signaling a recognition of their progress towards becoming an industry leader in next-generation, app-based digital health data management.

DarioHealth is rapidly transforming the digital health landscape by providing personalized solutions that are redefining the way people think about chronic disease management. People deserve the best tools to manage their treatment, and with DarioHealth intuitive user-centric and highly engaging approach, individuals have an unrivaled method for health management.

DarioHealth just started commercialization in the U.S. a little over a year ago, and is already thinking ahead of next-generation. DRIO sees a future in monitoring and data management in big data, analytics and artificial intelligence and is less focused on the device or how you take the blood sample, but rather the next-generation’s ability to predict future blood sugar glucose levels.

When DRIO began marketing its MyDario device in the U.S. in 2016, few analysts were giving credit to the breakthrough technology the company was bringing to the market. Granted, emerging companies like DRIO often don’t get the market attention deserved, but that lack of early recognition is in no way an indicator that the company’s product is not worthy of considerable attention. DRIO is worthy of every bit of attention its competitors are getting, and here’s why.

The DarioHealth Model

As strong as the story is becoming with DRIO executing well on their mission to become a leading “app based” blood and glucose monitoring system for people with diabetes, the company is uniquely positioned in digital eHealth big data management and analytics. The business model is not necessarily complicated in design, but when applied successfully, it can be quite lucrative. If you look, the signs of success are already apparent, with DRIO announcing a record first quarter in May of 2017, highlighted by quarterly revenue increases of 77% compared to the first quarter of 2016, and a 20% sequential increase over the most previous quarter. Indeed, these numbers demonstrate the financial direction of the company, and by digging deeper into the recurring-revenue model, investors can get a glimpse as to how DRIO expects to consistently increase its quarterly revenues.

It’s been just over a year since their U.S. launch, but DRIO is already accomplishing what it has set out to do – penetrate the U.S diabetes market by selling app-based blood and glucose monitoring devices that allow diabetes patients to quickly monitor blood sugar levels, by using their smartphone; in essence turning an iPhone into a medical device. Since launching in the U.S., Dario has sold more than 25,000 MyDario devices, but the real money-maker comes with the sale of peripheral products needed to provide results. Focusing on opportunity, DarioHealth management seized a chance to take an essential element of a recurring revenue strategy and apply it to their own. For DRIO, the result is that the company has set in place a recurring revenue model by selling diabetic test strips to its device users. Thus, the more devices sold, the higher the level of recurring revenue, with DRIO capitalizing on an 80% rate of customer return for supporting products, and a 75% gross margin on the test strips needed for the MyDario measuring device.

Analysts in the industry have referred to the DRIO business model as the “razor blade” strategy, whereby blade manufacturers sell a single shaving tool and then rely on customer loyalty and a particular blade design to encourage long-term repeat business. It’s a proven and profitable sales model. In fact, for evidence of the value, just look at the $1 billion paid to Dollar Shave Club by Unilever (UN) to illustrate the interest, paying a respectable 6.5X the revenue of DSC at the time. Was DSC disruptive? You bet it was, and the founders earned a handsome reward for being so. Therefore, what’s not to say that DRIO investors won’t enjoy the same fate?

As a believer in app-based therapy and acknowledging the disruptive power behind the DRIO device, there is already clear value. However, the value is amplified by the fundamental changes in the way health services are being provided, creating a perfect storm of opportunity for companies, like DRIO, that are at the forefront of the revolution of digital eHealth big data management and analytics.

Revenue Ramp Thru Q1 2017:

The Perfect Storm For DarioHealth

The biotech market has been fickle and somewhat precarious for small-cap stocks, demonstrated by the current share price of DRIO, which sits at $2.32 a share, down about 45% from its 52-week high. But, underneath the facade of an underpriced stock lies enormous value that is not realized into the current market cap. And, since understanding where the value may lay is not always a numbers game, an explanation as to why the DRIO share price remains undervalued is appropriate.

There is a fundamental shift taking place in the medical world, and those who are paying attention are witnessing a revolution in business analytics and marketing metrics that will forever change the way the medical industry markets and sells drugs. Some have called the trend a violent convergence of technology, innovation, and cloud-based app services, and it’s this alteration of dynamics that is expected to transform parts of the medical industry. And, for companies like DRIO, who are ahead of this shifting curve, the benefits can be substantial. Consequently, for others who are stuck in the 20th century, like an executive at Merck (MRK), who believes that app-based technology will never adopt significant user attention, the likelihood of some large pharmas becoming another IBM of the 1990’s is not out of the question.

There is no need to beat up on Merck, but it’s difficult to reconcile their belief that the growth in app-based therapy does not have a bright future. Several things are happening to prove Merck wrong, and many analysts go as far as saying that the current method of marketing drugs and therapies will soon be obsolete. There is a new world of creative marketing being introduced to patients by social media campaigns and endorsements, that will soon offer more patient value and information that any multi-million dollar ad campaign would ever be able to accomplish. And, those that don’t believe in the change will likely be left behind, no matter the current financial might of the business.

With a plethora of information now at the fingertips of users, consumers and patients alike want to know far more than what a company sponsored marketer is telling them. Thus, with the explosive growth of social media sites that offer reviews, information, and pricing comparisons, drug companies are seeing far less traction to their marketing sites. Instead of resisting the change, companies like DRIO are embracing this trend, with real-time data becoming the new creative force in marketing. Thus, by understanding that data is becoming the driver in providing the consumer a reliable and more comprehensive source of information, companies that follow the change will benefit the greatest.

The DRIO Advantage

Putting the strategic pieces together, and taking into account the fundamental changes in the medical landscape, DRIO sits well positioned to benefit significantly from its encompassing business model. Being a company focused on app-based solutions, DarioHealth brings with them significant marketing advantages. First, DRIO is an agile company, able to quickly produce and target market segments to generate sales. While this model may sound simple, it isn’t. Few medically focused companies to date have demonstrated that they have the visibility to see where the new patient dynamics are leading. The fact that DRIO has a game-changing medical device, coupled with the ability to quickly adapt to changing market conditions, should pay huge dividends in the future.

Already a proven innovator in app-based monitoring and data management, DRIO has developed its MyDario monitoring system centered around one of the most vital assets that people now own: their smart phone. The genius behind the MyDario product is that the system allows the phone to become more than just a communication tool – the phone itself is transformed into an actual blood and glucose monitoring device. Imagine taking a phone and converting it into an actual medical device, whereby a simple plug-in makes an accurate glucose reading within six seconds of treatment, and that reading can be stored in the “cloud”, where it may be retained and shared with medical professionals. No need to imagine any longer, because the MyDario does just that. For those familiar with the device, they know that it has been referred to as the “Fitbit of diabetes,” taking real-time data and running it through complex proprietary and customized software, allowing patients to better understand how food and activity can alter their daily glucose levels in real time. In essence, MyDario offers a predictive capability to patients and can provide insight as to how the body will react to certain foods or situations. The predictive capabilities add significantly to the value of the MyDario device, and serve to differentiate the system from most others available in the market.

The system is next-generation, and DRIO has signed some major talent to spread the message. Securing major endorsements from basketball legend Dominique Wilkins and Lazier Racing, the MyDario monitoring system is gaining market attention. The focus of the partnerships is to advance awareness of MyDario, drive growth of new customers and increase market penetration. In regards to Dominique Wilkins, the multi-year agreement encompasses collaboration on social media, digital marketing and public appearances. Dominique Wilkins stated, “A few months ago, I started using MyDario on a daily basis to monitor my blood glucose levels. I found the MyDario plug-in enabling my smartphone to become a glucose meter device to be extremely easy to set up and use. I really like the compact design and convenience of making what I already carry with me all day, my smartphone, into a medical device. The MyDario mobile app is strong in its ability to manage and analyze the data inputs, leading to the management of a healthier lifestyle. I am excited to partner with DarioHealth to help others be more proactive and to think differently about managing their diabetes.”

Even a former Bayer executive, who worked in the diabetes sector, has joined DarioHealth as an advisor and sees it as a useful tool in maintaining healthy glucose levels, and could effortlessly improve the quality of daily life in patients with diabetes.

DRIO is already thinking ahead of next-generation, and is not as focused on the device or how you take the blood sample, but rather the opportunity in big data management and analytics. DRIO next-generation will be about artificial intelligence and the ability to predict future blood sugar glucose levels.

The Changing Landscape

For larger companies, coming to grips with the changes in the medical landscape are becoming increasingly important, and may be beneficial to companies like DRIO. Perhaps that’s why GlaxoSmithKline (GSK) entered into a partnership with Propeller Health to share in the rewards of the app-based asthma market. Perhaps more important, Medicare is beginning to recognize app-based medical solutions as a reimbursable treatment, opening the DRIO focused diabetes market to tremendous growth opportunity. Welldoc has pitched in as well, having the only FDA approved app-based treatment available by prescription only.

Thus, with two major avenues for revenue now open, DRIO is in prime position to exploit the opportunity. In a medical industry that is plagued by high cost and inconsistent reimbursement rates, companies like DRIO can take advantage of their low-cost options. While emerging companies may feel push back from the high-powered drug developers, the inevitable reality shows that using DRIO products and services can result in a 50% decrease in cost, and may soon have Medicare and major insurance carriers looking carefully at these app-based solutions. And, once the reimbursements become mainstream, investors should expect the valuations of companies like DRIO to increase exponentially, leading to an elevated level of mergers and acquisitions of these emerging and disruptive competitors.

There will come a time when patients will look back and laugh at the idea of having to take up to ten pills a day. But, such a pattern of treatment by pill has become facilitated by enormously wealthy companies, which generally treats symptoms rather than the disease. Well, DRIO can do the same at half the cost. Digital therapeutics and digital drugs will be common forms of treatment in the coming years, and regardless of the money spent to slow the changing tide of treatment options, patients will use their new found leverage in deciding what is best for themselves.

The future of utilizing digital monitoring and therapy is far closer than many people believe, with companies like DexCom (DXCM), which provides continuous glucose monitoring systems, now sporting a market cap of more than $5 billion. And then there is Livongo Health, a privately held company that is making real strides with its app-based “best practices” approach, designed to coach patients in making better lifestyle choices when living with diabetes. Livongo Health raised $52.5 million to advance their cause for “smart” diabetes management. Those two company valuations make the $2.32 share price for DRIO almost laughable, leading many investors to agree with the assumption that DRIO remains significantly undervalued.

Is DRIO undervalued? I believe they are. And I believe that an investment into DRIO is even more appealing to investors when I see industry giants like Apple (AAPL) and Google (GOOGL) hiding behind the scenes developing their own sensors to monitor blood glucose levels. According to a CNBC story, Apple believes that they will deliver the “holy grail” for treating diabetes to the market, an app-based service for its iOS system. For their part, Google and Sanofi (SNY) have partnered in a $500 million joint venture that will focus on type 2 diabetes, developing solutions that could help diabetic patients make better decisions about day-to-day health, ranging from medication management to improved social habits and lifestyle goals.

Obviously, both Apple and Google have the potential to develop apps that can compete with DRIO, but truth be told, the interest by each serves as an endorsement to the medical revolution taking place. It’s typical for large companies to take interest in a sector ripe for change and emerging growth, but they usually do not enter it successfully. Preferably, investors might embrace a partnership between DRIO and either of the two financial behemoths, but the interest alone may become a driving force in building shareholder value at DRIO. For DRIO fans, the dam has been opened, releasing substantial opportunity for the company to exploit, especially in Medicare reimbursement and potential FDA approvals. In either scenario, DRIO is positioned to benefit enormously.

The Means To Disrupt

The good news for DRIO investors is far from complete. From a financial perspective, the company is financially sound with a strong balance sheet. Recently completing a $2.5 million deal with an Israeli digital-health specialized fund, OurCrowd Qure, DRIO sits comfortably with $7 million in cash, absolutely no debt, and only 9 million shares outstanding.

The most recent quarterly results posted record revenues and continued sequential growth, with 76% of its revenues coming from the sale of test strips, proving the value of the recurring revenue model strategy. Sequentially, test strip sales increased by over 20%, and the Dario Blood Glucose Monitoring System sales grew by 6,900 units, eclipsing the 25,000 level since 2016.

For those tracking revenue growth, more good news: DRIO has recorded sequential revenue growth since the 1Q of 2015, rising from $67K to $1.07 million during the latest quarter, representing a cumulative growth of over 1393% in just over two years time. During the last nine quarters, DRIO has posted sequential revenue increases for each quarterly period, with average revenue increases between 12% – 85%.

It’s easy to see what drives the DRIO story, and there is not a chapter that does not inspire interest. The company, with their next-generation MyDario device, is well positioned to capitalize on their industry strengths and have a balance sheet and capital structure that can deliver continued sequential growth with minimal dilutive effect on shareholders. For investors who are willing to conceptualize the future and bank less on what large pharma is trying to tell a changing industry, the opportunities are substantial.

During the past five years, a revolution in the way medical treatment is being delivered has taken hold of a generation of patients that care more about changing a lifestyle than they do about filling their bodies with medication. While medication may be a vital component to patient care, in more cases than not, education and app-based lifestyle management are proving to be a viable competitor to conventional treatment. For DRIO investors, the company is still providing a ground-floor opportunity, trading at prices that neglect to factor in the multiples given to peer competitors. The revenue run-rate alone is ample ammunition to suggest far higher levels for the stock.

At just $2.32 a share, DRIO stock is a prime example of a disruptive stock that has simply not gotten the attention it deserves. Perhaps it’s time to monitor DRIO itself and take strong interest in investing in a stock that is riding the wave of a medical revolution in digital eHealth big data management and analytics.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. Hayden IR paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to DarioHealth by CNA Finance. All information researched and provided through any article associated with DarioHealth and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

Seanergy Maritime Holdings Corp. SHIP Stock News

With dry bulk shipping rates finally ascending from multi-year lows, it may be time for investors to consider allocating a portion of their risk-based assets toward companies positioned to emerge as intermediate and long-term winners in the sector. With that in mind, Seanergy Maritime Holdings (SHIP) is a compelling stock that should be on the short list of consideration for investors looking to take advantage of undervalued companies in the dry bulk industry.

Seanergy is not a new name to the sector. However, the company has transformed itself significantly since 2015, having built an impressive fleet primed to reap the rewards of the rising trend in dry bulk day rates. SHIP already owns a fleet of eleven vessels, comprised of nine Capesize vessels, which are the largest of the dry bulk carriers, and two Supramax vessels. Combined, SHIP’s vessels can haul more than 1.7 million DWT of dry bulk, and the fleet has an average age of 8 years.

What drives the Seanergy story? First of all, looking ahead over the next five years, sector fundamentals are positive. Then, several factors are aligned to support the thesis that Seanergy is a strong value play and growth story in the dry bulk Capesize sector, well positioned to capture significant upside potential. A modern, high-quality fleet acquired at low prices, a strong management team with a committed company sponsor, a competitive cost structure, a respectable balance sheet and solid corporate governance with no related party transactions are among Seanergy’s competitive advantages. And we believe that shares of SHIP at current levels are not factoring in the recent developments at the company or the positive sector outlook.

Seanergy Investors, Stay Focused On Growth

Looking at the fundamentals for SHIP, it’s apparent that the market may have left one of its most emerging dry bulk gems at the harbor. Trading at just 68 cents a share, well off of its 52-week high of $8.65, investors may have written this story off far too early, ignoring the newest chapters being written by company management.

Now, before you slam me with comments about a delisting notice received from NASDAQ, consider the fact that SHIP has a minimum of 180 days to regain listing compliance, along with additional tools at their disposal to satisfy the issue. So, before investors start screaming “reverse split,” the reality is that SHIP has built an impressive asset base, positioned not only to take advantage of a rise in service demand but has also improved its balance sheet considerably to allow the company to benefit materially from increased day rates and lower operating costs. Thus, with time on their side, investors should keep their eye on the opportunity and focus less on the dark clouds that have not even approached the horizon. In the last 52 weeks, SHIP’s shares have traded between a high of $8.65 and a low of $0.60, so given the company’s quality and prospects, the shares could rebound well above the $1 mark.

Positive Sector Fundamentals

After a couple of years in the doldrums, the dry bulk sector has come lately into renewed attention as the result of continued robust demand and diminishing fleet growth. This has restored the balance between supply and demand which is what drives freight rates. Trade growth is expected to be around 2% in 2017 and 4% in 2018, against projected fleet growth of 2% in 2017 and 1.5% in 2018.

Supramax vessels are smaller (60,000dwt), transport a variety of cargoes and can access smaller ports as well. Capesize vessels are the largest ships (about 170,000 dwt) and are used to transport mainly iron ore and coal, which together account for over 50% of the dry bulk trade. China has been the locomotive of the dry bulk trade with India playing now a bigger role, as its economy grows.

Historically, a recovery in the dry bulk sector has a bigger effect on the Capesize sector. Two more factors add to the attractiveness of the sector, which is the core focus of SHIP. Demand for major commodities is expected to continue strong between the years of 2017-2020 and the fact that ships need to transport over longer distances (a lot of high-quality iron ore goes to Brazil to China) translates into higher demand for ships. And there may be fewer Capesize vessels around, as the Capesize orderbook is virtually zero now and is expected to start to decline towards the end of 2017. This can be a bonanza for freight rates and asset values, which are now starting to recover from historically low levels.

So, How Will Seanergy Cruise Higher?

A big portion of the ultimate return in shipping has to do with the timing of the asset acquisitions and the price paid for it. Seanergy has been literally and completely rebuilt since 2015 and has invested $275 million since then, with $41.5 coming from the company’s sponsor. SHIP has managed to acquire the majority of its fleet close to historic low prices, thus having a huge advantage over other companies that have legacy issues with more expensive acquisitions. To give you an idea, the 20-year average value for a 5-year old Capesize vessel is $48 million, and the 5-year average (with the market in a trough) was $34.4. Seanergy’s acquisition cost was $29.2 million for a similar vessel. The average fleet age for SHIP’s vessels is eight years with an expectancy to comfortably generate transport services for at least two decades. So, there is plenty of economic life ahead.

Another factor is Seanergy’s competitive cost structure. SHIP operates as one of the lowest cost providers in the industry, with its daily operating costs about 30% below the industry average. Moore Stephens, an industry specialist firm, reports that the average daily operating cost is around $7,200 when SHIP’s cost is around $5,000. This cost advantage goes directly to the bottom line.

While low budget operators can snag a contract at random times, SHIP has built strong relationships with industry leading charterers, including RioTinto, Cargill, Daewoo, and BHP Billiton. In addition to these world shipping charters, SHIP has secured trade relationships with LDC, Oldendorff, Vale, and Fortescue to add diversity, flexibility, and competitiveness to transport contracts. As world economy gains traction, which economists expect to happen during the remainder of the year, these existing SHIP customers will be the first to benefit from the growth, and the value generated may create a secondary boon for shippers, like Seanergy, who have long-term relationships with global suppliers.

Cost Efficient, Scalable, Growth Oriented Operating Model

SHIP offices in both Athens and Hong Kong and employs a shore-based staff at each port. Seanergy has delegated the outside technical and commercial fleet management to unaffiliated third parties, which enables the company to grow without the need for additional investment in these areas. The company has hired Fidelity Marine, an unrelated third party, to undertake an exclusive role for the commercial management of the fleet on a commission basis. Fidelity Marine acts as the sole broker to Seanergy and brings with them over 28 years of industry experience and longstanding relationships with worldwide charterers.

The technical management gets overseen by V. Ships, a Cyprus company established in 1991 that provides professional management to over 1000 sailing vessels. V. Cyprus enjoys established recognition from the U.S. Coast Guard and other governmental agencies and holds service certification for a variety of ship type. SHIP pays a fee of $8000 per vessel, per month.

Seanergy: The Difference Is In The Management

Forecasts suggest that the upcoming weeks and months may generate additional pricing momentum for dry bulk shippers. But, investors are cautioned not to search out the lowest priced stock in their belief that all carriers will benefit equally. Despite the price, investors must look closely at company fundamentals, its off-balance-sheet agreements, and related-party transactions that exist in the industry.

In sharp contrast to some of its peers in the sector, SHIP has absolutely no off-balance sheet or related-party transactions on the books. The company has also established extensive internal controls and oversight managed by a BOD that has three of its five members sitting as independent directors. The transparency of the third-party ship management is accompanied by the company’s clarity when it comes to its finances.

Management has proved its competence – the company has been completely rebuilt since 2015 and at acquisition prices below historical levels and below most of its peers. In 2015, SHIP went from zero to eight vessels; in 2016 they added another two, and an additional vessel was acquired in 2017 which is expected to be delivered in the near future.

To build the fleet, SHIP completed a $25.5 million raise through two direct equity and one marketed public offering during the second half of 2016. Also, SHIP raised an additional $37.9 million during the fourth quarter of 2016, taking delivery of two Korean built Capesize vessels at historically low costs. These capital raises strengthened the company balance sheet and its ability to secure new financing facilities to fuel growth throughout 2017.

Other than utilizing its NASDAQ listing to raise capital when the markets offer fair terms, the company has established beneficial financing arrangements with Alpha Bank, UniCredit, Nordbank, and Nataxis, just to name a few. Through these partnerships, SHIP has secured seven bilateral loan agreements, bringing total debt to $214 million. Importantly, SHIP has negotiated significant covenants with lenders that provide for minimum payments throughout 2017, as well as maintaining the ability to declare a dividend to holders of common stock. Along with these strong relationships and lender confidence, SHIP also enjoys full waivers on loan facilities until the second quarter of 2018. These arrangements provide Seanergy with firepower and flexibility to pursue additional acquisitions.

The most recent filings show outstanding shares sitting at approximately 37 million, with 19.6 million in the public float. At current stock prices, SHIP has a market cap of roughly $25 million and a total capitalization of approximately $245 million.

Besides competent management and Board of Directors, Seanergy has a committed sponsor who owns about 70% of the company.

Looking ahead, management has a very clear and well-defined strategy – it is looking for additional opportunities in the Capesize sector which are its core focus. And management is positioning its fleet to take advantage of a market recovery. For example, in April, the company announced the charter contract of M/V Lordship for up to twenty-two months, which is expected to generate upwards of $10 million in net revenues for the company. The contract terms also allow for additional market upside and the flexibility to enter into a fixed-price agreement for up to twelve months at any time during the contract. The flexibility of the arrangement signifies the early signs of the rebounding rates, where the shipper is grabbing more leverage as demand increases.

Where Seanergy Will Dock

While investors would be hard pressed to commit to a given price target for a stock, most believe that SHIP is considerably undervalued at current levels. Perhaps being priced in with weaker competitors, SHIP may surprise investors and become the breakout star in the remainder of 2017.

Shares of SHIP at current levels are not factoring in the recent developments at the company or the positive sector outlook. With management tasked on getting the share price to well above the one dollar level, investors should expect an aggressive, but balanced, acquisition and chartering campaign to generate meaningful revenue increases during the next several months.

With its ownership in just the nine Capesize vessels, assuming no additional acquisitions during the remainder of 2017, SHIP can generate more than a 21% return on investment for each ship. Considering day rates of between $15,000 – $25,000 per day, SHIP could deliver an annual FCF of more than $4.2 million per ship based on developing day rate projections.

Why Seanergy may find its stock either ignored or misunderstood by investors remains the question of the day. But, what should be recognized is the inherent value already in place at the company regarding its asset base and potential to deliver significant FCF in the coming quarters. Investors should not ignore the business fundamentals and continued strength on display at SHIP. Additionally, investors would be wise to take the current NASDAQ notice as a short-term blip on the screen, with a dedicated management team having tools available to remedy the concern.

At current levels, SHIP should clearly be benefiting from the recent rebound in industry stock prices, but, for the time being, SHIP remains an undervalued opportunity. As with the new market dynamics, by the time retail investors decide it’s time to make the investment into SHIP, the stock will have appreciated significantly higher than current levels, jumping in reaction to pre or after market news that dilutes the buying opportunity at these levels. For that reason, and for the compelling fundamentals of the company, a ticket to cruise on SHIP is attractive at these levels.

Disclosure: This article was written by Kenny Soulstring, and it reflects my own opinions and unique articulation. This article is not intended to offer investing advice, guarantee 100% accurate predictions or to be interpreted as providing a personal recommendation. What I can guarantee, though, is accurate research, thoughtful analysis and an enthusiasm about any stock that I cover.

While I seek to uncover emerging companies that I feel have true value and potential, it’s important that investors assign an appropriate time horizon to each of their investments, understanding that emerging companies need time to mature.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

Additional Disclosure: I have no position in any stock mentioned, but may initiate a long position in SHIP within the next 72 hours.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. World Wide Holdings paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to Seanergy Maritime Holdings by CNA Finance. All information researched and provided through any article associated with Seanergy Maritime Holdings and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

Alliance MMA Inc AMMA Stock News

Alliance MMA Inc (NASDAQ: AMMA)

Finally, for those investors that have been patiently waiting to grab an investment into the multi-billion dollar mixed martial arts (MMA) market, the opportunity is now. Alliance MMA, in Q4 of 2016, has become the first and only MMA company that is publicly listed and actively traded on the NASDAQ marketplace. Despite the acquisitive momentum generated during the previous six months, current share prices hardly reflect the intrinsic value already created by AMMA management. Thus, for fans and investors alike, to borrow the phrase, “iiit’s tiiime” to introduce investors to a ground floor investment opportunity into a rapidly emerging MMA stock, Alliance MMA (AMMA).

The AMMA story and business plan are strong, and the acquisition and roll-up strategy implemented since October of 2016 is beginning to deliver the intended results: a basis for a recurring revenue stream that provides both visibility and significant growth potential. And, because the market has apparently ignored the recent spree of acquisitions, shares may represent a bargain at current levels, a statement based on the unreflected value of the ten revenue producing fight promotion companies recently purchased or in LOI agreements by Alliance, each expected to generate revenue in 2017. But, to be clear, revenue generation won’t end with this initial tranche of acquisitions; Alliance has intentions to acquire quite a few more revenue generating companies before the end of 2017. So, stick with me.

In AMMA’s current form, mixed martial arts fight promotion will provide the biggest bang in revenues for the company, but the AMMA strategy goes well beyond one-dimensional reliance on fight promotions as their only source of income. Already, Alliance MMA is quickly taking advantage of its post-IPO status, creating what many believe will lead to the company becoming a lucrative value proposition within the broad scope of MMA production. Through their aggressive and strategic “roll-up” strategy, AMMA is rapidly embarking on its multifaceted business plan, designed to build a substantial multi-regional footprint. Focused not only on fight promotion, but AMMA is also intent on recruiting a dedicated and formidable emerging fighter talent pool, as well as continuing to rapidly and efficiently build its media and services production capability.

First and foremost, let me make one thing clear: Few companies, AMMA included, are looking to go head on against the major league promoters. Instead, smart companies like AMMA are putting themselves into the role of being an active and complementary niche player, with a goal to recruit and develop competitive fight talent that may one day be promoted to compete in the main championships under the UFC or Bellator label. The more fighters that AMMA can advance, the stronger the demand will become for emerging fighters wanting to be represented by AMMA promotions.

Developing its niche space, Alliance MMA has been pushing a concentrated effort toward the promotion of mid-level events, introducing and featuring emerging talent that can ultimately position AMMA as a premier “feeder league,” with AMMA intent on promoting its fighters to compete within the mega name promotion companies in the industry. The company is well on their way to accomplishing this goal, already setting into motion a plan designed to facilitate orderly and consistent growth. AMMA has been active in acquiring prominent and successful local and regional promotion companies and attracting and signing the most promising emerging talent (fighters). Additionally, AMMA is taking advantage of its well diversified executive team who can exploit opportunities of different scale and direction, whether it be fight promotion, media, or distribution and sales based production.

Even though the company has only recently emerged as an influential multi-regional promoter, AMMA is demonstrating to competitors in the industry that it has both the ambition and firepower to quickly develop and acquire the pieces required to perpetuate the aggressive, but managed growth strategy. And, it’s for that reason that AMMA has been extraordinarily successful in the acquisition of small, but influential regional promoters. A colleague familiar with the industry made it simple to understand. He said that promoters are not “selling out” to AMMA; they are “selling in,” knowing that becoming a part of the greater good can have a long-standing and mutual benefit. And, he added that at the pace at which AMMA is rolling-up these regional companies, it wouldn’t take long for them to establish a significant and respectable position in the MMA industry.

Alliance MMA Using A Roll-Up Strategy

With highly capable management in place, the mission and focus at AMMA are well defined, providing the strategic road map for what the company intends to achieve during 2017. Utilizing a “roll-up” strategy, AMMA is committed to creating a premier promotional showcase for emerging mixed martial arts fighters, in particular for those competitors who have aspirations of advancing to the sport’s highest level of professional competition.

Since becoming a public company in Q4 of 2016, AMMA has been aggressive but disciplined, in taking advantage of its new capitalization, acquiring or retaining the services of seven regional fight promotions, a fighter management firm, an electronic ticking platform, and a media production company. Each component at AMMA will be fully developed and is expected to provide a synergistic platform that will have every business soon contributing to current operations. These significant promotion acquisitions have proven their value by producing MMA events that have generated intense fan interest, have led to the signing and representation of a diversified stable of recognized and emerging fight talent, and have shown consistent ability to provide profitable event cards on a local and regional basis.

With the first tranche of acquisitions complete, AMMA is showing no signs of slowing down or losing its deal-making momentum. To the contrary, AMMA is continuing its quest to identify and acquire successful regional promotions, as well as expanding their MMA fan base by simultaneously acquiring and developing a world-class media production and distribution business. In other words, management is showing that they will not be content until they successfully develop an all-encompassing company, one that can promote fights, create and market media opportunities, and facilitate the ticketing and venue partnerships for each of its events. For AMMA, once these synergies become more mainstream to each event, the more likely it becomes for unencumbered dollars to fall to the bottom line.

After closing its IPO, AMMA was purposeful and strategic right from the start, acquiring Hoosier Fight Club, Cage Fury Fighting Championships, Combat Games MMA, Shogun Fights, V3 Fights, GoFightLive, and CageTix.

The good news for investors is that AMMA had no plans to slow down. To the contrary, AMMA has continued to press on the accelerator by acquiring additional MMA promotions and then integrating them into a seamless and efficient AMMA business platform. With each acquisition, the intent is to realize significant cost savings by taking advantage of synchronized business platforms that will not only provide economies of scale but will also strengthen AMMA’s ability to leverage their growth quickly. These savings may also become a tool to advance the vision of AMMA’s aggressive growth model that can transform AMMA into a prominent, fully integrated promotions and media company.

Where AMMA Wants To Position

Recall what was noted earlier. AMMA is not developing a business model to go head to head with the giants in the industry. However, don’t insinuate that management is not entirely committed to getting deeply entrenched in the fight business because they are 100% focused in that endeavor. And, better yet, investors can expect that management will also play it smart, finding the niches between those giants and scooping up many of the dollars that these jumbos gave gotten too large to see. And for a company like AMMA, with strict cost controls and a small float of shares, it does not take too many of these shrewdly found dollars to turn a profit.

To get those dollars, though, they need good events. For AMMA, a huge priority is to identify and attract the best of the best from the emerging fighter pool. Just as top athletes tend to go to the best sports programs throughout the United States, AMMA’s intent is to position themselves as the top “mid-level promoter.” From there, they can sign and eventually promote high performing fighters, albeit likely a small number, to the next level of competition, which in the best case scenario for a fighter would be the UFC. So, whereas the UFC is keen to sign and keep its high-profile fighters, AMMA’s goal is to nurture rising fighters through the development phase and get them promoted to the next level of competition. For AMMA, even though they lose a top fighter and potential event favorite, there is value in doing so.

Consider it this way, to exploit the potential value in bringing up competitive fighters; AMMA is, in essence, intending to build a “super mid-level conference.” Now, I use the term for example purposes to illustrate the business model for AMMA as it relates to their mid-level event concentration. As a top promoter of developing talent, AMMA is working to become the primary conduit to the highest competitive level in the sport in the eyes of professional prospects. Each of the promotions acquired by AMMA has already proven capable of moving fighters to the next level, specifically to the UFC. These “up-listing” placements then create a well-established reputation that creates real demand for fighters to sign exclusive promotion agreements with AMMA properties. As more competitors rise in class, to the UFC or Bellator, for instance, it becomes a marketing windfall for AMMA in their continuing ability to attract emerging new talent.

While in most cases the best talent tends to get acknowledged in the fight game, it’s important to note that even the best competitors are often at the mercy of their promoter. Consequently, if not provided prime time opportunities to showcase their skills, the short career window for advancement slowly begins to close, as the longevity in the fight business is not a long-term proposition. For a fighter to maximize their potential and to prosper in the fight business, it is imperative that they align their career ambitions with a promoter that has both credibility and a proven track record to move fighters up in class.

With that said, AMMA is proposing that its acquisition and development strategy will aid in building a substantial and sustainable development system to the top MMA promotion companies. The greater the intrinsic value provided to fighters by AMMA, the greater the likelihood that the company will continue to sign and represent top emerging talent. At that point, AMMA can leverage their success by attracting top, developmental stage competitors and becoming an in-demand promotion company attracting those fighters that have the ambition and determination to fight at the highest levels.

As the talent recruitment and regional acquisition strategy continue to materialize, AMMA will simultaneously focus on expanding its national sponsorship opportunities, and also intensify its local and regional sponsorship agreements. By capitalizing on core strengths to generate higher sponsorship rates based on its fight talent and premium fight cards, AMMA creates an intrinsic opportunity for increased event exposure and sponsorship demand, creating an additional revenue segment from their core business.

MMA growth is also organic, and AMMA will be a clear benefactor. It’s undisputed that MMA is one of the fastest growing sports in the world, and with the sport sanctioned in all 50 states; there is also no shortage of demand for MMA on a global basis. So, while considering the value proposition here at home for AMMA, investors should not discount the opportunities that will present themselves through both domestic and international distribution agreements.

Building Upon History

With ten acquisitions already completed, two more acquisitions pending with LOI agreements and additional purchases anticipated before the end of 2017, AMMA will be positioned to promote over 125 events per year, with the potential for that number to be considerably higher based on the company’s business strategy. Additionally, banking on the experienced management in place at AMMA, the focus will be on increasing revenue from each acquisition by expanding the average annual number of events for each promotion, with targeted increases of between 10%-20% at each company. The financial benefit of promoting additional events becomes more cost accretive based on AMMA’s consolidated business platform, taking advantage of economies of scale, reducing redundancies, and capitalizing on venue partnership opportunities that offer substantial compensation opportunities from locale’s or sponsors looking to host events.

Over the next eight months, AMMA will be managing the expansion of events held by its acquired target companies, as well as from prospective target acquisitions. The current plan calls for a total of 20 regional promotion companies to be rolled-up under the AMMA umbrella. Once in place, AMMA has publicly stated their intent to maximize revenue opportunity from each by orchestrating over 125 MMA events per year, highlighting over 1,000 of the nation’s top emerging fighters under promotional contract. Remember, AMMA is not trying to be an “average promoter,” it is their intention to be the “highest performing mid-level promoter” in the industry, attracting the best of the best from an enormous pool of available fighters. And don’t expect AMMA to fill it’s event cards with just any low-ranking competitor. AMMA intends to promote quality, not quantity during their sanctioned events, solidifying AMMA’s reputation as they continue to build the brand.

Once the regional pieces are connected to create a national market presence, AMMA then will look to leverage its name and credibility to secure sponsorship arrangements with many prominent consumer name brands. In addition to sponsorship revenue, AMMA will seize upon its sizable library of media content, taking advantage of assets within the target companies to monetize film, print, and online media. At that point, the profitability equation becomes apparent, and the sum of the parts may become the product for substantial revenue growth and bottom line profitability.

The AMMA Management Can Deliver Results

Like any emerging company, active and experienced management is essential, and AMMA is not short on executive talent by any means. AMMA is led by a diversified and well-experienced team of professionals, including:

Paul Danner, Chairman & Chief Executive Officer: Former CEO of three publicly traded companies, including a Nasdaq-listed roll-up venture. A broad-based executive with Fortune 50 experience who has conducted business operations on five continents, Mr. Danner formerly served as a Naval Aviator flying the F-14 Tomcat.

Robert Haydak, President: Former CEO of top ranked regional MMA promotion, Cage Fury Fighting Championships. Prior experience as a founder/CEO of two highly successful ventures provided a formidable foundation in all aspects of business operations. Former NCAA Division 1 wrestler.

John Price, Chief Financial Officer: Previous CFO of MusclePharm, a publicly traded sports nutritional supplement company. Seasoned CPA with broad operational experience in high growth domestic and international companies, including audit expertise gained through his prior affiliation with Ernst & Young.

James Byrne, Chief Marketing Officer: Veteran of arena sports marketing, creating media opportunities, joint ventures & marketing partnerships. Senior marketing executive for Ultimate Fighting Championship, World Wrestling Entertainment and Glory Kickboxing. Formerly operated a boutique marketing consultancy serving clients including Saatchi & Saatchi and SONY Pictures Classics.

Jason Robinett, Chief Technology Officer: Seasoned technology industry executive. Served as Chief Information Security Officer for Watermark Estate Management Services, a private entity responsible for Bill Gates’ personal and family matters, as well as Director of Information Security for Expedia, Inc. where he created the company’s global information security organization.

AMMA Building A Sizable Portfolio Of Promotions

After completing its IPO, AMMA has embarked on a steadfast journey to begin the process of maximizing shareholder value. Now, being just six months old as a publicly traded company, AMMA has quickly built a stable of revenue-generating promotions, each having strength on a regional and national scale. Of the ten post-IPO acquisitions made, seven are MMA promotion companies, one is a digital media sports platform, another specializes in facilitating an electronic ticketing platform optimized for marketing MMA events, and one provides a significant boost in its fighter management division with the acquisition of SuckerPunch Entertainment. A brief introduction to each is certainly warranted:

· Cage Fury Fighting Championship (CFFC): Based in Atlantic City, New Jersey, Cage Fury Fighting Championship has successfully promoted over 50 professional MMA events. CFFC keeps its fight promotion focus in the northeast corridor, concentrating its efforts in the New Jersey and Philadelphia markets, with additional regional MMA promotions scattered throughout the northeast. CFFC enjoys a Top 10 ranking in regional promotional activity and has agreements in place with CBS Sports Network and to broadcast local and regional events.

· Combat Games MMA (COGA): Combat Games is a Kirkland, Washington-based MMA promotion company founded by Washington MMA pioneer Joe DeRobbio, who has built the company into a regional powerhouse in MMA fighting. AMMA will have the benefit of DeRobbio’s 13 years of experience as both a referee and advocate for fighter safety, where he will join forces with Jason Robinett to lead AMMA promotions in the Pacific Northeast Region. COGA has promoted over 46 shows primarily in Washington State.

· Hoosier Fight Club (HFC): Considered by many as the Chicagoland leader in MMA promotions, HFC is credited with promoting the first professional MMA fight in the state of Indiana. HFC has been an instrumental force in expanding the footprint of MMA in Chicago and Indiana. HFC was founded in 2009 and has promoted over 26 events, including the first sanctioned event in Indiana in January 2010. HFC has sent or promoted eight fighters to the UFC and several to Invicta Fighting Championships.

· V3 Fights: Considered as one of the fastest growing MMA promotion companies in the Southern region, V3 is based in Memphis, Tennessee. V3 is credited with bringing sanctioned MMA fights to the state of Tennessee, and has subsequently built a reputable brand and reputation for fight quality within a region that expands into six large venues in the state, making V3 one of the fastest growing MMA promotion companies in the south. V3 has promoted 45 events primarily at event centers in Memphis, Tennessee and elsewhere in Tennessee, Mississippi, and Alabama.

· Shogun Fights: Based in Baltimore, Maryland, Shogun Fights has become a premier MMA promoter, often featuring fights to capacity crowds at the Royal Farms Arena. Additionally, Shogun has expanded events throughout the Mid-Atlantic region. Founded in 2008, Shogun has promoted 14 fights at the Royal Farms Arena in Baltimore, the same venue that hosted UFC 174 in April of 2014.

· GoFightLive! (GFL): Acquired in 2016, GFL provides AMMA with a sports media and technology platform that remains entirely focused on the combat sports industry. GFL brings an extensive video library, as well as a proprietary platform that can deliver online streaming video content, the production of televised events, and a seamless platform that offers a substantial social media presence that connects MMA enthusiasts from around the world. With a media library containing comprising approximately 10,000 hours of unique video content, and the expected addition of about 1,200 hours of new original content annually, GFL maintains the largest continuously growing database of MMA events, fighters, and fight videos in the world

· CageTix: AMMA acquired CageTix to integrate an electronic ticketing platform and service to complement its promotional activity across the United States. CageTix is recognized as the leading ticketing service in MMA and is the first ticketing service to concentrate solely on combat sports, inclusive of boxing, Jiu Jitsu, Muay Thai, and MMA. The acquisition provides AMMA the opportunity to expand not only its revenue, but to track valuable consumer data that will help to define an efficient, strategic, and targeted marketing campaign. CageTix presently services the industry’s top international mixed martial arts events including Legacy, RFA, Bellator MMA, King of the Cage, and Glory. Since its inception, CageTix has sold tickets for over 1,200 MMA events and currently services 64 MMA promotions operating in 106 cities.

· IT Fight Series: Founded in 1995, ITFS currently hosts approximately ten MMA promotions per year in various cities throughout the Ohio region. Respectively, in December of 2016, IT Fight Series promoted its 70th show at the Ohio Expo Center in Columbus to a sold-out crowd. The IT Fight Series brand has developed more than a dozen fighters who went on to compete in professional MMA competition with Ultimate Fighting Championship (UFC), Bellator and other premier promotions.

· SuckerPunch Entertainment: In January of 2017, AMMA acquired SuckerPunch, widely acknowledged throughout the industry as the world’s top MMA fighter management and marketing company. Now operating under the Alliance MMA umbrella, SuckerPunch will continue to provide world-class representation for fighters inside and outside of the cage. SuckerPunch currently has more than 100 fighters under contract worldwide.

· Ring Of Combat: On September 30, 2016, the Company acquired the exclusive rights to the Ring of Combat fighter library, which includes professional MMA, amateur, and kickboxing events and covers approximately 200 hours of video content. Ring of Combat has sent about 90 fighters to the UFC. The Company has also secured the media rights to all future Ring of Combat promotions.

· Kings Highway Media: In February 2016, AMMA established a noteworthy relationship by retaining Kings Highway Media, LLC for both domestic and international omni-channel media rights distribution. The relationship with Kings Highway supports AMMA’s MMA focus in delivering upon key revenue drivers inclusive of live television, content, and sponsorships. Kings Highway is a full-service global media brand distribution advisory, highly adept at introducing and expanding the domestic and global media presence in venture capital, private equity, IP rights holders and sports & entertainment companies in the United States and internationally. Kings Highway directs the building of equity value in addition to multi-divisional revenue growth of its clients’ branded assets.

Going forward under the Alliance MMA umbrella, each of these regional promotions and acquisitions will continue to operate under their respective names, leveraging the valuable brand equity they’ve built over the years.

Capital Structure And Liquidity

Beyond the significant opportunities already being realized at AMMA, the emerging story would not be complete until the specifics of both the capital structure and cash liquidity details are noted. In that respect, if, as an investor, you are looking to take a position in the only publicly traded MMA stock, it will be reassuring to know that AMMA is about as clean as they come regarding capital structure and cash liquidity.

AMMA is carrying no historical baggage. Unlike many newly listed small-cap stocks, AMMA did not reverse split into a former shell of the past, taking on no legacy issues or past reputation. The most recent 10-K shows nothing but clean agreements, no disgruntled legacy shareholders, and an outstanding share count that sits at only 9,022,308 shares. Importantly, of those roughly $9 million shares, only 2,222,308 shares are not being held tightly by insiders. These metrics leave a tidy capital structure at AMMA, free of debt and in a strong position to capitalize on the direct revenue models being brought forward by the recent spree of accretive acquisitions. Investors should pay little attention to those outspoken investors, or legal eagles, who point to the delay in the first 10-K filing as a red flag. To them, I say, what better way for management to expressly show their commitment to full disclosure than to delay their first 10-K filing until they were 100% comfortable with their accountant’s confirmation of opinion. Despite the headlines made by incentivised commission based legal teams, AMMA did the right thing. They completed, without deceit, each obligation outlined and mandated by the SEC. Investors should praise management and use those conspicuous legal headlines as a part of next years firewood.

On a liquidity basis, AMMA reported over $4.7 million in cash under their 2016 10-K report and a stock treasury that enables the company to issue up to a total of 45,000,000 shares on a fully diluted basis. No worries about the O/S climbing to the hundreds of millions here, with a cap at 45 million shares, the Treasury holds ample firepower to continue the acquisition process without serious near-term dilution to current shareholders.

With no skeletons in the closet and a cash balance that offers near-term growth opportunity without the fear of significant dilution, investors may find an entry at these levels a welcome opportunity. Keeping in mind that each promotion acquisition is immediately accretive to current revenues, the purchases made by the company also come with the near-term financial benefit. Thus, while there may be some sporadic near term dilution to continue the build-out, shareholders should also recognize the value of those assets almost immediately, and according to the business model, investors should model their yearly projections at between 10%-20% higher than current revenue and event figures show.

The Scorecard

AMMA is interesting on several fronts, each of which may offer significant and near-term value appreciation to shareholders. First, the low share count and the immediate impact of acquisitions plays directly into bringing the company to profitability in relatively short order. Second, with no debt, and a management team that is bent on building shareholder value, the pace at which the company is delivering on its stated goals is quite encouraging. While investors should not necessarily expect the company to become profitable in the next few months, there is certainly the strong likelihood that AMMA is clearly positioning themselves for a strong 2017, taking advantage of the significant momentum gained at the end of 2016.

Finally, from an investment perspective, finding an opportunity like AMMA, with no legacy issues, a clean balance sheet, a low share count, and experienced management in place, is a comforting spot for investors to consider a position in the company. With the company demonstrating the ability to make all of the right moves, I expect that the shares will soon knock-out the stubborn resistance, and work their way higher. Once investors catch a clue as to what AMMA is actively building, shares may indeed show the strength to recapture all its IPO price of $4.50 and more. From there, guidance and acquisition are the keys, and as long as the deals continue to be accretive to growth, I believe that the share price will win the bout, moving higher in knockout fashion.

Disclaimer- CNA Finance is NOT an Investment Advisor. Our goal is to bring both news and under discovered stocks to the attention of investors to assist in making smart decisions in the market. CNA Finance is a for profit company. That profit is generated through three (3) different types of relationships. First and foremost, we work with pay per click and CPM advertisers on banners. We also have affiliate relationships with various companies where we earn a portion of the sales we refer. Finally, we may have relationships with some of the companies or IR firms that represent companies mentioned within our works in which we are compensated in cash and or stock for consulting, investor relations, and Press Release services. World Wide Holdings paid CNA Finance $3,000 to hire Perceptive Analytics for research and writing services as well as other investor relations services provided to Alliance MMA by CNA Finance. All information researched and provided through any article associated with Alliance MMA and published on CNA Finance is public information that is documented and available upon request. CNA Finance encourages all investors to seek professional advice before making any investment decision.

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Premier Holdings Corp PHRL Stock News

Premier Holdings Corp (OTCMKTS: PRHL)

CNA Finance is no stranger when it comes to seeking out emerging opportunities in the markets. While the CNA research team generally covers stocks that have valuations in excess of $100 million in market cap, we do entertain investor queries about stocks that are showing signs of having the ability to become a leader in a given sector.

Premier Holdings Corporation (PRHL) is a company that has attracted CNA Finance investor attention, with the CNA Finance team being challenged with covering PRHL to address that investor interest. While the team does not generally cover stocks that are priced at $0.08 cents per share, that does not mean that we ignore investor interest, nor do we avoid stocks that may be on the verge of delivering significant shareholder gains in the relative near term. We believe that PRHL holds potential.

With that said, the CNA Finance team reached out to PRHL, and allowed the management team an opportunity to re-introduce the company, one that has been in business since 1971. In doing so, PRHL addressed the past, present, and future strategies of the company, and explained how some of the past strategies, and most recent strides forward, have helped to shape the direction of the company for 2017 and beyond.

Following, is a transcript of our exclusive interview:

CNA: First, let me start by saying that investor interest in PRHL is emerging, and while the sentiment is unequivocally positive, investors still have questions about legacy issues from the past few years. In 2014, PRHL entered into a proposed acquisition for 85% of Lexington Power & Light. Did that deal close and can you explain the history of that deal?

A: Yes, the deal indeed closed and we were well on our way selling their product. But soon after completion we learned that certain representations were not accurate. Their debt service (cost of capital) was much higher than represented and made their business impractical for us and as you would expect, there was a resulting lack of confidence in the management of LP&L. So, we unwound the deal.

CNA: Did this unwind actually provide some ultimate benefit?

A: Absolutely. In the short time we were operating we proved that the concept was sound. We sold a product, the “reset,” at a higher price than the market and we were successful in doing so. And our topline revenues showed this. But LP&L management and cost of cash we not suitable for us. For full transparency: when the credit facility for buying power is put in place it is typically for 3 years. LP&L’s $2,000,000 line cost them over $600,000 in interest and fees. We believed we could re-negotiate the line and did have a new term sheet in hand. However, LP&L had an administrative issue and they were unable to get an updated credit facility. This, we believed, would prohibit profitability. Necessitating our decision to unwind the deal.

But our initial success in sales indeed indicated that, with a more competitive, industry-standard cost of cash and a professional management team, we should achieve the projected 8 -10 % EBITDA on our AIC business. And let me just add that with a better-than-average credit facility and more expert management we could achieve 12% EBITDA… which we believe we are the path to achieving.

CNA: And, as to the second concern, the current outstanding share count: Do you think that having in excess of 300 million shares outstanding should be of concern to investors?

A: It is the market value of those shares which is the issue. With our 200,000 accounts alone, valued at $300 each, our portfolio value would be at $60 million (as we move existing customers, former customers and new sales to the supplier), which is more than double our current market Cap. So once we place the majority of these accounts and future accounts, into the Supplier, the stock price should reflect this. We anticipate it will take about 2 years to accomplish this. This does not take into consideration the real enterprise value of the company which can generate thousands of sales per month.

CNA: Over the past few years, PRHL has entered into some potentially lucrative deals. Back in 2012 and 2013, PRHL entered into a purchase agreement with The Power Company (TPC) to purchase 80% of the that company. How has that deal benefited PRHL?

A: TPC has been the catalyst for the growth of our company and PRHL was the catalyst for their growth. As we provided capital, TPC grew from 11,000 sales to over 200,000 and should produce an additional 80,000 this year (not accounting for expansion). These are not only customers for deregulated power, but become candidates for our other businesses, E3 (efficiency products and services) and of course AIC. This pure marketing machine is critical and fundamental to our business and has been successful beyond our projections.

CNA: So, with that deal allowing PRHL to benefit from a deregulated energy space, is PRHL now fully prepared to capitalize on an estimated $300 billion US market and what synergies has PRHL already realized from that deal?

A: PRHL has benefited tremendously from acquiring the majority of TPC. TPC has proven to be one of the TOP resellers in the nation. In Illinois, one of the most competitive markets in the nation, we have about 2% of the market already. As a comparison, there is another well-respected company that took 12 years to achieve 200,000 contracts, we did it in 3 years. They do over $100 million a year as a supplier and we expect to exceed their performance by our second year. Although our projections show slower growth, we have no way of knowing the impact of the portal but we expect it will be a game changer. This is very similar to what happened to Telecom. Do you remember years ago when everyone had to use Ma Bell for their long-distance telephone service? That changed when the telecom industry deregulated, which gave customers a choice and created a huge opportunity for the “baby bells.” Which created industry giants like Sprint and Verizon and made their thousands of investors rich. Not only those companies, but as the entire industry was rolled up, hundreds of companies benefitted. What were they buying? Customers. The same is now true in many states with the deregulation of electricity.

CNA: Can you explain deregulation in simple terms? Is PRHL already benefiting from the program?

A: Simply put, deregulation is a government program to protect consumers by assuring competitive pricing. Think how the telecom deregulation changed telephone charges – now understand, energy deregulation is estimated to be 11x bigger! Are we benefitting? Yes. We believe we are among the top 5% of resellers in the nation if not higher. We expect to maintain and grow our piece of this massively expanding market. We have proven this by our ability to capture about 2% of the Illinois market, again, one of the most competitive in the nation. We should only do better in other markets. As we obtain our licenses in other states and then launch our door-to-door and call center strategies we expect similar results. When we add our Energy Services Portal (ESP) and it’s affiliate marketing functions, we should see increased traction.

CNA: So, where exactly is the opportunity for PRHL?

A: We have a running start over our competitors. Opening “Deregulation” has been the only marketing strategy for many suppliers. They wait for the utility customer to come to them. We have been aggressively marketing to customers. We do not rely on others to control our fate. As each state opens, we have the ability to go in with our systems and rapidly deploy out strategies. We have only scratched the surface.

CNA: You mentioned and described The Power Company, but, there are two other subsidiaries within the Premier Holding Corporation portfolio, E3 and American Illuminating Company. Each of these subsidiaries offer distinct value propositions. Can you explain the role of each in delivering and building scale for PRHL?

A: AIC is the linchpin for financial success. While TPC has been garnering these 200,000+ contracts, they receive only a commission on those sales. As we migrate those contracts to the power supplier (AIC) we should see a 20x increase in topline revenue and a doubling of profitability on the same effort we are expending to gain only that commission. It is with the supplier where the portfolio value of the contracts is realized. This is where the $60 million in contract value would be shown.

E3, with its relationship with Sustainability Partners is a natural fit. After we have sold our existing clients their deregulated power, they become a trusted client for additional efficiency sales. SP will be offering products and services to our thousands of commercial clients. E3 will be offering Smart Home and other efficiencies to our residential clients.

CNA: E3 has a strategic partnership already in place with Sustainable Partners LLC., a Blackrock portfolio company. This sounds like a significant opportunity to imbed a large footprint in the space. How can PRHL leverage off this partnership?

A: Yes, this requires further discussion. Sustainability Partners has a model we believe will be just as disruptive to this market as Uber has been to taxi’s and Airbnb has been to hotels. We are proud to be among the select few to be able to offer their product to our commercial clients. They value our marketing expertise and we have inundated them with leads. We have over 5,000 commercial clients we are vetting for them and we expect this number to grow to between 30,000 and 50,000 in the ensuing years, especially with the roll out of ESP.

CNA: American Illuminating Company also deserves more attention, especially in that the relationship can position PRHL to benefit enormously from a revenue standpoint. What are you expecting AIC to deliver?

A: Right now TPC distributes its contracts among 30-40 different suppliers and those suppliers are reaping the benefits of TPC’s efforts for topline revenue and additional profitability. We plan to have 80% or more of residential and commercial customers to move over to AIC where we will then garner the entire utility bill as revenue and experience additional profits for the work TPC performs.

CNA: In examples that we went over, you described how the leverage from the AIC subsidiary may deliver exponential amounts of increased revenue. How can that happen?

A: Remember that TPC does a herculean effort to earn a commission on a sale. Let’s keep it simple and say that one residence consumes $100 of power each month. Our commission might be $2 – $5 per month. Not much, but it adds up. If we supplied that power we would record the entire utility bill as revenue… $100 as opposed to $2 – $5. In addition, if AIC makes 10 – 12% profit that’s an additional $10- $12 PROFIT, again compared with the $2 -$5 we were getting from one residential sale. Can you think of another industry where just by adding an entity in front of what you are already doing you can change the value proposition so dramatically? We have been making our current suppliers very rich. Our plan has always been to do that for ourselves and our shareholders.

CNA: Perhaps one of the most interesting aspects of PRHL is the Energy Sales Portal, which is truly a remarkable asset. Before we get into the benefits of the portal, can you provide an introduction of this technology?

A: Of course. The industry right now depends mostly on paper to perform these transactions. Each supplier has its own version of a contract and there is a time-consuming and laborious process of contacting a prospective customer, going back to a supplier and getting a quote based in their profile, awaiting the client to say yes, hand sign contracts and get third party verification. This method is fraught with inefficiencies and potential for errors. ESP automates this process, streamlining it, and providing rapid turn-around of quotes and compliance. This is a web-based tool that the sales person uses, either at their desk when they are on the phone with a prospect, or on a hand held device when they visit them at home, and it takes a process that might take 30 minutes and a few days for approval, to mere minutes and immediate approval.

CNA: I’ve heard investors say that the Energy Sales Portal can do for energy what Lending Tree did for the mortgage industry. How so?

A: Just as Lending Tree automated the loan processing function and disrupted how all loans are processed today, so should ESP impact the deregulated power sales industry. There is no universal sales tool for the industry. There are bits and pieces out there but no-one has put it all together, especially the “last mile” which is automating the communications between the sales person and the client. ESP could be the first universal (covering all suppliers and also the entire sales process from prospect identification to close and compliance verification), tool to accomplish this.

CNA: So, the portal can deliver web-based automated sales, as well as delivering enormously competitive efficiencies. From a competitor standpoint, does the Energy Sales Portal provide a significant competitive advantage for PRHL, maybe even keeping competitive threats to a minimum in the markets you serve?

A: There is a need for such a product and we have been testing and refining ours for years with the original intent of making it robust and available to all resellers, not just a narrow internal tool. We plan to offer the technology to ALL resellers. Now this may sound crazy to give our competitors our proprietary technology, but think it through. Instead of trying to acquire all these businesses, they, in essence, work for us. Not only will we get a piece of every transaction regardless of what supplier they use, but we will own the database. Protecting their client for deregulation is a given, but that database can be used for other non-power sales. Such as selling E3 products and services, or selling the information to solar companies or others who value knowing the energy profile of a prospect. And finally, since our supplier is among the offerings they present to their client, AIC can have “last look” and decide if they want to price to win. In that sense, it is like Progressive Insurance. We will show you our competitors’ prices and our own, creating a higher likelihood of winning the contract.

CNA: Of course, management is the key to driving all of the company’s strategic initiatives. PRHL has built quite a respectable and diversified team of talent. Can you highlight the members of your team, and explain how the diverse nature of this team is equipped to deliver near and long term success?

A: We have an impressive Board that is very involved in the strategic direction of the company. Dr. Woodrow W. Clark, II, MA3, Ph.D. was a contributing scientist to the U.N. IPCC that won the 2007 Nobel Peace Prize. He served as Manager of Strategic Planning for Energy at the Lawrence Livermore National Laboratory and was Senior Policy Advisor for Energy Reliability to then California Governor Gray Davis with a focus on renewable generation, advanced technologies and finance.

Board member Mr. Lane Harrison advised large multi- national corporations such as Bicoastal Corporation, (Formerly Singer Corp.) where he served as Director, and Bicoastal Financial Corporation, serving as President/Director. Mr. Harrison has over 30 years of business consulting and sale/marketing experience. He has lectured extensively to the professional advisor community.

Mr. Robert Baron is a director and committee member of various public companies, including PRHL. Prior public boards include, Hemobiotech and Suburban Bancorp. Mr. Baron was also owner and president of various companies including a subsidiary of Tultex Corp with over $200 million in revenues, and a privately held company with $80 million sales country wide.

Our Management team has decades of experience, and just to mention one. Mr. Patrick Farah who most recently co-founded U.S. First Energy (USFE). As CFO and CMO of USFE, Mr. Farah was instrumental in establishing the company’s exclusive partnership with Suez Energy – one of the 100 largest companies in the world. Mr. Farah’s company was the exclusive retail sales vendor for Suez Energy in the United States, where he oversaw the development of a total contract value with Suez of over $400 Million – more than 15 times the volume of Suez’s previous vendor. While procuring a residential base of 50,000 customers, USFE achieved the prestige title of top First Choice Power’s sales broker. USFE has subsequently enhanced its business model, and is now branded as The Power Company.

CNA: Let’s change course and discuss investment considerations and opportunity. How would you answer an investor if asked why he should buy PRHL stock?

A: If we are able to convert our portfolio value we should double our market cap within 3 year and this is not considering our enterprise value. Again, 200,000 contracts valued at $300 each is $60,000,000… and that is not counting the revenue that these contracts generate during their term. And that is using todays performance. We plan to continue to grow this number of contracts. If only at the current pace, that is 80,000 contracts a year. If we scale by expansion and the use of the portal, we should see even greater performance. We are poised to continue to build revenue and profits on a scale that is rarely seen in most industries.

CNA: If that same investor, after liking the considerations provided, asked about cash on hand and access to future capital, how would you answer that question?

A: We have over $2 million cash on hand. We have a PPM issued though WestPark Capital and we have investors standing by offering us up to $10 million should we need it when we execute our planned up-listing to Nasdaq. Cash is not an issue for the time being and foreseeable future.

CNA: Along those same lines, financial projections are a vital consideration for investors. Can you provide some financial projections, and in turn offer a projected asset valuation based on those projections?

A: By the end of Year 2 we expect AIC to do over $67 million topline, TPC will add $9 million and E3 $8.5 million. That totals around $85million in topline revenue, resulting in $3.5 million to the bottom line. Mind you this is still a ramp up year for AIC and shows only a 3% EBITDA for that unit. In the future, we will experience over 8 – 10, to maybe 12% on that business line. But even with only a $3.5 million EBITDA at 18x multiple, that’s a $64 million valuation. I hesitate to go beyond year 2 because it grows so rapidly it seems unbelievable, but the math is there.

CNA: Finally, many investors work hard to search out potential breakout stocks. Based on the known variables already in the PRHL arsenal, can you provide a best-case snapshot of PRHL five years from now?

A: Just adding the suppler will change our business dramatically on the same level of work we have been performing for 3 years. With our plans to expand into additional states, launch our sales portal, and partner with Sustainability Partners on additional large scale sales, our 5 year projections seem too good to be true. Just for AIC we go from $7 million in sales in Year 1 to $67 million in year 2. You can see the potential is tremendous for growth in the subsequent years.

End Interview

Stock price does not always reflect what a company is doing, and in the case of PRHL, this statement may prove true. Based on what management has told us, PRHL is positioning themselves to take advantage of a potential boon in the energy space. Once the company begins to gain momentum, taking advantage of its strategic and proprietary advantages, PRHL may very well emerge as a powerful player in the deregulated energy space. PRHL already has strategic partners in place, and has the trust from regulatory commissions across the United States. All that is left now is for PRHL to synchronize all of its initiatives together to produce a reliable and recurring revenue model. Once they do that, the share price and valuation will find its proper place, offering shareholders significant potential upside from current levels.

Like all investments in the micro and nano-cap world, investors should keep a focused eye on breaking news and company filings. Based on management’s remarks, PRHL is worthy of investment consideration for investors with a high risk, high reward trading strategy.

Disclosure: This article was written by Kenny Soulstring, and it reflects my own opinions and unique articulation. This article is not intended to offer investing advice, guarantee 100% accurate predictions or to be interpreted as providing a personal recommendation.

Additional Disclosure: I have no position in any stock mentioned, but may initiate a long position in PRHL within the next 72 hours.

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Aytu BioScience Inc AYTU Stock News

Aytu BioScience Inc (OTCMKTS: AYTU)

Let’s get an important disclosure out of the way quickly: I am long Aytu BioScience, and for good reason.

Now, while some may argue that this statement is merely an overzealous pitch, it isn’t. In fact, the case for AYTU being a hidden gem is just as powerful as it was in December of 2016, when I first presented my thesis. Even though the company’s share price hasn’t been able to catch its footing at the start of this new year, I contend that the fundamentals are already in place to justify a correction to the upside for the stock.

Remember AYTU?

AYTU has not been flying completely under the radar. The stock has enjoyed quite a bit of positive investor sentiment, acknowledging the company’s recent acquisitions as well as Aytu BioScience’s therapeutic and diagnostic platform in urology. Unfortunately, as is the case for many emerging biotech companies, share price is often less reflective of company accomplishment and potential than it is of simple market momentum, either positive or negative.

With the stock trading at roughly a dollar a share, perhaps much of that value is being hamstrung based on the fact that many investors have a misunderstanding of the company’s current position. To that end, perhaps a re-introduction to the company is in order, providing an even more robust thesis as to why AYTU may be undervalued at current levels.

Aytu BioScience Commercial Stage

Since 2016, the general description of AYTU remains the same. The company is a small, commercial stage specialty pharmaceutical company that remains focused on bringing innovative treatments and diagnostics to urologists around the world. Unlike many emerging companies that have no commercialization to speak of, AYTU currently has three FDA approved drugs and one CE Marked diagnostic device that hold the potential to address large needs within the urology field, and each of the products come with unique offerings. All four of the company’s products are currently commercialized, and Aytu BioScience has spent the better part of the last year building its fully integrated commercial infrastructure to support sales efforts and to generate revenue-building momentum.

AYTU has four commercially active products in market: Natesto, , ProstaScint, and Primsol each holding regulatory approval in the U.S., and MiOXSYS having regulatory clearance abroad. While Natesto may offer the most compelling reason for investment consideration into AYTU, MiOXSYS, ProstaScint and Primsol deserve a brief overview as well.

MiOXSYS For Male Infertility

MiOXSYS is a first-in-class in-vitro diagnostic device. Already CE marked and its regulatory pathway for U.S approval defined, MiOXSYS is being positioned as a new test that can rapidly help clinicians accurately identify infertile male patients, facilitating appropriate treatment strategies that can be immediately implemented. The speed of the results allows clinicians to take immediate action, improving the patient’s chance of fertility. The MiOXSYS device offers a recurring revenue model from the sale of disposable sensors, similar to a razor/razor blade sales and replacement model.

The market opportunity is substantial, with an international market estimated to be $825 million per year. In the U.S. AYTU’s target market of men between the ages of 25-44 adds additional market potential of nearly $100 million per year. The MiOXSYS device is already establishing a strong global footprint, with the device currently placed in 17 countries worldwide. Sales and revenue guidance is expected to be updated in the coming quarters.

ProstaScint For Cancer Imaging

ProstaScint is an established, proprietary monoclonal antibody imaging agent. It is the only FDA-approved prostate-specific SPECT imaging agent available on the market. ProstaScint works by binding glycoprotein expressed by prostate epithelium, prostate specific membrane antigen (PMSA).

Aytu BioScience’s ProstaScint enables accurate staging and guides appropriate treatment, with emphasis on both high risk and newly diagnosed patients, intended to identify specific organ defined disease. ProstaScint is being further positioned to address treatment failures with post-curative intent to identify candidates for potential localized therapy.

During its clinical trial, ProstaScint’s performance was clinically and statistically relevant. Plus, ProstaScint has already been significantly improved since FDA approval. The imaging produces greater than 95% accuracy, sensitivity, and positive predictive value in intermediate-risk and high-risk patients, demonstrating clear advantages over imaging procedures routinely being used and cleared by the FDA.

ProstaScint is a viable shot on goal, with ProstaScint’s score card indicating a 95.7% success rate for accuracy, a 95.7% success rate for imaging sensitivity, and a 100% success rate in its positive predictive value.

Primsol Solution

Primsol is the second revenue-generating product in the AYTU arsenal. Primsol has an established prescriber base, and the company is currently marketing Primsol in a pediatric co-promotion. AYTU sees opportunity for Primsol to be re-positioned to urologists to treat urinary tract infections.

The product has an opportunity to treat over 8.3 million office visits annually, and is ideal for elderly patients who have difficulty swallowing pills or are allergic to “sulfa” compounds. Like the other products in the Aytu BioScience portfolio, Primsol has advantages over the competition. It is the only FDA-approved liquid formulation of trimethoprim, and is the only approved standard of care antibiotic for treating uncomplicated urinary tract infections in a novel formulation without sulfamethoxazole.

Primsol is currently enjoying approximately 26% of current prescriptions being written to treat urinary tract infections, and this is without any aggressive commercial promotions in place.

Now, even though any of the former three products may serve an investor well once AYTU generates the marketing muscle to provide aggressive sales support, the largest near-term opportunity may lay in Natesto, another FDA approved product.

Natesto May Captain The Growth

Acknowledging the promise and market position of MiOXSYS, ProstaScint, and Primsol, Natesto offers perhaps the most lucrative current opportunity for AYTU, and Natesto has the potential to both disrupt the urology market and significantly improve the standard of care for patients. Natesto is the only FDA-approved nasally administered testosterone, and is prescribed and indicated to treat hypogonadism, commonly known as low-testosterone.

The prospective market for a potentially better treatment like Natesto is significant, with the market being pegged at roughly $2 billion per year for testosterone replacement therapies. The goal at Aytu BioScience is for management and the sales team to demonstrate why Natesto is a better option to treat low testosterone compared the current standard care of treatment. When making the comparison between Natesto and other treatments, a few aspects clearly stand out right from the get-go.

First, Natesto is nasally administered. In fact, it’s the only testosterone replacement therapy in the world that is delivered in that manner, and this benefit alone may allow the therapy to gain traction and aggressively grab a large portion of the $2 billion market. Natesto has been gaining traction since its launch in late 2016, with revenues continuing to ramp higher as the company sales force penetrates the barriers to entry, which sometimes keep more advantageous therapies, like Natesto, at a disadvantage when trying to face down the marketing and sales budgets of large pharmaceutical companies. While these barriers take time to dismantle, ultimately the patients have the right to be treated with the most effective course of treatment, and also to be offered product alternatives that have a highly proven profile of producing less side effects and unintended results.

For instance, Natesto, by being nasally administered, eliminates almost all of the exposure risk associated to testosterone treatment products that are applied topically to the skin or through painful subcutaneous or intramuscular injections. This advantage alone is significant, and represents a huge advance over currently marketed products.

What’s The Big Deal About Aytu’s Natesto?

“Huge opportunity”, he yelled – and here’s why:

Current methods of treatment require a patient with low testosterone to topically apply the treatment product on their skin, whereby it carries a substantial risk of skin transference from the patient to any person who has even minimal skin contact with the patient. Even in the event of casual contact with a female partner or child, there is concern that there can be a transference of testosterone to a family member or friend, which could potentially trigger a host of unwanted male-trait-enhancing effects in women and children. For patients who would rather not see their wives or daughters growing full beards as a side effect of testosterone contact, both the convenience and safety factor of Natesto is reason enough to choose the nasally administered treatment. From there, as long as the medication is properly secured, the likelihood of unintended testosterone treatments to people not requiring the therapy is almost entirely eliminated.

The FDA has not been blind to the issue, either. The potential transference of testosterone to unintended recipients has caused them to assign a “black box warning” to all topically applied testosterone treatment therapies. In contrast, Natesto does not have the same warning, alleviating a major safety concern while also dramatically improving the way testosterone is delivered. The question then becomes, why aren’t all doctors prescribing Natesto? Other than contending that big pharma has the power to control and influence doctor’s prescribing habits, the rest of the answer is “it makes no sense as to why Natesto is not the current standard of care.”

The “it makes no sense as to why Natesto is not the current standard of care” answer is based on several apparent product improvements and patient compliance efficiencies. First, AYTU’s Natesto is administered only 2-3 times daily, with one pump into each nostril. Patients achieve maximum concentration within 40 minutes after the first administration. These results are dramatically quicker than current methods, and because of the relatively short duration of action, patients are also afforded the flexibility in achieving their optimal testosterone levels throughout the day. Additionally, this 2-3 times daily administration more closely resembles the natural daily rhythm of hormonal production in the male body – ultimately enabling men with Low T to feel more like themselves.

From an IP standpoint, Natesto is patented into the year 2024, with multiple strong patent families protecting the product. Further, AYTU will enjoy an exclusive right to license Natesto in the U.S for at least that long, providing enough runway to address the benefits of Natesto to both urologists and to an industry, educating them on the treatment benefits of AYTU’s therapy and potentially changing the method as to how practitioners are treating low testosterone patients. And, while the trends take time, AYTU is demonstrating prescription growth for Natesto, and company management has expressed that, in 2016, current prescription levels had already exceeded expectations.

Other Natesto Benefits

Focused on an exclusive licensing agreement in the U.S., AYTU is targeting the 13 million men already diagnosed with low testosterone. Currently, the options include topical treatments, all which come with a “black box warning”. The warning is significant, by the way – it indicates that unintended transference could cause androgen/male trait enhancing side effects in women, including hair growth, male pattern baldness and additional male trait changes. These same effects may occur in children as well.

These risks are not only casual touch related, as transference can also occur from unwashed clothes, unwashed areas in a shower or bath, and unwashed counter space where the product had been stationed. For those who are feeling frisky, the warning says to be sure to wash the application area thoroughly with soap and water prior to contact. This may cause opportune moments to become quite inopportune, and relying on a set of wet-naps may not offer the protection intended.

In the pivotal clinical trial studying the safety and efficacy of Natesto, 91% of patients in the three time daily dosing study group achieved normal testosterone levels at day 90. Additionally, greater than 70% of men in the twice daily treatment group achieved normal testosterone levels at day 90 as well.

Of significant importance to many male patients, Natesto demonstrated notable improvement in the International Index of Erectile Function, causing statistically significant improvements in each of the five domains of erectile function, with a supporting P value of P<0.0001. The majority of the effect on erectile dysfunction was evident by day 30 of the study.

Natesto Position And Opportunity

Natesto is being positioned for active men with low-testosterone between the ages of 45-64, for whom convenience, discretion, and quick use of a testosterone replacement treatment is important. The nasal application is brief and easy to use, and does not interfere with or complicate travel or work schedules. Unlike topical solutions, it’s not time consuming to administer and allows for discreet dosing. It also eliminates other options, including inconvenient and costly in-office procedures with regular implants that have been shown to cause side effects, such as the ones shown on the Testopel prescribing information.

With 70% of the men in the Natesto pivotal trial indicating that they would switch from their current replacement therapy to treatment with Natesto, AYTU is encouraged to seize upon the market potential staring them in the face. With even a 5% market share, AYTU can be in a position to generate over $100 million in annual sales, and with prescriptions reaching an all-time high coming out of 2016, AYTU is positioned to capitalize further as the marketing and sales promotion continue to gain traction in the market.

To prove their commitment, AYTU, on Wednesday, announced that the company has increased its sales team by 20%, primarily driven by the increasing growth of Natesto, in both prescription and revenue. This move further punctuates the fact that Natesto is continuing to gain traction and successfully penetrate the low testosterone and testosterone replacement market. This addition establishes the AYTU footprint in over 40 territories, inclusive of multiple territories in large metropolitan areas that are being divided to optimize coverage. With the additional and coordinated geographic coverage, AYTU is targeting the estimated 7000 U.S. testosterone replacement therapy and low testosterone prescribers. AYTU expects that the sales force expansion will be completed by the end of June 2017.

AYTU Upside Opportunity

After reading the prospects for AYTU, the picture of the emerging gem scenario may have become more clear for investors. AYTU already has four commercialized, approved products in place, and is gaining momentum quarter over quarter.

Natesto was launched in August of 2016 and has seen consistent growth every month since that time, being supported by a full commercial infrastructure at AYTU. Beyond Natesto, AYTU is continuing to show sales growth of ProstaScint and Primsol, with ambitions to reclaim historical prescribing rates and to grow ProstaScint through distribution and out-licensing deals outside of the U.S.

For MiOXSYS, AYTU plans to leverage the substantial, growing market opportunity with support from the world’s leading centers in male infertility, with expectations to complete U.S. clinical and regulatory developments, leading to a U.S. product launch in 2017.

Management is strong, and features an experienced and entrepreneurial based management team with proven success in launching and growing specialty pharmaceutical companies. The founding management team, inclusive of Josh and Jarrett Disbrow, grew Arbor Pharmaceuticals from inception to over $127 million in net revenues in less than five years.

The company has over 50 employees, 35 of which are dedicated sales people. After recently completing a cash raise, and with warrants expected to generate additional near term capital, AYTU will be positioned to capitalize on immediate opportunities available to the company. With three FDA-approved products, and a platform that is addressing significant market opportunities, the modest $11 million market cap at the time of this writing appears to be measurably understated.

When all is said and done, gems don’t attract their ultimate value until they are cut and polished. The same standard can be applied to AYTU. The company has four promising products, with Natesto leading the way to drive near term growth and generous revenue opportunities for the company. Once the Natesto machine is in gear, investors can expect those revenues to offer the financial means necessary to generate traction for the other products in the AYTU platform.

To quote the great and prolific entertainer, Rihanna…once the pieces of the entire AYTU platform fall into motion, AYTU may surely “shine bright like a diamond.”

Disclosure: This article was written by Kenny Soulstring, and it reflects my own opinions and unique articulation. This article is not intended to offer investing advice, guarantee 100% accurate predictions or to be interpreted as providing a personal recommendation. What I can guarantee, though, is accurate research, thoughtful analysis and an enthusiasm about any stock that I cover.

While I seek to uncover emerging companies that I feel have true value and potential, it’s important that investors assign an appropriate time horizon to each of their investments, understanding that emerging companies need time to mature.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

Additional Disclosure: I am long AYTU.

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Gevo, Inc. GEVO Stock News

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Gevo, Inc. (NASDAQ: GEVO) Before we get into this interview, I'd like to extend a special thanks to my friend Joey who both set up the...