As per the terms of the $3.5 million funding agreement that it received in September, OPTIMIZERx filed its Form S-1 with the SEC on Monday. (I didn't see the filing show up on EDGAR, so I called the Company and they indicated that it was filed late in the day and would not show up until Wednesday due to Veterans Day.) The filing clears the way for the Company to eventually move to NASDAQ once the registration statement is deemed effective by the regulatory bodies.
Although OPTIMIZERx is still a young company, the management team is a group of seasoned veterans and they have aligned with company with a couple of the largest players in the industry through their partnership with Cegedim Dendrite (Paris: CGM) and also S&H Digital of Sudler & Hennessey, a division of WPP Group (NASDAQ: WPPGY or London: WPP).
Cegedim Dendrite (www.dendrite.com) provides pharmaceutical companies around the world with vital support for successful Customer Relationship Management (CRM) activities. With nearly 200,000 sales representatives using its products worldwide, Cegedim Dendrite is the world's leading CRM provider for the life sciences industry. This business unit, created in May 2007 when the France-based CEGEDIM S.A. Group acquired Dendrite International, also provides sales, marketing and regulatory compliance solutions in more than 80 countries.
Sudler & Hennessey (www.sudler.com) is a global healthcare marketing and communications organization with offices around the world. The network includes two global communications agencies – Sudler & Hennessey, with U.S. headquarters in New York City, and Sentrix Global Health Communications, with U.S. headquarters in Berkeley Heights, New Jersey. S&H also has specialized divisions in medical education (IntraMed Educational Group, Precept Medical Communications, and Current Medical Directions), as well as in market research and strategic planning, branding, publication strategies, sales training (HealthAnswers), and digital solutions (S&H Digital).
I think this Company bears taking a very close look at for those who want to get into a small company that has not yet been put in front of the masses. The market that they serve is enormous and they are positioning themselves right in front of a massive wave as the baby boomer generation ages and prescription medications become a larger component of everyday life.
DISCLOSURE: I am a consultant to OPTIMIZERx and own stock in the Company. On my First Capital Investors website I have an investor fact sheet available on their client page @ http://www.firstcapitalinvestors.com/client_optimizerx.php
Tuesday, November 11, 2008
Thursday, November 6, 2008
Announcement: The Small Cap Investor Is Back
At the request of several people, I have decided to re-start The Small Cap Investor website and I am going to be focusing my attention on "Under The Radar" stocks.
The way it will work is this: Through an aggressive marketing program, I will develop a large opt-in subscriber stock trader database ... aka, my "traderbase". I expect that the traderbase will be somewhere around 50,000 members. I will be making stock selections that I believe offer interesting trading opportunities. For some picks I will receive compensation, for others I will not.
As always, if I have any type of conflict of interest, it will be disclosed. And for the record, I will usually have some type of conflict as I want to own these stocks as well. Assuming that I like a stock, if a company wants to pay me to introduce it to my traderbase, even better!
As many of you know, my focus for the last decade has been primarily focused on the small cap sector. Based on my experience in working as a consultant to over two dozen small cap companies, my belief is that many lightly followed stocks in this sector can experience signficant price appreciation if investors become focused on them and have the ability to buy stock.
My goal is not to simply get short term liquidity into a stock, although that may be a side effect. My goal is to introduce investors to stocks that are under the radar. Some of these investors will be short term, some will be long term. Regardless of which type of investor they are, when 50,000 investors decide that a stock that trades under the radar needs to get noticed, it will get noticed in a BIG way.
In the beginning the service will be 100% free to investors. Note: I reserve the right to offer additional services for a fee in the future, as well as conferences and the like, but in the beginning everything will be free.
The platform will have 3 primary components: 1) Research & Commentary, 2) Newsletter and 3) News Alerts.
1) RESEARCH & COMMENTARY: When I see an opportunity in a stock, I will issue a research report with commentary on the stock and why I think it offers an opportunity for price appreciation (or conversely, if I really dislike a stock, why I would short it). I will provide updates to my coverage stocks any time that it seems relevant to do so.
2) NEWSLETTER: I will bring back The Small Cap Investor newsletter. Presently, I am not sure if this will be quarterly or monthly as it will depend on how much time it takes me to write and how big it gets.
3) NEWS ALERTS: When I see a piece of interesting news on a stock that I have an interest in, I will send it out to my traderbase.
Again, 50,000 investors with the abillity to buy or sell stock has a lot of power. And, "In The World Of Investments, Knowledge Is Power".
I have not started marketing the program yet, as I have a lot of work to do in the design of the website and the layout of communications to members. However, I have set up the database for those who want to get signed up. Again, it is 100% FREE, no strings attached.
To be part of the Beta Testing, just sign up at: www.TheSmallCapInvestor.com
Hope to see your name on my list real soon.
The way it will work is this: Through an aggressive marketing program, I will develop a large opt-in subscriber stock trader database ... aka, my "traderbase". I expect that the traderbase will be somewhere around 50,000 members. I will be making stock selections that I believe offer interesting trading opportunities. For some picks I will receive compensation, for others I will not.
As always, if I have any type of conflict of interest, it will be disclosed. And for the record, I will usually have some type of conflict as I want to own these stocks as well. Assuming that I like a stock, if a company wants to pay me to introduce it to my traderbase, even better!
As many of you know, my focus for the last decade has been primarily focused on the small cap sector. Based on my experience in working as a consultant to over two dozen small cap companies, my belief is that many lightly followed stocks in this sector can experience signficant price appreciation if investors become focused on them and have the ability to buy stock.
My goal is not to simply get short term liquidity into a stock, although that may be a side effect. My goal is to introduce investors to stocks that are under the radar. Some of these investors will be short term, some will be long term. Regardless of which type of investor they are, when 50,000 investors decide that a stock that trades under the radar needs to get noticed, it will get noticed in a BIG way.
In the beginning the service will be 100% free to investors. Note: I reserve the right to offer additional services for a fee in the future, as well as conferences and the like, but in the beginning everything will be free.
The platform will have 3 primary components: 1) Research & Commentary, 2) Newsletter and 3) News Alerts.
1) RESEARCH & COMMENTARY: When I see an opportunity in a stock, I will issue a research report with commentary on the stock and why I think it offers an opportunity for price appreciation (or conversely, if I really dislike a stock, why I would short it). I will provide updates to my coverage stocks any time that it seems relevant to do so.
2) NEWSLETTER: I will bring back The Small Cap Investor newsletter. Presently, I am not sure if this will be quarterly or monthly as it will depend on how much time it takes me to write and how big it gets.
3) NEWS ALERTS: When I see a piece of interesting news on a stock that I have an interest in, I will send it out to my traderbase.
Again, 50,000 investors with the abillity to buy or sell stock has a lot of power. And, "In The World Of Investments, Knowledge Is Power".
I have not started marketing the program yet, as I have a lot of work to do in the design of the website and the layout of communications to members. However, I have set up the database for those who want to get signed up. Again, it is 100% FREE, no strings attached.
To be part of the Beta Testing, just sign up at: www.TheSmallCapInvestor.com
Hope to see your name on my list real soon.
- ~ The Small Cap Investor
Wednesday, October 29, 2008
CryoPort, Inc. (OTCBB: CYRX)
Lions and Tigers and Bears, oh my.
DuPont and Quest and Mayo ... OH MY!
I think that we will start to see operations begin to follow the news over the next 90 days. Be on the lookout for a build up of inventory and subsequent revenues.
As more people begint to learn about this company, in my opinion, the stock will begin to react. I think at this point it is simply a matter of time.
Six months ago, the train was moved from the storage shed to the trainyard. Two months ago, it pulled into the station. Now it is getting filled with fuel and preparing to leave the station. The train's name is: The CryoPort Express.
Out.
DuPont and Quest and Mayo ... OH MY!
I think that we will start to see operations begin to follow the news over the next 90 days. Be on the lookout for a build up of inventory and subsequent revenues.
As more people begint to learn about this company, in my opinion, the stock will begin to react. I think at this point it is simply a matter of time.
Six months ago, the train was moved from the storage shed to the trainyard. Two months ago, it pulled into the station. Now it is getting filled with fuel and preparing to leave the station. The train's name is: The CryoPort Express.
Out.
Monday, October 20, 2008
CryoPort (OTCBB:CYRX) - Coverage Initiation
Meehan Capital Management Group, Inc. published today for public review its October 7, 2008 Equity Report initiated with a Speculative Buy Rating and a 12-18 month price target of $7.50.
To review the report, which will be available for free review until October 31, 2008, click the following link: CryoPort, Inc. (OTCBB: CYRX) - 10-07-2008 Coverage Initiation
NOTE: Effective November 1, 2008, Meehan Capital Management Group will begin offering both Proprietary Research and Sponsored Research Coverage. Proprietary Coverage will be available to clients of the MCMG Private Client Group and available for purchase to interested parties. Our Sponsored Research will be paid for by the Company or a third party and will be available to interested parties at no charge.
Disclaimer: I received NO compensation for the writing of the research on CryoPort. From April 2005 thru August 2007, I served as a consultant to CryoPort and received minimum compensation in that position (mostly reimbursement of expenses). I have not been affiliated with the firm since August 2007. I do own stock and warrants in CYRX. See disclosure in the research report for additional disclosure material.
To review the report, which will be available for free review until October 31, 2008, click the following link: CryoPort, Inc. (OTCBB: CYRX) - 10-07-2008 Coverage Initiation
NOTE: Effective November 1, 2008, Meehan Capital Management Group will begin offering both Proprietary Research and Sponsored Research Coverage. Proprietary Coverage will be available to clients of the MCMG Private Client Group and available for purchase to interested parties. Our Sponsored Research will be paid for by the Company or a third party and will be available to interested parties at no charge.
Disclaimer: I received NO compensation for the writing of the research on CryoPort. From April 2005 thru August 2007, I served as a consultant to CryoPort and received minimum compensation in that position (mostly reimbursement of expenses). I have not been affiliated with the firm since August 2007. I do own stock and warrants in CYRX. See disclosure in the research report for additional disclosure material.
Wednesday, October 8, 2008
Update: Gateway International Holdings
After a much anticipated 2 year waiting period, I am pleased to report that on Wednesday, October 1, 2008, Gateway International Holdings, became a fully reporting Company once again by filing its Form 10k annual report with the Securities and Exchange Commission.
I wish to extend a word of congratulations to Tim Consalvi, CEO and Chairman of Gateway Int'l. Tim inherited a difficult sitution and has worked diligently to get the Company back in compliance with the SEC. I would also like to thank Steve Kasprisin, who in April returned to assist the Company as a contract CFO. Steve assisted the Company through the filing requirements and I am quite sure that Tim and the Board leaned heavily on Steve for his expertise in these regards.
Now the question is "When will the Company's stock begin trading again?" I have not received comment from the Company on this regard, but based on standard procedures, I would guess that right now the Company is in process of getting a broker/dealer to file a 15c2-11 with FINRA. Once this filing is cleared, the stock could begin trading.
I look forward to seeing this stock trade again. Prior to the SEC's deregistration of the Company's securities, the stock traded as high as $2.35 per share. Based on the information included in the 10k, this price might be a little high given the current economy, but I would not be surprised at all to see the stock settle around $1.50 per share when it begins trading. Last year the Company achieved almost $19.5 million in revenues. There were a lot of non-standard costs that were charged against earnings last year, including legal and filing fees. Historically, the Company has average around 12% pre-tax profit. Not assuming any growth, but simply maintaining during the upcoming 12 months, if the Company achieves 12% margins on equivalent sales, we would expect around $2.35M in profits. On a per share basis, based on reported TSO of 28,378,645, this would equate to approximately $0.083 of earnings per share. The stock has historically experienced internal growth over 25% per year based on ongoing operations. Rather than use aggressive estimates, assume a high end rate of 25% and a low end growth rate of 15%. Utilizing a PEG ratio of 1 (typical value investor model), that would indicate a stock with a fair value in the range of $1.25 to $2.07 per share (hence my middle of the road target of $1.50 per share).
I have liked this little "nuts and bolts" company for a long time. Clients in the MCMG Private Client Group own a fair amount of stock in this company and I remain increasingly optimistic that this investment will provide a very nice, time weighted return.
Disclosure: Through First Capital Investors, I provided consulting services to Gateway Int'l from 2003 thru 2007. I was one of the largest open market purchasers of the stock from 2003 thru 2005 and have purchased shares in private transactions since the deregistration. I continue to hold all of my shares. I have not worked with the Company at any time during 2008.
I wish to extend a word of congratulations to Tim Consalvi, CEO and Chairman of Gateway Int'l. Tim inherited a difficult sitution and has worked diligently to get the Company back in compliance with the SEC. I would also like to thank Steve Kasprisin, who in April returned to assist the Company as a contract CFO. Steve assisted the Company through the filing requirements and I am quite sure that Tim and the Board leaned heavily on Steve for his expertise in these regards.
Now the question is "When will the Company's stock begin trading again?" I have not received comment from the Company on this regard, but based on standard procedures, I would guess that right now the Company is in process of getting a broker/dealer to file a 15c2-11 with FINRA. Once this filing is cleared, the stock could begin trading.
I look forward to seeing this stock trade again. Prior to the SEC's deregistration of the Company's securities, the stock traded as high as $2.35 per share. Based on the information included in the 10k, this price might be a little high given the current economy, but I would not be surprised at all to see the stock settle around $1.50 per share when it begins trading. Last year the Company achieved almost $19.5 million in revenues. There were a lot of non-standard costs that were charged against earnings last year, including legal and filing fees. Historically, the Company has average around 12% pre-tax profit. Not assuming any growth, but simply maintaining during the upcoming 12 months, if the Company achieves 12% margins on equivalent sales, we would expect around $2.35M in profits. On a per share basis, based on reported TSO of 28,378,645, this would equate to approximately $0.083 of earnings per share. The stock has historically experienced internal growth over 25% per year based on ongoing operations. Rather than use aggressive estimates, assume a high end rate of 25% and a low end growth rate of 15%. Utilizing a PEG ratio of 1 (typical value investor model), that would indicate a stock with a fair value in the range of $1.25 to $2.07 per share (hence my middle of the road target of $1.50 per share).
I have liked this little "nuts and bolts" company for a long time. Clients in the MCMG Private Client Group own a fair amount of stock in this company and I remain increasingly optimistic that this investment will provide a very nice, time weighted return.
Disclosure: Through First Capital Investors, I provided consulting services to Gateway Int'l from 2003 thru 2007. I was one of the largest open market purchasers of the stock from 2003 thru 2005 and have purchased shares in private transactions since the deregistration. I continue to hold all of my shares. I have not worked with the Company at any time during 2008.
Tuesday, September 30, 2008
OPTIMIZERx (OTCPK: OPRX)
OPTIMIZERx (OTCPK: OPRX) announced today that it plans to partner with S&H Digital to launch the newest platform to assist in drug promotion and compliance: ADHERxE.
Full press release: OPTIMIZERx to Partner with Sudler and Hennessey.
Many people may not have heard of S&H Digital, but this is actually a very BIG development. S&H Digital is the interactive division of Sudler & Hennessey, which is one of the over 100 companies that make up the WPP GROUP (NASDAQ: WPPGY).
WPP Group, www.WPP.com is a global communications firm based out of London. WPP Group is one of the world's largest communications services groups, with more than 110,000 people working in over 2,000 offices in 106 countries.
WPP common shares are listed on the London Stock Exchange under the symbol WPP. American Depository Receipts (ADR) are traded in the United States on the NASDAQ under the symbol WPPGY.
This is a very important step for OPTIMIZERx as it further builds their brand and helps to put the company in front of every major pharmaceutical manufacturer on the planet.
Recently, OPTIMIZERx announced that they had received $3.5 million in funding from Midtown Partners & Co. LLC a FINRA member and SIPC Broker/Dealer. Given the current credit environment, this funding is looking even more impressive.
Full Press Release: OPTIMIZERx Closes $3.5M Funding
Stay tuned. This one could get interesting.
DISCLAIMER: I handle some public relations services for OPTIMIZERx and received a few restricted shares shortly after they became a public company. I have never sold any stock in this company and have no intention of doing so at this time. I just happen to really like the company and its management, so I agreed to help them on their public relations efforts, primarily regarding their press releases at this time.
Full press release: OPTIMIZERx to Partner with Sudler and Hennessey.
Many people may not have heard of S&H Digital, but this is actually a very BIG development. S&H Digital is the interactive division of Sudler & Hennessey, which is one of the over 100 companies that make up the WPP GROUP (NASDAQ: WPPGY).
WPP Group, www.WPP.com is a global communications firm based out of London. WPP Group is one of the world's largest communications services groups, with more than 110,000 people working in over 2,000 offices in 106 countries.
WPP common shares are listed on the London Stock Exchange under the symbol WPP. American Depository Receipts (ADR) are traded in the United States on the NASDAQ under the symbol WPPGY.
This is a very important step for OPTIMIZERx as it further builds their brand and helps to put the company in front of every major pharmaceutical manufacturer on the planet.
Recently, OPTIMIZERx announced that they had received $3.5 million in funding from Midtown Partners & Co. LLC a FINRA member and SIPC Broker/Dealer. Given the current credit environment, this funding is looking even more impressive.
Full Press Release: OPTIMIZERx Closes $3.5M Funding
Stay tuned. This one could get interesting.
DISCLAIMER: I handle some public relations services for OPTIMIZERx and received a few restricted shares shortly after they became a public company. I have never sold any stock in this company and have no intention of doing so at this time. I just happen to really like the company and its management, so I agreed to help them on their public relations efforts, primarily regarding their press releases at this time.
Friday, September 19, 2008
CryoPort, Inc. (OTCBB: CYRX)
Over the past two weeks I have had numerous private clients and outside investors contact me requesting my opinion on CryoPort (OTCBB: CYRX) and when/if I would make additional comments. Back in the summer, I indicated that "if it became necessary" that I could become an agent of change in this situation. Again, this is only if necessary to protect the interest of my clients. As a Registered Investment Advisor, I have a responsibility to ensure that I am doing everything I can to properly oversee our investments and if it means that I need to get involved in additional ways, I will.
I have been gathering data over the last couple of months, and I am currently putting together an Equity Research Report that I intend to publish through my firm, Meehan Capital Management Group (www.meehancapital.com). My current intention is to publish this Equity Report in October and in the report, I will discuss various aspects of the stock, valuations, potential deals and pitfalls, current financial stability, future financial outlook and more. The names and trading symbols of companies that "I believe" could be doing business with CryoPort in the future will be included in my report.
I am hoping that we will hear some communications from the company before I issue the report as a detailed shareholder communication could clear some unresolved items that I have. I will attempt to once again reach out to company management and I hope that they will speak frankly with me as to the ongoings of the business. If they will not, I will utilize the best information that I have and make an opinion.
I have been told by the Company that the Annual Shareholder meeting will be discussed at the 4th Quarter Board of Directors meeting. Thus far, I have not received clarification as to whether it is "fiscal" 4th quarter or "calendar" 4th quarter (CryoPort's year end is 3/31). In the event that there is not a shareholder meeting held by the end of November, I am considering using the rules set forth in CryoPort's ByLaws to call a shareholder meeting utilizing the appropriate level of shareholder participation. The shareholder meeting will be open to all shareholders and I believe that if company management is forced to meet face to face with its sharholders, they will finally understand that investors want to see action NOW and put additional efforts into closing a deal.
For shareholders who are concerned with the lack of transparency being exhibited by this company, the only thing that I can say is to contact the company and let them know your concerns. I think that most investors out there understand my position by now, but the Equity Report will provide a clear explanation of my opinion of the stock.
In the meantime, I hope that everyone has weathered the current financial fiasco without too much stress and maybe even made a few bucks.
I have been gathering data over the last couple of months, and I am currently putting together an Equity Research Report that I intend to publish through my firm, Meehan Capital Management Group (www.meehancapital.com). My current intention is to publish this Equity Report in October and in the report, I will discuss various aspects of the stock, valuations, potential deals and pitfalls, current financial stability, future financial outlook and more. The names and trading symbols of companies that "I believe" could be doing business with CryoPort in the future will be included in my report.
I am hoping that we will hear some communications from the company before I issue the report as a detailed shareholder communication could clear some unresolved items that I have. I will attempt to once again reach out to company management and I hope that they will speak frankly with me as to the ongoings of the business. If they will not, I will utilize the best information that I have and make an opinion.
I have been told by the Company that the Annual Shareholder meeting will be discussed at the 4th Quarter Board of Directors meeting. Thus far, I have not received clarification as to whether it is "fiscal" 4th quarter or "calendar" 4th quarter (CryoPort's year end is 3/31). In the event that there is not a shareholder meeting held by the end of November, I am considering using the rules set forth in CryoPort's ByLaws to call a shareholder meeting utilizing the appropriate level of shareholder participation. The shareholder meeting will be open to all shareholders and I believe that if company management is forced to meet face to face with its sharholders, they will finally understand that investors want to see action NOW and put additional efforts into closing a deal.
For shareholders who are concerned with the lack of transparency being exhibited by this company, the only thing that I can say is to contact the company and let them know your concerns. I think that most investors out there understand my position by now, but the Equity Report will provide a clear explanation of my opinion of the stock.
In the meantime, I hope that everyone has weathered the current financial fiasco without too much stress and maybe even made a few bucks.
Thursday, September 4, 2008
Update: Gateway International Holdings
Just a quick update to make everyone aware that Gateway International Holdings has filed an ammended Form 10-12.
Amended Form 10-12G
I don't have anything to report at this time, other than it seems evident that management is moving through the process. Given that this is the 2nd amendment (3rd filing including the original submission), I am hopeful that the stock will be reporting and trading during the 3rd or 4th quarter of this year.
Should any positive news that can be reported come my way, I'll keep you posted.
Amended Form 10-12G
I don't have anything to report at this time, other than it seems evident that management is moving through the process. Given that this is the 2nd amendment (3rd filing including the original submission), I am hopeful that the stock will be reporting and trading during the 3rd or 4th quarter of this year.
Should any positive news that can be reported come my way, I'll keep you posted.
Wednesday, August 20, 2008
CryoPort (OTCBB: CYRX)
I have received a number of calls and emails over the last several days asking for my opinion on the CryoPort quarterly report. I have been dealing with and preparations for Tropical Storm Fay, which we thought was going to hit us directly as a potential hurricane, so I have not had time to update before now. Thankfully, my area has thus far been spared a majority of the effects of this storm, but say a prayer for those in the Melbourne, Florida area as they have received in excess of 24" (2 FEET!) of rain over the last 2 days and it is still raining.
As to CryoPort's 10Q. Well, unfortunately it is about what I expected. There is a very small buildup of inventory and they spent about $2M of the cash they have brought in during the past year. Now, if there was something to show for that cash, I would feel a little better. However, unless I am just missing something, I don't see assets on the books that indicate to me that those funds were used for much other than covering operations and old debts. I was hoping for an announcement of some type of deal, but it has not materialized to date. It is hard for me to understand the idea of getting ready to roll out the program in any meaningful way, while having virtually no inventory and having actually shipped very few units, but I feel sure they have their reasons.
I will say this about Mr. Berry. Peter has run a pretty tight ship for several years, often times stretching money as far as it could possibly go. That said, I don't think the company is wasting money. On the contrary, he is generally a very good steward of the funds. My biggest area of concern is that since announcing production began in December, CryoPort has only produced around $100k of product. That would be about $15k (dollars) per month or maybe a couple hundred shippers each month. Something doesn't make sense in that scenario. Either they have not been in manufacturing as we were led to believe with company press releases, or the inventory that was supposedly being built up is not being reflected on the books as one might expect. I suspect that the company has only made as many units as the pilot programs required, which is fine, but it does seem strange to think that the roll out is near, yet no inventory has been created.
I will be asking some questions to try to get some answers and will report my findings on this blog in the future. I have heard rumblings from a couple of sources that indicate there may be something coming soon, confirming the comments in the shareholder letter. However, I can not confirm anything at this time as to either who the deals are with and at what level. Hopefully I can get some clarity over the next couple of weeks. Perhaps there will be news in that time frame.
If I have not received confirmation or clarification as to the business developments alluded to by Mr. Berry in the shareholder letter by the end of August, I will request a firm date for the annual shareholders meeting. Last year this was held in October, and I would expect roughly the same this year. I have several large shareholders, plus myself, that are interested in attending this year's meeting and we need appropriate notice to address any scheduling conflicts so that we can attend. If a firm date is not provided, I will politely help provide one by calling for a shareholder's meeting with the proper notice and voting minimums.
I am hopeful that my involvement as anything other than a shareholder and the biggest cheerleader on the street will become a moot point. However, if we happen to fall back into a communications rut, I don't intend to stay on the sidelines.
As to CryoPort's 10Q. Well, unfortunately it is about what I expected. There is a very small buildup of inventory and they spent about $2M of the cash they have brought in during the past year. Now, if there was something to show for that cash, I would feel a little better. However, unless I am just missing something, I don't see assets on the books that indicate to me that those funds were used for much other than covering operations and old debts. I was hoping for an announcement of some type of deal, but it has not materialized to date. It is hard for me to understand the idea of getting ready to roll out the program in any meaningful way, while having virtually no inventory and having actually shipped very few units, but I feel sure they have their reasons.
I will say this about Mr. Berry. Peter has run a pretty tight ship for several years, often times stretching money as far as it could possibly go. That said, I don't think the company is wasting money. On the contrary, he is generally a very good steward of the funds. My biggest area of concern is that since announcing production began in December, CryoPort has only produced around $100k of product. That would be about $15k (dollars) per month or maybe a couple hundred shippers each month. Something doesn't make sense in that scenario. Either they have not been in manufacturing as we were led to believe with company press releases, or the inventory that was supposedly being built up is not being reflected on the books as one might expect. I suspect that the company has only made as many units as the pilot programs required, which is fine, but it does seem strange to think that the roll out is near, yet no inventory has been created.
I will be asking some questions to try to get some answers and will report my findings on this blog in the future. I have heard rumblings from a couple of sources that indicate there may be something coming soon, confirming the comments in the shareholder letter. However, I can not confirm anything at this time as to either who the deals are with and at what level. Hopefully I can get some clarity over the next couple of weeks. Perhaps there will be news in that time frame.
If I have not received confirmation or clarification as to the business developments alluded to by Mr. Berry in the shareholder letter by the end of August, I will request a firm date for the annual shareholders meeting. Last year this was held in October, and I would expect roughly the same this year. I have several large shareholders, plus myself, that are interested in attending this year's meeting and we need appropriate notice to address any scheduling conflicts so that we can attend. If a firm date is not provided, I will politely help provide one by calling for a shareholder's meeting with the proper notice and voting minimums.
I am hopeful that my involvement as anything other than a shareholder and the biggest cheerleader on the street will become a moot point. However, if we happen to fall back into a communications rut, I don't intend to stay on the sidelines.
Wednesday, August 13, 2008
CryoPort (OTCBB: CYRX)
Today, CryoPort released a letter to shareholders (click HERE to read) from Mr. Peter Berry. While I am pleased to see that the Company is communicating with its shareholders, I am just not quite sure what the point of this particular letter was supposed to address.
In case you have not read it, the letter rehashed much of the same verbage from several prior press releases. Mr. Berry stated that the Company has made significant progress inroads with CRO's (Contract Research Organizations) and that the company has over $2 million in cash on hand which will be enough to support the CryoPort Express Shipper rollout, including manufacturing and recycling.
My first reaction to the shareholder letter is that there are probably not going to be many positives in the Q1 financials that are expected out later this week and this is an attempt to soften the blow.
My second reaction is that this is a method to buy time with shareholders. I understand that when dealing with large companies like FedEx or a big medical company there will be delays and this requires patience. I get that and I am remaining patient as I have been for a number of years.
These two reactions both get back to the same point: What is the point of the letter?
We know that the CryoPort Express Shipper has been completed since January 2007 ( Read January 8, 2007 Release).
We know that after receiving over $4M in net funding last fall, CryoPort started producing shippers ( Read Dec 6, 2007 Release).
We know that CryoPort is partnered up with FedEx (NYSE: FDX), (Read Dec 19, 2007 Release) so I think we can feel fairly comfortable that the product is legit.
We have known for a while that pilot programs were underway for pharmatceutical firms as of April 2007 (Read Apr 23, 2007 Release). Additionally, CryoPort started shipping stem cells for Celprogen in December 2007 (Read Dec 20, 2007 Release).
We know they were shipping internationally for Quest Diagnostics (NYSE: DGX) (Read Apr 17, 2008 Release).
We know that CryoPort received an additional $1.0625M in follow-on investment back in June 2008 (Read June 10, 2008 Release).
So where does all of this information leave investors? Well, I have a couple of items that I will be trying to answer in the near term. Since the company has received $5.0625 million in funding over the last 12 months, and according to Mr. Berry there is currently over $2 million on hand, what has been accomplished with the other roughly $3 million that has apparently been used? This company has always run on a pretty tight operational budget, so unless something has changed in the spending patterns, there should be something else that is absorbing a fair amount of cost. That should not be too hard to determine because CryoPort started manufacturing the express shippers approximately 9 months ago (see news link above). I expect to see some of that production begin to show up in the quarterly reports. If they are shipping pilot programs and manufacturing units as described in press releases and their regulatory filings, I would also expect to see some initial revenue figures begining to show up on the financial statements.
I get the impression that some investors want to see "big" results in the upcoming financials. Prior to the shareholder letter, I did not expect to see much. After the shareholder letter, I do not expect to see much. What is most important from my perspective is that the Company is moving in the right direction. If CryoPort has $2 million remaining of the money it raised over the past year as Mr. Berry stated, it would indicate that CryoPort has spent approximately $3 million over the last 10 months, translating into a burn rate of approximately $300k per month. Not to get down to specifics without all of the information, but that would leave about 6-8 months of operating capital remaining at the implied rate. Knowing Peter personally, I feel sure that it is being handled appropriately, but I also believe that the owners of the company (both my clients and others) have a right to know how their money is being spent. Since this has not been easy to determine, it will require a little more effort.
I am not sure as to when the Annual Shareholders Meeting will be scheduled (I would expect early fall), but I would hope that management will be prepared to clearly demonstrate to the owners as to how the company is progessing. I believe that being transparent with your investors is a trademark of all successful companies. I would also hope that by the time the meeting arrives there will be some significant developments that will give everyone a positive outlook.
Closing comments from today's press release: "In closing, I would like to thank all of our shareholders for their continued support and look forward to reporting significant sales events in the not too distant future. - Peter Berry"
At this point it is about measuring the performance and to do that we need actual data and hard numbers. Hopefully we will be getting them soon. The only questions remaining are what is "significant sales" and what is "not too distant future"? As soon as these questions are answered, along with some reasonable transparency to allow investors to properly evaluate the merits of this stock, I believe that the market will begin to recognize the extraordinary value that this company has in its future.
In case you have not read it, the letter rehashed much of the same verbage from several prior press releases. Mr. Berry stated that the Company has made significant progress inroads with CRO's (Contract Research Organizations) and that the company has over $2 million in cash on hand which will be enough to support the CryoPort Express Shipper rollout, including manufacturing and recycling.
My first reaction to the shareholder letter is that there are probably not going to be many positives in the Q1 financials that are expected out later this week and this is an attempt to soften the blow.
My second reaction is that this is a method to buy time with shareholders. I understand that when dealing with large companies like FedEx or a big medical company there will be delays and this requires patience. I get that and I am remaining patient as I have been for a number of years.
These two reactions both get back to the same point: What is the point of the letter?
We know that the CryoPort Express Shipper has been completed since January 2007 ( Read January 8, 2007 Release).
We know that after receiving over $4M in net funding last fall, CryoPort started producing shippers ( Read Dec 6, 2007 Release).
We know that CryoPort is partnered up with FedEx (NYSE: FDX), (Read Dec 19, 2007 Release) so I think we can feel fairly comfortable that the product is legit.
We have known for a while that pilot programs were underway for pharmatceutical firms as of April 2007 (Read Apr 23, 2007 Release). Additionally, CryoPort started shipping stem cells for Celprogen in December 2007 (Read Dec 20, 2007 Release).
We know they were shipping internationally for Quest Diagnostics (NYSE: DGX) (Read Apr 17, 2008 Release).
We know that CryoPort received an additional $1.0625M in follow-on investment back in June 2008 (Read June 10, 2008 Release).
So where does all of this information leave investors? Well, I have a couple of items that I will be trying to answer in the near term. Since the company has received $5.0625 million in funding over the last 12 months, and according to Mr. Berry there is currently over $2 million on hand, what has been accomplished with the other roughly $3 million that has apparently been used? This company has always run on a pretty tight operational budget, so unless something has changed in the spending patterns, there should be something else that is absorbing a fair amount of cost. That should not be too hard to determine because CryoPort started manufacturing the express shippers approximately 9 months ago (see news link above). I expect to see some of that production begin to show up in the quarterly reports. If they are shipping pilot programs and manufacturing units as described in press releases and their regulatory filings, I would also expect to see some initial revenue figures begining to show up on the financial statements.
I get the impression that some investors want to see "big" results in the upcoming financials. Prior to the shareholder letter, I did not expect to see much. After the shareholder letter, I do not expect to see much. What is most important from my perspective is that the Company is moving in the right direction. If CryoPort has $2 million remaining of the money it raised over the past year as Mr. Berry stated, it would indicate that CryoPort has spent approximately $3 million over the last 10 months, translating into a burn rate of approximately $300k per month. Not to get down to specifics without all of the information, but that would leave about 6-8 months of operating capital remaining at the implied rate. Knowing Peter personally, I feel sure that it is being handled appropriately, but I also believe that the owners of the company (both my clients and others) have a right to know how their money is being spent. Since this has not been easy to determine, it will require a little more effort.
I am not sure as to when the Annual Shareholders Meeting will be scheduled (I would expect early fall), but I would hope that management will be prepared to clearly demonstrate to the owners as to how the company is progessing. I believe that being transparent with your investors is a trademark of all successful companies. I would also hope that by the time the meeting arrives there will be some significant developments that will give everyone a positive outlook.
Closing comments from today's press release: "In closing, I would like to thank all of our shareholders for their continued support and look forward to reporting significant sales events in the not too distant future. - Peter Berry"
At this point it is about measuring the performance and to do that we need actual data and hard numbers. Hopefully we will be getting them soon. The only questions remaining are what is "significant sales" and what is "not too distant future"? As soon as these questions are answered, along with some reasonable transparency to allow investors to properly evaluate the merits of this stock, I believe that the market will begin to recognize the extraordinary value that this company has in its future.
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