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Harris L. Berenholz, CFA
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I like analyzing stocks, especially small caps and micro caps. My firm, Carpe Diem Advisors, LLC provides investment ideas, research and analytical services. Before establishing my firm I was (for 18 years) a Managing Director of Invemed Associates LLC, a New York Stock Exchange member firm,... More
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  • Premier Alliance (PIMO-1.03) Is An Emerging Cybersecurity Play

    Premier Alliance (PIMO--$1.03)

    · $30 million market cap

    · About 29 million fully diluted shares outstanding

    · Avg. Daily Volume: 59,423 shares

    · 52 week range: .45-1.24

    · No long term debt

    · Equity: $13.0 million

    · Cash : $3.3 million

    · Insiders own about 50%

    Investment thesis

    Premier Alliance provides a broad range of services to business and energy company clients that improve productivity, mitigate risk and maximize profits. Driven by an aggressive, proven and successful new management team and Board, the company is transforming itself into a major provider of state-of-the-art cyber security solutions that will turn--and become increasingly-- profitable over the next six to nine months, possibly as soon as yearend. Although the company is hardly known and the stock is unfollowed now, I think that this will change as the cybersecurity business…

    • Gains more traction
    • Experiences profitable and rapid growth
    • Increases in relative importance and
    • Gets more publicity

    The company could attract even more investor interest should management decide to either spin off or exit the non-cybersecurity businesses. Valuations for stocks in the cybersecurity industry are high.

    The company

    Premier Alliance, founded in 1995, is a leading provider of Cybersecurity, Energy & Controls, and Business Advisory Solutions. Its clients range in size from Fortune 100 companies to mid-sized and owner-managed businesses across a broad range of industries as well as local, state, and federal government agencies.

    The Business Solutions segment ($6.6 million in revenues/$872K loss in the first six months of 2014) provides business advisory and consulting services and solutions primarily in the areas of risk, data, organizational change, and cyber, as well as in business process re-engineering and workflow analysis, business intelligence, data analytics, organizational effectiveness, and system planning areas.

    The Energy Solutions segment ($1.4 million in revenues/$2.0 million loss) assesses, designs, and installs processes and automation to address energy regulation, strategy, cost, and usage initiatives. This segment also works with utilities to manage utility programs.

    The newest business segment (and the one with the greatest growth potential), Cyber Security Solutions, provides cybersecurity and advanced technology training capabilities, operational support and consulting services. Its personnel are internationally recognized and trusted providers of advanced cyber solutions, satisfying requirements for missions and enterprises globally. In the first half of the year this segment just about doubled sales (to $1.4 million) and lost $328,000 and, in my opinion, has the potential to grow its revenues to over $100 million in the next few years.

    Management

    The most significant change took place in May of this year when the company's Chairman, Joseph Grano, was named Chief Executive Officer. Mr. Grano's broad and varied experience includes…

    · Green Beret Captain

    · Senior management positions with Merrill Lynch and PaineWebber

    · Former Chairman and CEO of UBS/PaineWebber

    · Chairman of the Board of Governors of NASD

    · Chairman of the Homeland Security Advisory Council(2002-2005)

    Recognizing that energy grid and financial services were especially vulnerable, Mr. Grano identified cyber security services to be an especially promising new market for the company. Building on his knowledge of the market and his wide network of contacts, he identified and Premier Alliance then purchased root9B for $2.0 million.

    The Cybersecurity threat

    The increasing and increasingly more sophisticated cyber-attacks on large computer networks in a wide range of industries including government, financial institutions and health care underscores how vulnerable we are. Current network defense is reactive to the threat utilizing passive protection processes and procedures When a network has been attacked the standard operating procedure is to secure the host to avoid data loss and network degradation. On average in can take nine months or more for an attacker to be discovered, by which time serious damage will have been inflicted and sensitive information compromised. It has been argued by industry experts that the only way to develop an effective network defense is to understand the methodology, motivation and techniques used by sophisticated hackers to infiltrate organizations-and then aggressively develop systems that understand, hunt and counter these rapidly evolving threats before they do extensive damage.

    The solution

    Root9B has developed proprietary software and tool kits that can uniquely launch active, aggressive defense operations against hackers. Its employees are expert United States and law enforcement veterans (including National Security Agency).The root9B platform…

    · Is a unique turnkey solution

    · Complements established network defense mechanisms

    · Is able to identify, pursue and mitigate cyber threats

    · Provides the ability to hunt adversaries throughout friendly networks

    · Enables software analysts to pursue unknown attack vectors, once an incident or potential event has been identified.

    The appeal of root9B includes it's…

    Comprehensive programs designed to protect IT systems and data from hackers

    Training programs to tutor clients in the development and execution of cyber defense systems

    Top notch technical team (some from the highest ranks of the NSA and the nation's military) built and led by Eric Hipkins, a nationally recognized accomplished cyber and intelligence professional with over 25 years of experience.

    Growing client base of government organizations and major corporations

    Harris L. Berenholz, C.F.A.

    Disclosure: The author is long PIMO.

    Tags: PIMO
    Sep 17 10:06 PM | Link | Comment!
  • Sales Of International Fuel Technology's (IFUE-.12) Breakthrough Technology Solutions Are On The Upswing

    Recently, International Fuel Technology, Inc. announced that it is changing its corporate name to Fuel Performance Solutions, Inc. to more accurately reflect and communicate to the public the current and future nature of the Company's business operations. "Our Company has evolved into a provider of not just fuel additive products, but of solutions to better performing fuels for the end user," said Jonathan Burst, the Company's CEO. "This name change is a natural part of the progression we have made as a company.

    Dynamic changes in the fuel market -- changes to lower content sulfur in diesel; increasing percentages of bio-diesel being blended with diesel; varying underlying bio-diesel sources; and the ever present need to reduce fuel costs, maintenance costs and emissions -- are driving end users to seek solutions to optimize the performance of their fuel. Acting on market feedback obtained from its distribution partner network, IFT has developed, and continues to develop, specifically designed superior performing fuel additive formulations that provide solutions to these end user needs."

    Mr. Burst continued, "Our products have been scientifically proven to reduce carbon emissions and maintenance costs, increase fuel efficiency and have no effect on fuel composition. They are easy to blend, and are appropriate for use in a wide variety of applications."

    As stated by world renowned rail consultant Interfleet Technology, who has managed and overseen numerous laboratory tests and field demonstration processes utilizing DiesoLiFTTM, 'The DiesoLiFTTM fuel additive technology has been rigorously and independently scrutinized in both industry standard test bed procedures and within a major in-service field trial. Over the course of five trials (four test bed and one in-service field trial), there is clear evidence that a significant improvement in fuel consumption is realized by using DiesoLiFTTM. The methodology employed for the test measurements is considered to result in accurate and unequivocal data'.

    [Note: DiesoLiFTTM is a proprietary surfactant-based fuel additive formulation that provides a significant improvement in fuel economy and a reduction in harmful emissions. In addition, it increases fuel lubricity, provides detergency benefits and co-solves normal amounts of free water, which collectively reduce maintenance costs for the end user. The product is easy to use, only splash blending is needed, and its use has been proven to have no harmful effect on fuel composition, make-up or standard specification. The PerfoLiFTTM BD-Series provides superior oxidation stability and deposit formation control to bio-diesel and bio-diesel fuel blends. These desirable product characteristics are well-documented through extensive independent laboratory and field testing.]

    "The Company now has 26 sales professionals in addition to the sales forces belonging to distribution partners operating both in the US and internationally. The Company has reported sales (and repeat orders) in Europe, the Eastern Mediterranean, and the U.K. as well as the US."

    Mr. Burst added, "In calendar year 2013, customers purchased over $700,000 worth of DiesoLiFTTM and the PerfoLiFTTM BD-Series. That was more than double the figure for 2012. We anticipate continued growth in our revenues in the coming quarters stemming from continued reorders from existing clients and prospective customers completing their validation studies and beginning to purchase our product. One such prospective customer, a major New York City Agency, recently concluded a successful 18-month evaluation which demonstrated a meaningful fuel economy improvement."

    An independent report by Stuart A. Brown, an award-winning science and technology writer and reporter (stuartfbrown.com) arrived at some important and compelling conclusions:

    · Users of DiesoLiFT in the railroad, trucking and other industries consistently report fuel savings ranging from 3% to 6% and higher, lower exhaust emissions and a reduced need for maintenance of fuel system components such as fuel injectors and fuel filters. The consistency of these results is noteworthy.

    · The body of test data supporting IFT's claim for DiesoLiFT's fuel-conserving properties is overwhelming. The project manager at the UK railway consulting firm Interfleet stated that the "fuel economy claims by IFT are irrefutable."

    · Laboratory testing for fuel economy is considered highly reliable because of the controlled conditions and the established procedures that are adhered to.

    · IFT's technology can potentially apply to every diesel engine in the world since diesel engines have injection systems that spray pressurized fuel into the combustion chambers and therefore can benefit from DiesoLiFT's ability to enable more efficient and cleaner combustion.

    · DiesoLiFT is a patented formulation comprising a complex mixture of surfactant detergent substances.

    · Because of its surfactant chemical formulation, DiesoLiFT cannot cause any harm to engine components

    · DiesoLiFT's benefits also extend to users of biodiesel fuels.

    · Improved combustion reaction reduces emissions of pollutants including carbon monoxide, unburned hydrocarbons (soot), and less of the climate-altering gases oxides of nitrogen (NOx) and carbon dioxide (CO2).

    I have been an investor in IFUE shares for a number of years (admittedly, I was early) and have added to my position recently. Here's my thinking:

    The commercializing of a destructive technology is a long, arduous process. (It took Xerox some 20 years to commercialize its breakthrough technology.) IFUE developed unique, revolutionary additives but because of its small size it needed to repeatedly convince end users of its claims. Prospective customers were initially skeptical, wondering "how a little unknown company could invent something, possibly THE 'silver bullet' , that the big companies have been unable to do?"

    Now after nine years, the company's efforts are bearing fruit:

    1. Manufacturing will be handled by two major international chemical manufacturers
    2. Key distributors have been and will continue to be signed up in major markets
    3. The marketing force has been increased dramatically
    4. Patents have been applied for and/or issued
    5. The products now have brand recognition in the marketplace

    The company is focusing its efforts overseas because fuel prices are much higher there than in the U.S. and because marketing efforts can be more concentrated. In the U.K., for example, ATOC (railway industry trades group) initiated (and paid for) testing of the company's products and then shared the positive results with its members.

    As far as competing technologies….there aren't any. Extensive work with the rail operators and with Interfleet (a world renowned rail consultant) has confirmed that "there is no one out there with a fuel additive for fuel economy other than IFUE……period!"

    The company's products are being acknowledged as top performing technologies for bio-diesel stabilization. They have received the coveted "No Harm" certification from the German-based Association for the Quality Management of Bio-diesel (AGQM) under its "No-Harm and Efficiency" program. This certification is the international standard in the bio-diesel industry due to the demanding requirements necessary to obtain such certification and, in many countries, this is necessary before entering the market.

    It seems to me that International Fuel's stock risk-reward ratio is especially attractive now, in view of …

    1. Business momentum
    2. Enormous commercial business opportunities
    3. Extensive patent portfolio
    4. Management, including a Nobel Laureate, who heads research and maintains important business contacts in Brazil
    5. An improving balance sheet
    6. Prospect of announcements of orders over the next few months
    7. The stock's better technical picture

    Disclosure: I am long IFUE.

    Feb 19 2:29 PM | Link | Comment!
  • Business At International Fuel Technology,Inc. (IFUE-.12) Is Taking Off

    Recently, International Fuel Technology, Inc. announced that it is changing its corporate name to Fuel Performance Solutions, Inc. to more accurately reflect and communicate to the public the current and future nature of the Company's business operations. "Our Company has evolved into a provider of not just fuel additive products, but of solutions to better performing fuels for the end user," said Jonathan Burst, the Company's CEO. "This name change is a natural part of the progression we have made as a company.

    Dynamic changes in the fuel market -- changes to lower content sulfur in diesel; increasing percentages of bio-diesel being blended with diesel; varying underlying bio-diesel sources; and the ever present need to reduce fuel costs, maintenance costs and emissions -- are driving end users to seek solutions to optimize the performance of their fuel. Acting on market feedback obtained from its distribution partner network, IFT has developed, and continues to develop, specifically designed superior performing fuel additive formulations that provide solutions to these end user needs."

    Mr. Burst continued, "Our products have been scientifically proven to reduce carbon emissions and maintenance costs, increase fuel efficiency and have no effect on fuel composition. They are easy to blend, and are appropriate for use in a wide variety of applications."

    As stated by world renowned rail consultant Interfleet Technology, who has managed and overseen numerous laboratory tests and field demonstration processes utilizing DiesoLiFTTM, 'The DiesoLiFTTM fuel additive technology has been rigorously and independently scrutinized in both industry standard test bed procedures and within a major in-service field trial. Over the course of five trials (four test bed and one in-service field trial), there is clear evidence that a significant improvement in fuel consumption is realized by using DiesoLiFTTM. The methodology employed for the test measurements is considered to result in accurate and unequivocal data'. [Note: DiesoLiFTTM is a proprietary surfactant-based fuel additive formulation that provides a significant improvement in fuel economy and a reduction in harmful emissions. In addition, it increases fuel lubricity, provides detergency benefits and co-solves normal amounts of free water, which collectively reduce maintenance costs for the end user. The product is easy to use, only splash blending is needed, and its use has been proven to have no harmful effect on fuel composition, make-up or standard specification. The PerfoLiFTTM BD-Series provides superior oxidation stability and deposit formation control to bio-diesel and bio-diesel fuel blends. These desirable product characteristics are well-documented through extensive independent laboratory and field testing.]

    "The Company now has 26 sales professionals in addition to the sales forces belonging to distribution partners operating both in the US and internationally. The Company has reported sales (and repeat orders) in Europe, the Eastern Mediterranean, and the U.K. as well as the US."

    Mr. Burst added, "In calendar year 2013, customers purchased over $700,000 worth of DiesoLiFTTM and the PerfoLiFTTM BD-Series. That was more than double the figure for 2012. We anticipate continued growth in our revenues in the coming quarters stemming from continued reorders from existing clients and prospective customers completing their validation studies and beginning to purchase our product. One such prospective customer, a major New York City Agency, recently concluded a successful 18-month evaluation which demonstrated a meaningful fuel economy improvement."

    stock chart

    An independent report by Stuart A. Brown, an award-winning science and technology writer and reporter (stuartfbrown.com) arrived at some important and compelling conclusions:

    · Users of DiesoLiFT in the railroad, trucking and other industries consistently report fuel savings ranging from 3% to 6% and higher, lower exhaust emissions and a reduced need for maintenance of fuel system components such as fuel injectors and fuel filters. The consistency of these results is noteworthy.

    · The body of test data supporting IFT's claim for DiesoLiFT's fuel-conserving properties is overwhelming. The project manager at the UK railway consulting firm Interfleet stated that the "fuel economy claims by IFT are irrefutable."

    · Laboratory testing for fuel economy is considered highly reliable because of the controlled conditions and the established procedures that are adhered to.

    · IFT's technology can potentially apply to every diesel engine in the world since diesel engines have injection systems that spray pressurized fuel into the combustion chambers and therefore can benefit from DiesoLiFT's ability to enable more efficient and cleaner combustion.

    · DiesoLiFT is a patented formulation comprising a complex mixture of surfactant detergent substances.

    · Because of its surfactant chemical formulation, DiesoLiFT cannot cause any harm to engine components

    · DiesoLiFT's benefits also extend to users of biodiesel fuels.

    · Improved combustion reaction reduces emissions of pollutants including carbon monoxide, unburned hydrocarbons (soot), and less of the climate-altering gases oxides of nitrogen (NOx) and carbon dioxide (CO2).

    I have been an investor in IFUE shares for a number of years (admittedly, I was early) and have added to my position recently. Here's my thinking:

    The commercializing of a destructive technology is a long, arduous process. (It took Xerox some 20 years to commercialize itsbreakthrough technology.) IFUE developed unique, revolutionary additives but because of its small size it needed to repeatedly convince end users of its claims. Prospective customers were initially skeptical, wondering "how a little unknown company could invent something, possibly THE 'silver bullet' , that the big companies have been unable to do?"

    Now after nine years, the company's efforts are bearing fruit:

    • Manufacturing will be handled by two major international chemical manufacturers
    • Key distributors have been and will continue to be signed up in major markets
    • The marketing force has been increased dramatically
    • Patents have been applied for and/or issued
    • The products now have brand recognition in the marketplace

    The company is focusing its efforts overseas because fuel prices are much higher there than in the U.S. and because marketing efforts can be more concentrated. In the U.K., for example, ATOC (railway industry trades group) initiated (and paid for) testing of the company's products and then shared the positive results with its members.

    As far as competing technologies…There aren't any. Extensive work with the rail operators and with Interfleet (a world renowned rail consultant) has confirmed that "there is no one out there with a fuel additive for fuel economy other than IFUE……period!"

    The company's products are being acknowledged as top performing technologies for bio-diesel stabilization. They have received the coveted "No Harm" certification from the German-based Association for the Quality Management of Bio-diesel (AGQM) under its "No-Harm and Efficiency" program. This certification is the international standard in the bio-diesel industry due to the demanding requirements necessary to obtain such certification and, in many countries, this is necessary before entering the market.

    It seems to me that International Fuel's stock risk-reward ratio is especially attractive now, in view of …

    1. Business momentum
    2. Enormous commercial business opportunities
    3. Extensive patent portfolio
    4. Management, including a Nobel Laureate, who heads research and maintains important business contacts in Brazil
    5. An improving balance sheet
    6. Prospect of announcements of orders over the next few months
    7. The stock's better technical picture

    Disclosure: I am long IFUE.

    Feb 19 9:23 AM | Link | 1 Comment
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