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During the IPO season Francis Gaskins, editor of & director of research for, regularly appears on CNBC TV, Bloomberg, & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg... More
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  • IPO Premium's Q1 2014 Beverage Outlook: KonaRed Corporation

    KonaRed Corporation (OTCBB: KRED) is an emerging, multi-product healthy beverage company that I believe you should put on your watch list for 5 key reasons: its distribution partnerships, critical retail penetration, product expansion, important supply agreements, and because they're a potential acquisition target


    Published by in return for potential subscriptions.


    KRED manufactures and sells antioxidant-packed, Hawaiian coffee fruit-based juices and teas in popular retailers such as Whole Foods, 7-Eleven, Walgreens, and many other stores throughout Hawaii, California, and Canada.

    Distribution partnerships

    KRED's retail expansion milestone achievements in 2013 and year-to-date are impressive by any measure.

    In January, KonaRed joined forces with powerhouse beverage company Splash Beverage Group to help expand KonaRed product distribution throughout the US.

    Splash Beverage Group is a heavy hitter with leaders whose experience includes Red Bull, E. & J. Gallo Winery, Marley Beverages, Sara Lee, and Nabisco.

    Splash Beverage Group is headed by seasoned beverage executives Robert Nistico and Kevin McClafferty, the successful former executive management team at Marley Beverage Company, one of the fastest-growing beverage start-ups in recent years.

    KRED also has a host of channel partners, distributors, and brokers that include FUNBeV Distributing, Verdi Consulting, and Paradise Beverages.

    Retail store expansion

    During the December 2013 quarter, KonaRed added three new locations, as its total surpassed 540 retail locations.

    During the September 2013 quarter KonaRed's retail network reached approximately 539 stores, with the addition of approximately 86 new locations. Retail accounts that comprised these additional stores included Sprouts and Whole Foods in California and Down to Earth, Napili Market, and Safeway in Hawaii.

    During the quarter June 2013, KonaRed added approximately 78 new locations to its retail network. New retail locations that began carrying KonaRed Original included more than 50 Albertsons stores in California and approximately 8 locations for Longs Drugs in Hawaii.

    Prior to the beginning of April 1, 2013, KonaRed Original could be found in approximately 375 locations throughout Hawaii. Some of the retail accounts that comprised these locations included 7-Eleven, Aloha Island Mart, Foodland, and Kmart.

    Also during 2013 KonaRed Hawaiian coffee fruit powder continued to be used as a branded ingredient in all 32 Jamba Juice locations in Hawaii

    The Product

    KonaRed utilizes Hawaiian coffee fruit as it's main ingredient. The coffee fruit is scientifically proven to have more antioxidant capacity than blueberries, acai berries, cranberries, and pomegranates.

    KonaRed products are distinguished from other players in the lucrative functional beverage sector like POM Wonderfful and O.N.E. Coconut Water because of its antioxidant-packed main ingredient--the Hawaiian coffee fruit.

    New Products

    KRED intends to expand distribution of its green tea product and launch its coconut water and powders--which can be added to water and other beverages--during Q2 2014.

    KRED recently entered into a 5-year supply agreement with Greenwell Farms of Hawaii to keep the coffee fruit coming, insuring that KonaRed will have a huge supply on hand to continue manufacturing products and to further expand its product line.

    A Potential Acquisition Target
    Large beverage companies have a track record of acquiring emerging but established specialty drink companies. Here are some examples.

    Functional Beverage Ownership

    • ZICO Coconut Water: purchased by Coke
    • Odwalla: purchased by Coke
    • Naked Juice: purchased by Pepsi
    • Sambazon Acai: purchased by InBev
    • O.N.E. Coconut Water: purchased by Pepsi
    • Gatorade: owned by Pepsi
    • Aquafina: owned by Pepsi
    • NOS Energy Drink: owned by Coke
    • Tropicana: owned by Pepsi
    • Monster Energy: owned by Coke
    • Honest Tea: owned by Coke

    With high sugar drinks on the decline and the company differentiating itself by using antioxidant rich coffee fruit as its main ingredient, this new small cap, healthy beverage company has potential that easy to swallow, and is one to put on your watch list for 2014.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: This article is published by in return for potential subscriptions.

    Jan 28 12:32 AM | Link | 1 Comment
  • Why Medley Capital's IPO (MCC) priced below range
    Today Medley Capital today priced its IPO at $11, down 18.5% from the range mid-point of $13.50.  MCC is trading now up 9%. 

    Just as $13.50 was too high, $11 was too low on a valuation basis.

    At $13.50 MCC was trying to get a 1.8% premium to net asset value.  That didn't work because typically Business Development Corps (BDC's) don't get a premium to net asset value. 

    For example, Golub Capital (NASDAQ:GBDC), THL Credit (NASDAQ:TCRD) and Gladstone Cap (NASDAQ:GLAD) were selling yesterday at discounts to net asset value of 0%, -2% and –2% respectively.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Jan 20 3:07 PM | Link | Comment!
  • Zogenix (ZGNX) IPO -- interesting new product, needs to reduce SG&A
    Nov 15wk IPO calendar

    Zogenix (NASDAQ:ZGNX) $78mm IPO
    with a market cap of $299mm at the prince range mid-point of $13
    Scheduled for Wednesday, November 17, 2010

    ZGNX Valuation Metrics

    . Interesting company successfully introducing a new product that generated $15mm in sales since introduced in January of 2010
    . However, SG&A expenses ballooned to an annual run rate of $54mm for the nine months ended September 30, 2010.  The nine month loss was $51mm
    . Zogenix is worth watching if it in fact IPOs and reduces SG&A expenses so that breakeven is in sight

    Products for the treatment of central nervous system disorders and pain, especially migraine and cluster headache
    . First commercial product, Sumavel™ DosePro™ (sumatriptan injection) Needle-free Delivery System, was launched in January 2010.

    Prescription Trends.
    Monthly prescription data shows that more than 11,500 aggregate prescriptions of Sumavel DosePro have been dispensed and that monthly total prescriptions have increased in each month since launch. In June 2010, more than 3,000 total prescriptions were dispensed and nearly 24% of total prescriptions were classified as refill prescriptions.
    Prescriber Base
    Weekly prescribing data shows that more than 4,300 physicians have prescribed Sumavel DosePro. In each month since launch, the number of repeat prescribers for Sumavel DosePro has increased. In addition, 32% of Sumavel DosePro prescribers had not written a prescription for needle-based sumatriptan injection in the previous 12 months and an additional 35% of prescribers had written, on average, less than one prescription per month for needle-based sumatriptan injection.
    Patient Dynamics.
    Analysis of patient data indicates that approximately 37% of patients filling a Sumavel DosePro prescription were new to the triptan market (i.e., had not filled a triptan prescription in the prior 18 months), 34% had active prescriptions for Sumavel DosePro and at least one additional triptan and 17% of patients had converted to Sumavel DosePro from another triptan. The remaining 12% of patients were continuing users of Sumavel DosePro. Importantly, of the patients who converted from another triptan, 75% converted from oral triptans, including tablets and fast melt formulations. (Source® Lx APLD January 2010 – June 2010)
    Patients’ Experience
    Patients’ experience with Sumavel DosePro has been positive based on feedback provided via the Connects Program from Infomedics. This internet-based program invites patients that received a Sumavel DosePro prescription to register online at the time of their prescription and then provide feedback after they have used the product to treat a migraine episode. Through August 7, 2010, 877 patient respondents who had used Sumavel DosePro have rated their satisfaction with Sumavel DosePro at an average score of 7.1 versus 5.5 for their prior migraine medication (9-point satisfaction scale, with 9 being “very satisfied”)

    .  $35mm to fund Phase 3 clinical trials and related development activities for ZX002
    . $35.4mm to fund the ongoing commercialization of Sumavel DosePro and for working capital and other general corporate purposes.

    ZGNX Valuation Metrics

    Nov 13 2:36 AM | Link | Comment!
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