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I use my strength of basic common sense and DD skills to lead me down the path to profits. 2013 return of 108%, yet I will always remain humble.
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  • Update: Integral Technologies Bumps Up Quarterly Call And Delivers The Ultimate Teaser‏

    On February 5th, Integral Technologies (OTCQB:ITKG) announced they were bumping up their quarterly call to discuss the outlook for 2015. This was somewhat odd, considering Q2 earnings wouldn't be posted until at least the 15th and obviously the company wouldn't yet be prepared to talk about earnings.

    In listening to the hour and a half call last Wednesday that consisted of 15 minutes of prepared remarks followed by a lengthy Q&A, Integral's CEO told long-time investors that the wait was finally over and that within the next 3 to 6 weeks there would be a series of 8-K's and press releases, spelling out what sounds to be a very large deal with one of their previously announced Tier-1 partners.

    CEO Doug Bathauer began the conference call by saying the company was on the cusp of significant change and after many years of loyal shareholder-base patience, global commercialization of Electriplast was finally at hand. Bathauer stated that for the last three months, Integral had been in intense negotiations with one of their key partners and that the soon-to-be-announced deal ensures Integral's execution of its business plan concerning global commercialization, a bold statement that obviously holds Bathauer's feet to the fire. That said, Bathauer's two-year reign as CEO has shown him to have met every promise that he's made to date, so there's definitely an anticipatory excitement in the air.

    Integral told shareholders that their recent manufacturing facility move has led to a 50% reduction in facility labor costs and a tenfold increase in capacity. This, combined with the marriage to Conductive Composites has given the company the ability to satisfy supply chain standards required by Tier-1's and OEM's. Integral said it planned to put out a press release within 7 days to further expand on their manufacturing move. It was noted that during the move, Q2 sales were interrupted, but with $92K in revenue in the previous quarter, shareholders aren't holding their breath for Q2 results, but banking on what they anticipate to be a game-changing announcement(s) within 3 to 6 weeks.

    When one caller asked how the current market cap of slightly less than $50 million stacked up against the strength of the coming announcements, Bathauer replied with by saying, "If we capture 5% of a $30 billion market opportunity that no one's captured at all, you can do the calculations as to what our market cap would look like." He stopped short of actually making that forecast, but it's obvious from the last two conference calls that Bathauer has his sights somewhere in that range.

    The same caller asked about recent exercising of warrants and it was noted by Integral that 6-month restricted shares were entering into the hands of long-time, committed investors who see this last method of fundraising as a sign that the company is close to ending its issuance of stock. There's no doubt that warrant holders are confident in what they see, as the somewhat lack of liquidity in trading would be a problem if something ever went wrong in what the company is hoping to accomplish. Bathauer also reiterated his prior commitment to not raising the fully diluted share count.

    In the coming weeks after the series of 8-K's and press releases are made known, I will come back and analyze what the company looks like then and just how significant the change was. Many investors, some being around for up to 17 years are ready for the global commercialization phase and are eager to see how it will be shaped. If Bathauer can pull this off, there may be many distressed companies looking to him for his services at some point.

    Tags: ITKG
    Feb 17 9:55 AM | Link | 2 Comments
  • Integral Technologies: Game Plan Intact After First-Ever Recorded Revenue In Q1

    When choosing to invest in the risky OTC sector, the most important thing for an investor to monitor are the words and forward guidance delivered by the CEO. Too often, OTC CEO's tell investors one thing and do another. This applies to future dilution, forecasts and current events. I have seen far too many unsophisticated investors swindled out of their money when a story suddenly changes, yet the individual investor's sentiment tells him to hang in there, as surely he or she can't be wrong. Sentiment turns from extreme confidence to finger-crossing hope and in investing, hope is never a strategy. Having the ability and discipline to distinguish fantasy from reality and acting accordingly is a lucrative trait that sets apart the haves from the have nots.

    There is one company that trades on the OTC looking to uplist to a senior exchange, whereby its new CEO has done everything he said he would do and more along the way in turning around a floundering, but very promising company with a much sought-after conductive plastic technology, Integral Technologies, Inc. (OTCQB:ITKG). Whether it's concerning the signing of new contracts, cost-cutting, elimination of toxic preferred stock, elimination of toxic convertible debt or reduction of debt in general, Doug Bathauer has either met or exceeded every projection he's made during his reign and shareholders have watched the stock double over the past year with expectations of much more.

    Most of my readers know that I've been monitoring this evolving story ever since Bathauer took over as CEO and that I've been documenting this evolution for the past year. They also know just how critical I am of the OTC sector in general and how it seems almost impossible to find a company that actually follows through with what they promise and forecast to shareholders.

    I recently pointed out whereby ITKG stated they were leaving the development stage, entering the commercialization stage and that revenues would finally start to roll in after nearly two decades. Last week's 10Q revealed that for the first time in the company's history, there was an entry in the revenue column. Revenues of $91K were derived from three different sources, a portion of the license fee from Hanwha, engineering services provided to East Penn Mfg. and sales of Electriplast.

    What really caught the eye of shareholders was not only the fact that revenues were finally coming in, but that the quarterly loss had been cut to $840K from $1.27 million YOY, as Integral's EPS rose to -.01 from -.02 with expenses being cut by 22%. Even more impressive is the fact that debt has been reduced to $1 million from $2.8 million since Bathauer took over as CEO and there's no way on earth you would see this type of behavior from an OTC CEO unless they expected a drastic change to the future financial condition of the company.

    During last week's Q1 conference call, Bathauer fielded a question from a long time investor that wanted to know how debt was being paid down so drastically when revenues had just started to flow. In other words, where was the money coming from to reduce the debt ? Bathauer noted that most of the people signed into the conference call were indeed long time shareholders, many of them very significant holders that were from time to time exercising warrants in exchange for common stock, yet firmly holding on to that stock that's also restricted. He also reminded listeners that insiders have participated heavily in private placements, as they are extremely confident as to what's in store for the company. He was also very adamant in reiterating that the fully diluted share count will not change and obviously thanks in part to the luxury of exercising warrants while putting the stock in strong hands that have been around for years. This is evidenced by the increase in the stock price.

    Investors that have held the stock for years are waiting for the big payday and if Bathauer can continue to deliver on what he says, there will certainly be cause for celebration. He noted on an October 1st conference call that one Electriplast application alone can produce $127 million in annual revenue by year five and that the company is working to provide solutions that will bring in tens of millions of dollars annually, aside from this application.

    While this remains to be seen, the projected 30% margins would result in a stock that investors would see scrolling across the CNBC ticker and everyone I know associated with this company truly believes this will be the outcome. Based upon what the CEO has accomplished to date that backs up everything he's ever said or projected, I continue to find the story very compelling. In forming partnerships with several multi-billion dollar, multi-national companies in slightly over a one year period, companies like BASF (OTCQX:BASFY), Hanwha, East Penn & Delphi (NYSE:DLPH), all it will take for ITKG to be a homerun is if just one of these companies decides to use Electriplast as a solution for making an existing product more efficient. Integral Technologies claims they have started providing these efficient, conductive plastic solutions and it's now a matter of when the solutions will be implemented, not if.

    Nov 24 1:25 PM | Link | 1 Comment
  • Valuations Based On User Adoption In The Mobile Space

    In the valuation creation cycles of Google (NASDAQ:GOOG), LinkedIn (NYSE:LNKD), Instagram (owned by Facebook (NASDAQ:FB) after their billion dollar purchase), Whatsapp, which is rumored to be in acquisition talks with Google at a $1 billion dollar price tag and Pinterest, which recently raised $200 million of venture capital at a $2.5 billion dollar valuation, the best entry point for venture capital investors was when they spotted early rises in user adoption. User adoption almost always precedes revenue and valuation.

    The reason stand-alone mobile apps such as Instagram have a hefty price target after users adopt them is because in the mobile ecosystems, much larger companies can unlock massive amounts of value and turn unrealized revenue into realized revenue. The valuation of these companies doesn't pertain to old income statements or balance sheet metrics, but merely what is that user's worth in the future to company X.

    In the web-based world, we view Google as the gateway to the internet. The power of helping people find what they're looking for and selling advertising to companies wanting to reach this audience has turned into a business that did more than $50 billion dollars in revenue in 2012. With billions of users, Google is a case study in maximizing the value of user data. Very few companies have a better business model.

    Today and even more so in the future, websites will turn into apps and traditional ways of helping people find what they're looking for will change, as well as methods of accessing powerful user data.

    There's an interesting company named Mimvi (MIMV.OB) that's just now exiting the development stage and entering the revenue producing arena. The stock has been utterly crushed on recent financings down to the current market cap of $8.1 million here at the PPS of .118, but it certainly appears this has come to an end, as the company's CEO stated in Mimvi's first-ever conference call on April 16th, "We now have resources for the next several quarters." Translation in my book as a professional ? Once the last of the shares have been sold, MIMV can set its sights as high as it wants and Kasian Franks (company's Founder) has made it clear he sees a path to an eventual billion dollar valuation for the company. You look at Quixey with a current valuation of $150 million versus MIMV's $8.1 million and there's just no comparison, as Mimvi is growing like wildfire and probably not far from turning its first-ever profit. Investors look at Mimvi's recently filed 10-K and say, "Oh my God that's ugly," but what they don't pay attention to is that the company has now exited from the development stage and has several world-class products set for launch. One needs to look no further than the company's Alexa web traffic ranking to realize how fast the growth really is. Many speculators talk about a buyout and while it's rather early for that, it's certainly a possibility on down the road and we're not talking about years based upon what appears to be warp-speed user adoption. Mimvi recently launched their app in the Android store. Mimvi is based in Sunnyvale, CA, not far from Google's Mountain View headquarters. Like Google, Mimvi is also in the business of search and recommendations, except they focus on helping people find and discover mobile apps. They have a proprietary technology platform that has its basis in the Human Genome Project at Lawrence Berkeley National Laboratory, where Mimvi's Founder, Kasian Franks, developed a breakthrough genomic algorithm for gene comparison. This is the inspiration behind Mimvi's proprietary search and recommendation technology.

    The number of downloads in the first week of launching their app has been astonishing. The app has even been featured on the first page of "Trending Apps" in the Google app store.

    In addition, I love the new look of their search results, which went live last week.

    Imagine going back in time and being an early investor in Google when user adoption was just on the uptick in the most important sector of the next decade. Assuming Mimvi's user metrics continue down this path and looking at the mobile world as the next hot sector, I am very excited about the prospects for Mimvi in the future. The questions become .... how much are each of their users worth, those who are "searching" for a mobile app and how many users can they garner over the next year ?

    Disclosure: I am long MIMV.OB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: FB, GOOG, LNKD, ADTM, long-ideas
    Apr 30 3:44 AM | Link | 5 Comments
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