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JoeNatural
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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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  • 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.

    Disclosure: The author is long ITKG. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

    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
  • Truli Media Group (TRLI) - Fascinating Interview With CEO Michael Jay Solomon

    As a Christian who spends nearly half his life on the internet for business related purposes, I have yet to come across a site (when browsing for fun) that offers children, family and faith-based oriented content that really grabs my attention .... until now.

    A few weeks back while Googling for Christian related content, I found a publicly traded company called Truli Media Group (OTCPK:TRLI) and upon visiting their website at Truli.net, I realized that there was finally a place that acts as a conduit for the unmet needs and desires of millions of frustrated internet users. In simultaneously finding that Truli also had a Facebook page, I was amazed there were already over 500,000 "likes" of the site by users, a number that currently stands at 731,484 today. As if this isn't impressive enough, Truli has now also established over 75,000 followers on Twitter.

    This past week, I was able to reach the CEO of Truli and was greeted with open arms when I requested an interview. The fascinating Q&A interview is logged below.

    Q = question from me .... MJS = answer from Michael Jay Solomon

    Q: Michael, can you give my readers a brief history about yourself and what you've accomplished over the last fifty seven years when you began your career ?

    MJS: I started out with United Artists in 1956 when I was eighteen years old, loading films on trucks while going to NYU at night. When I was twenty one, UA sent me to Panama to open the Central American territory for American films, so I traveled to Guatemala, Nicaragua, Costa Rica and Honduras. A year later I went to Colombia and a year after that I was made the manager over Peru and Bolivia. At age twenty six, MCA (now Universal NBC) hired me to start their Latin American TV division. I moved to Mexico and over the next few years I put most of the TV networks on air. I was then made Vice President and traveled the world. In 1978, I started Telepictures. The company went public in 1980, the stock quickly rose from $3.00 to $32.00 and seven years later we bought Lorimar Telepictures and then MGM Studios. I personally hired Judge Wapner for the People's Court and we had many other successful television shows, such as Dallas and Knot's Landing. Four years later, I was contacted by Warner Brothers International Television and subsequently sold the company I started thirteen years earlier with $1 million dollars, for $1.2 billion dollars, at which time I became the President of Warner Bros. International for the next five years. I have served on the Board of Overseers for the prestigious NYU Stern School of Business for the past 28 years. After many years, I am still married to my beautiful wife, Luciana Paluzzi, famously known for her role as Fiona Volpe in Thunderball, a James Bond 007 thriller starring Sean Connery.

    Q: You launched Truli.net on July 10th (my birthday) of last year and at age seventy five, why not call it a day and relax in comfort the rest of your life ? Why press on after so many impressive accomplishments on such a massive scale ?

    MJS: Retiring is not in my DNA and I'm as enthusiastic as ever about meeting the needs of a very fragmented $9 billion dollar market with little to no competition. There are over 100 million people in the U.S. alone that consider themselves Evangelical Christians and another 700 million abroad. They are very hungry for a faith-based and family media content platform and social community hub.

    Q: So tell me why you're so excited about the Truli.net site and what it offers.

    MJS: The slogan of today that everyone seems to be familiar with is "Content is King," but I've coined the phrase "Distribution is Emperor" because a massive business success can be achieved in a short period of time thanks to the newest digital technologies ranging from the cloud to mobile devices and it's very inexpensive, not to mention taking advantage of a truly untapped market.

    The content on our site is extremely diverse and we're quickly becoming known as the Netflix of faith-based movies. Visitors can rent a movie for $4.00, but what's great about the platform is that we don't pay a cent for any of the content on our site unlike Netflix and we get a 50% cut from content providers. We are working towards having our own icon on Smart TV's as you see from Netflix, Facebook and others.

    Visitors can choose from thousands of weekly sermons to listen to and many of them will tithe to these ministries, just as if they were at a Sunday morning worship service. Truli gets a 15% cut from these donations and there's no charge to the ministries that provide the content. One of the most popular and charismatic ministers of our time with over 20 million followers, threw his hat into the Truli ring back in December, as Joel Osteen signed on to our platform.

    In addition to the rapidly expanding movie and sermon content, Truli is also focused on its fast growing segments of children's programming, men's and women's programming, Christian comedy, books, Christian rock and gospel and now sports. Programming is also rapidly taking shape in the Spanish, Korean and Mandarin languages. Our shopping network known as Truli Shop has over 300,000 items for sale and is powered by The Christianbook Group and as is the case with all of our other content, we pay nothing for the inventory, yet achieve a 10% to 15% cut on all items sold, packaged and delivered.

    As of today, we have approximately 100K unique monthly visitors and hope to achieve 1 million unique monthly visitors by the end of this summer along with doubling our workforce in the next 12 months.

    Q: What metric can shareholders use to value the company in its present stage of evolution ?

    MJS: We currently have 83,651,373 shares outstanding and the actual number of shares that are freely trading in the float and not tightly held is somewhere between 4 to 5 million. Our current monthly cash burn is around $40K thanks to our free content business model and our market cap is $6.6 million at the current price of .08, so obviously I feel the stock is beyond undervalued based upon our rapid growth and the fact that we're no longer in the development stage and are now generating revenues. I also recently enhanced shareholder confidence by converting $1.2 million in debt (my own money) to equity at approximately .065, basically making what I perceive to be a bold statement that back in early February, the company was worth no less than the conversion price.

    Conclusion:

    Personally, I love this rapidly evolving story and I think the conversion from debt to equity puts a floor in the stock price at .065 and even if this weren't the case, the tiny monthly cash burn of just $40K indicates that there's hope for big profits ahead, especially if growth continues on the warp-speed pace that it is. TRLI is a fully reporting company and must file quarterly reports with the SEC, thus it will be easy to follow the financial progress of this business.

    Investing in the stock down here at .08 is more than warranted and the person who you're rooting for to make Truli a success has previously taken a $1 million dollar investment and turned it into $1.2 billion dollars. Can he do it again ? If he does, investors will have more money than they know what to do with.

    Disclosure: I am long OTCPK:TRLI.

    Tags: TRLI
    Apr 01 9:05 AM | Link | 1 Comment
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