The Micro Cap Opportunity

04/29/2008
The MCO Daily - Before the Bell for Wednesday, April 30th, 2008

On the Radar: BIHC, SIVC, PAYD, TMEN, CNXT, CHTR

This morning's top Micro Cap trading ideas include, BIH Corp. (OTCPK: BIHC), S3 Investment Company, Inc. (OTCPK: SIVC), Paid, Inc. (OTCBB: PAYD), ThermoEnergy Corp. (OTCBB: TMEN), Conexant Systems, Inc. (NASD: CNXT), Charter Communications, Inc. (NASD: CHTR).

BIH CORP. (OTCPK: BIHC)
Up 23.33% Yesterday

Detailed Quote: http://finance.yahoo.com/q?s=BIHC.PK

Baron International is now a 100% wholly owned subsidiary of BIH Corporation, and we will maintain this pace with any other acquisitions going forward," said Cris Galo, President & CEO of BIH Corporation.

Recent BIHC News:

BIH Corporation (PINKSHEETS: BIHC) today announced that Baron International (a subsidiary of BIH) has been awarded a major contract for work at Citi Field, now under construction and the future home of the New York Mets.
The contract entails the complete installation of beverage systems for all fifty (50) concession locations throughout the new stadium and will be completed on schedule and in time for the projected opening of the new baseball season in April 2009.
Baron has extensive experience in large complicated contracts such as this, with a history of other comparable jobs such as Madison Square Garden, Keyspan Park (Brooklyn Cyclones, a NY Mets Farm Team), Waterfront Park (Trenton Thunder, a NY Yankees Double A Farm Team) and the IZOD Center (formerly Continental Arena), East Rutherford, N.J., home to the NJ Nets and NJ Devils amongst many others.
"We are extremely pleased that Baron has been awarded this contract as revenues from this job are very substantial; final revenue figures will be announced upon the completion as potential cost overruns and other unforeseen charges may be involved. The awarding of this contract solidifies Baron's reputation and 27 years of experience within the industry to complete major contracts on time and within budget," said Robert Ingala, President of Baron International.

S3 INVESTMENT COMPANY, INC. (OTCPK: SIVC)
Up 35.71% Yesterday

Detailed Quote: http://finance.yahoo.com/q?s=SIVC.PK

S3 Investment Company, Inc. (http://www.s3investments.com) is a holding company with two subsidiaries doing business in the China market. S3 holds a 100% equity interest in Redwood Capital (http://www.redwoodcapinc.com), which assists private Chinese companies in accessing U.S. capital markets by utilizing a network of investment banking relationships to achieve reverse merger transactions, and a 51% equity interest in SINO UJE (http://www.sinouje.com), a non-stocking distributor of medical and industrial high-tech products to markets throughout China.

Recent SIVC News:

April 29, 2008 - S3 Investment Company Announces CEO Trip to China for Meetings With Existing Redwood Capital Clients and to Bolster Pipeline of Prospective Redwood Clients

S3 Investment Company, Inc. (PINKSHEETS: SIVC), the majority owner of Redwood Capital, which assists private Chinese companies in accessing the U.S. capital markets through reverse mergers into U.S. public companies, today announced that chairman and chief executive officer Jim Bickel is preparing to travel to China for meetings with existing Redwood Capital clients and to support the expansion of Redwood's pipeline of prospective clients.
Redwood Capital has three current Chinese private company clients, Changzhou Haijie Metallurgical Machinery Manufacturing Co. Ltd., Wuhan International Trade College, and Shandong Yiteng Chemical Co., Ltd. Given the company's goal to complete one reverse merger transaction per quarter, Redwood Capital will continue to target and evaluate additional potential clients. The company's extensive network of contacts and the bourgeoning business landscape in China provides abundant deal flow for Redwood Capital.
"In order to meet our goal of one closed reverse merger transaction per quarter and given the nature of the Redwood Capital business, the development of a robust pipeline of prospective clients is a critical element in the successful execution of Redwood's strategy," Mr. Bickel stated. "The reality is that not every client in the Redwood Capital pipeline is going to ultimately complete a reverse merger transaction. The pipeline is much larger than just the announced clients, and some companies in the pipeline will not meet the necessary standards for a U.S. public listing."
"The work of sorting through all potential client companies requires significant support from S3, and we will continue to provide that support, even when it entails frequent trips to China," Mr. Bickel added.
S3 recently announced that the Redwood Capital business has become an even greater focus due to the priority that management has placed on building value for shareholders.
Redwood Capital participated in a transaction involving Dalian Chuming, a pork processing company that trades in the U.S. as Energroup Holdings Corporation under the symbol ENHD. As part of the transaction, Energroup Holdings Corporation, a Nevada corporation, acquired all of the issued and outstanding capital stock of Precious Sheen Investments Limited ("PSI"), a British Virgin Islands corporation and parent company of PRC-based Dalian Chuming.
Redwood Capital was issued 428,095 shares of Energroup Holdings Corporation as the equity portion of its payment for provided advisory services for the transaction. Institutional and accredited investors participated in a $17.0 million private placement with Energroup Holdings Corporation, paying $4.40 per share. At the placement price, the value of Redwood Capital's equity position would exceed $1.8 million. At the most recent trading price of Energroup Holdings Corporation's common stock, the value of the equity position would exceed $2.1 million.
Energroup Holdings Corporation has since reported that revenues for the year ended December 31, 2007 totaled $124.7 million, a 77% increase over the $70.4 million reported in 2006. Gross profit for 2007 was $20.3 million, representing a 61% increase from the $12.6 million reported in 2006. Overall, gross margins were 16.3% in 2007, compared to 17.9% in 2006.
Total operating expenses for 2007 were $6.2 million versus $2.9 million for 2006. Operating income increased 70% to $14.1 million in 2007 versus $9.7 million for 2006, while operating margins were 11.3% compared to 13.8%. After tax net income for 2007 increased 44% year-over-year to $11.7 million from $8.1 million and earnings per diluted share were $0.67 in 2007 as compared with $0.47 per share in the prior year, based upon 17.3 million shares outstanding.

PAID, INC. (OTCBB: PAYD)
Up 32.43% Yesterday

Detailed Quote: http://finance.yahoo.com/q?s=PAYD.OB

Paid, Inc. operates a diversified set of businesses, including its celebrity services and AuctionInc ecommerce technology businesses. Paid, Inc.'s celebrity services provides celebrities and organizations with official Web sites and fan club services that include e-commerce storefronts, ticketing and fan experience packages and web site content to attract tens of thousands of visitors daily. Using proprietary patented technology, Paid's innovative AuctionInc brand shipping calculation and auction management software and services are utilized to streamline online auctions, ecommerce and web site development and hosting. The Company also sponsors autograph signing events and other sports marketing services for sports clientele. The Company's common stock is traded on the OTC Bulletin Board under the symbol PAYD. For further information, visit http://www.paid.com.

Recent PAYD News:

April 29, 2008 - Paid, Inc. Executes $2.5 Million Revolving Debt Financing for Growth

Paid, Inc., (OTCBB:PAYD) today announced it has closed on a $2.5 million credit agreement with New York-based Lewis Asset Management. The $2.5 million revolving line of credit is not convertible into Paid, Inc. equity and there are no prepayment penalties. The $2.5 million revolving line of credit is secured by one half of 1% of Paid's patent portfolio. Paid Inc.'s celebrity services business will use the credit facility to make advance payments to musical artists and celebrities in order to secure contracts for VIP ticketing, retail licensing, tour and general merchandising, and other services by Paid, Inc.
"We believe that the major changes taking place in the music industry are providing a great opportunity for Paid to execute its business model. Paid provides a complete solution to celebrities in the music, television, sports and other entertainment areas," said Austin Lewis, portfolio manager for Lewis Asset Management. "We see tremendous potential for Paid's business model as it leverages the New Media space to provide integrated branding and management of celebrities' online presence, including merchandising, VIP ticketing and licensing."
"We're extremely pleased to secure this credit facility from Lewis Asset Management," said Greg Rotman, CEO of Paid, Inc. "We believe this financing serves as a validation of our celebrity services business model and the massive potential of this segment of the entertainment industry."
"This financing will help us build our celebrity services business without being dilutive to our existing shareholder base," Rotman noted. "This capital will help us in securing contracts with major celebrities who require advance payments. This facility provides us with the financial flexibility to pursue opportunities and achieve revenue growth. Several celebrity contracts valued at $20-30 million were pending the closing of this financing and we expect to complete them within weeks."

THERMOENERGY CORP. (OTCBB: TMEN)
Up 30.00% Yesterday

Detailed Quote: http://finance.yahoo.com/q?s=TMEN.OB

ThermoEnergy Corporation is a diversified technologies company engaged in the worldwide commercialization of patented and/or proprietary municipal and industrial wastewater treatment and power generation technologies. The wastewater treatment technologies are consolidated in our subsidiary, CASTion Corporation ("CASTion"), a fast growing developer and manufacturer of innovative wastewater treatment and recovery systems to industrial and municipal clients. The systems are unique because they meet environmental regulations while providing a rapid return on investment by recovering and reusing expensive feedstocks, reducing contaminated wastewater discharge and reusing wastewater in process operations. CASTion's wastewater treatment systems have application in aerospace, food processing, metal finishing, refineries, manufacturing and municipal wastewater. We assemble and ship our waste water treatment products from our 20,000 square foot manufacturing facility in Worcester, Massachusetts. The power generation technologies are consolidated in our subsidiary, ThermoEnergy Power Systems, LLC ("TEPS"). The economic and environmental matrix of the Company's technologies represents a paradigm shift in these key infrastructure industries. The Company currently has offices in Little Rock, AR, Worcester, MA, Hudson, MA, and New York, NY, Jacksonville, FL and Baton Rouge, LA. Additional information on the Company and its technologies can be found on its website at ( www.thermoenergy.com ), or ( www.castion.com ) for wastewater treatment specific information.

Recent TMEN News:   

April 29, 2008 - ThermoEnergy & Babcock Power Join Forces to Develop Advanced Carbon Capture Power Plant

ThermoEnergy Corporation ("ThermoEnergy", OTC Bulletin Board: TMEN) and Babcock Power Inc. of Danvers, Massachusetts, announce the signing of a Memorandum of Understanding leading to the formation of a joint effort to commercialize the Company's zero air emission power plant design called ThermoEnergy Integrated Power System ("TIPS"). Based on pressurized oxy-fuel combustion technology, TIPS converts coal, natural gas, oil, and biomass into energy with near-zero air emissions. In addition, it captures carbon dioxide ("CO2") in a clean pressurized form ready for sequestration or beneficial reuse such as secondary and tertiary oil recovery.
"As an industry and market leader in environmental air pollution controls, combustion technology, steam generation and thermal processes for the power generation industry, Babcock Power is ideally positioned to commercialize this revolutionary process," stated James F. Wood, President and CEO of Babcock Power Inc. "Our long history and extensive expertise in designing and furnishing steam generators, combustion systems, and a wide variety of heat exchangers, including the application of in-house heat transfer and Computational Fluid Dynamics (CFD) modeling capabilities, and ThermoEnergy's commitment to the advancement of new technology, positions us together to play a significant role in the reduction of global greenhouse gases."
"The commitment from a company of the size and capabilities as Babcock Power marks a pivotal point in the development and commercialization of this important and timely new technology," said Dennis Cossey, Chairman and CEO of ThermoEnergy. "Achieving zero air emissions from fossil fuel power plants has long represented the ultimate goal within the energy industry and with Babcock Power joining the effort I am confident we are on the verge of realizing this goal," said Cossey.
"The simplicity and efficiency of the TIPS approach offers a reliable and cost effective design for carbon-capture, near-zero emission power plants," said Alex Fassbender, President of ThermoEnergy Power Systems, LLC. "With relatively few unit operations, TIPS enhances power plant reliability, while its process efficiency comes from recovering the latent heat of vaporization of produced and entrained water. Adding a second reheat to the steam cycle efficiency, coupled with a simple, low-energy process to recover pipeline quality CO2 gives TIPS a competitive edge over other conversion technologies," said Fassbender.
Babcock and ThermoEnergy engineers will begin work immediately to finalize the data needed to design, construct and operate a large-scale pilot plant at a host site.

CONEXANT SYSTEMS, INC. (NASD: CNXT)                                                          Up 10.87% Yesterday

Detailed Quote: http://finance.yahoo.com/q?s=CNXT

Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of $809 million in fiscal year 2007. The company is headquartered in Newport Beach, Calif. To learn more, please visit www.conexant.com

Recent CNXT News:

April 29, 2008 - Conexant to Sell Broadband Media Processing Product Lines to NXP Semiconductors

Conexant Systems, Inc. (NASDAQ:CNXT) today announced that it has signed a definitive agreement to sell its Broadband Media Processing product lines to NXP Semiconductors in a transaction valued at up to $145 million. Conexant's Broadband Media Processing business provides solutions for satellite, cable, terrestrial, and IPTV set-top box applications. Under the terms of the agreement, Conexant will receive $110 million in cash, and up to $35 million in an "earn-out" fee, contingent upon the achievement of certain milestones over the next two years. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close within the next 60 days.
"Over the years, the Conexant team has successfully developed complex solutions for a variety of set-top box applications," said Scott Mercer, Conexant's chief executive officer. "NXP has a long history in consumer electronics, and they possess the scale, skill-sets, and resources required to maintain and expand the positions we established. I am convinced that the combined team will attain an even higher level of success as they continue to deliver innovative, cost-effective set-top box solutions to customers worldwide.
"Divesting our Broadband Media Processing product lines also represents a major step in our continuing effort to restructure our company's business model and cost structure," Mercer said. "As we get closer to completing the transaction, we plan to provide additional information on the financial performance we expect from our continuing company."
Approximately 700 Conexant employees at locations in the United States, Europe, Israel, Asia-Pacific, and Japan will transfer to NXP and join the company's Home Business Unit when the transaction closes. At that time, Conexant's ongoing businesses will consist of Imaging and PC Media, and Broadband Access. The total available market addressed by these product lines is greater than $3 billion today and expected to grow over the next three years.
About Conexant's Imaging and PC Media Product Lines
Conexant's Imaging and PC Media team is focused on delivering solutions for PC, audio, video, and digital imaging applications, as well as analog modems that enable cost-effective Internet access connectivity. The business is characterized by a comprehensive technology portfolio, extensive software expertise, an in-depth understanding of analog and mixed-signal design, and longstanding customer relationships with PC, printer, and facsimile manufacturers worldwide. The company is leveraging these strengths and its industry-leading market positions to capitalize on growth opportunities in PC audio and video applications, and expand into new and adjacent high-volume consumer markets.
High-quality audio and video are becoming increasingly important features in a variety of consumer products, driven by the growing availability of downloadable music and video, and the proliferation of voice-over-IP (VoIP) telephony. In the audio segment, the company is applying its expertise in voice-processing technology and its comprehensive IP portfolio to deliver technical innovations that dramatically improve audio quality in PCs and related peripherals that include iPod/MP3 docking systems, speakers, multimedia LCD displays, and speakerphones.
Conexant is using its extensive video knowledge to provide advanced solutions for standard- and high-definition video applications that include PCTV. In addition, the company is addressing new market opportunities such as mobility TV, and the rapidly growing video surveillance and security segment.
In the fax and printer digital imaging sector, Conexant is strengthening its leading market positions by delivering new "turnkey" solutions that reduce costs and increase functionality and performance. The company has also expanded its total addressable market by delivering new system-on-chip (SoC) solutions to meet the growing demand for multifunction printers (MFPs) with print, copy, and scan functionality.
About Conexant's Broadband Access Product Lines
Conexant's Broadband Access group is a leading provider of digital subscriber line (DSL) client-side and central office SoC solutions. The company has a proven track record of delivering technical innovations based on the industry's most advanced technology standards, and is leveraging its expertise and established customer base to further solidify its market-leading positions in the broadband access marketplace.
DSL is currently the most prevalent high-speed Internet access technology, and subscriber rates continue to grow, fueled by consumer demand for high-speed "triple-play" voice, video and data services. To meet this need, Conexant has applied its extensive knowledge of broadband-access technologies to deliver a family of end-to-end solutions based on VDSL2, the industry's most advanced technology. These solutions are now being evaluated and deployed by service providers rolling out advanced networks worldwide.
Conexant has also established a leadership position in ADSL2plus gateways with integrated wireless networking and VoIP functionality, which is the industry's fastest-growing market segment. The company was the first to offer a family of integrated client-side gateway solutions to address this opportunity. Demand for these products has increased significantly from equipment vendors in North America, Europe, and Asia.
The company is also investing in next-generation passive optical networking (PON) technology. Operators worldwide are planning to use PON to improve their ability to deliver bandwidth-intensive services such as video-on-demand, and provide a high-speed "last mile" broadband connection to homes and businesses.

CHARTER COMMUNICATIONS, INC. (NASD: CHTR)
Up 5.15% Yesterday

Detailed Quote: http://finance.yahoo.com/q?s=CHTR

Charter Communications, Inc. is a leading broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. More information about Charter can be found at www.charter.com.

Recent CHTR News:

April 29, 2008 - Charter Convenes Annual Meeting of Stockholders

Charter Communications, Inc. (NASDAQ:CHTR) ("Charter" or the "Company") convened its Annual Meeting of Stockholders here today.
Paul G. Allen, Chairman of the Board and controlling shareholder of Charter, said, "I am very pleased with Charter's performance in 2007, from both a financial and operational perspective. Charter is clearly on a path of growth." Mr. Allen concluded his comments by saying, "I also want to pay tribute to the more than sixteen and a half-thousand Charter employees who are hard at work in communities in 29 states, adding value for our customers and improving their experiences with our Company."
In his prepared remarks, Neil Smit, President and Chief Executive Officer, said, "2007 was a successful year for Charter. Through the hard work of our employees, we achieved double-digit revenue and adjusted EBITDA growth year over year in each quarter of 2007 on a pro forma basis, and we made significant improvements to the overall customer experience."
In closing, Mr. Smit added, "All of us at Charter are focused on keeping the Company's results moving in a positive direction. We remain optimistic about the future for Charter and the cable industry overall. We expect the Charter Bundle and Charter Business Bundle to be the primary platform for success in 2008, and we are encouraged about the prospects for Charter as we continue to deliver value and improve the experience for our customers."
During the course of today's meeting, Charter shareholders re-elected Mr. Robert May as the Company's Class A/Class B Director, and ratified the appointment of KPMG LLP as the Company's independent public accountants for 2008. Mr. Allen, the sole holder of Charter's Class B common stock, elected the Class B Directors, who are Paul G. Allen, W. Lance Conn, Nathaniel A. Davis, Jonathan L. Dolgen, Rajive Johri, David C. Merritt, Marc B. Nathanson, Jo Allen Patton, Neil Smit, John H. Tory and Larry W. Wangberg.
The webcast replay of Charter's Annual Meeting of Stockholders is available via the Company's website at www.charter.com. The webcast can be accessed by clicking on "About Charter" on the top of the home page.

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