The Micro Cap Opportunity
Proven Strategies for the Astute Micro Cap & Nano Cap Stock Speculator
05/27/2008
The MCO Daily - Before the Bell for Wednesday May 27th, 2008
The Micro Cap Opportunity 'Daily'
‘Before the Bell’ for Wednesday, May 28th, 2008
On the Radar: EUGS, BZTG, KWBT, COTE, QTWW, EPCT
This morning's top Micro Cap trading ideas include, EuroGas, Inc. (OTCPK: EUGS), Buzz Technologies, Inc. (OTCPK: BZTG), Kiwa Bio-Tech Products Group Corp. (OTCBB: KWBT), Coates International Ltd. (OTCBB: COTE), Quantum Fuel Systems Tech Wrldwd, Inc. (NASD: QTWW), EpiCept Corp. (NASD: EPCT).
EUROGAS, INC. (OTCPK: EUGS)
Up 25.00% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=EUGS.PK
EuroGas is a publicly traded oil and gas company with assets in Ukraine. The company's common stock trades on the Hamburg Stock Exchange in Germany under the symbol EUG and on the Other OTC (Pink Sheets) in the United States under the symbol EUGS. Recent EUGS News:
May 27, 2008 - EuroGas to Acquire 30% Interest in McCallan Oil & Gas and Option to Purchase Additional 25% Interest
EuroGas, Inc. (PINKSHEETS: EUGS) (HAMB: EUG) today announced that it had entered into an agreement to acquire a 30% interest in McCallan Oil & Gas (U.K.) Ltd. (McCallan), a closely held U.K. oil and gas concern, from Mr. Hans D. Dietmann, McCallan's controlling shareholder and Managing Director, and has secured an option to purchase an additional 25% interest in McCallan from Mr. Dietmann. Combined with the recently announced agreement to purchase a 45% interest in McCallan from Regent Ventures Ltd., EuroGas is on track to own 100% of McCallan when the acquisitions and the option to purchase the remaining 25% interest are finalized.
McCallan's main assets are its wholly-owned subsidiaries EuroGas Polska sp.zo.o ("EuroGas Polska"), a Polish company, and Vienna, Austria based EuroGas GmbH ("EuroGas Austria").
EuroGas Polska
EuroGas Polska owns a 24% interest in a large Joint Operating Agreement (JOA) operated by Poland's national oil & gas concern Polish Oil & Gas ("PGNiG"), which itself owns 51% in the JOA. The balance of 25% is held by Aurelian Oil & Gas Plc, a U.K. public company listed on the London Stock Exchange. The JOA comprises approximately 3,200 square kilometers with 10 oil and gas concessions in the Polish Carpathian Mountains. The PGNiG and the Polish Ministry of Environment and Natural Resources have publicly stated in the Annual Reports on Poland's hydrocarbon reserves the existence of a potential 300.000.000 BOE (Barrels of Energy) reserve in the southern portion of the concession area.
RWE-DEA, a subsidiary of Germany's utility giant RWE, confirmed in its Annual Report 2007 an oil discovery on a small concession at the northwestern flank of the JOA's Carpathian concession area while PGNiG has recently made a large 2.4 TCF natural gas discovery at the northeastern flank of the concession area of the JOA next to the Ukrainian border where several smaller producing fields exist at shallow depth. Recently, PGNiG gave notice to the JOA interest holders to commence a large scale seismic program in the central and northeastern portion of the concession area of the JOA and has suggested to drill two deep wells in that portion of the concession area.
EuroGas Austria
EuroGas Austria also owns a 33% shareholding in Rozmin s.r.o. (Rozmin), a Slovakian mining company which is placing its huge Germerska Poloma talc (soapstone) deposit into production. Ownership of the Gemerska Poloma deposit was recently restored to its rightful owners in a decision by the Supreme Court of the Slovak Republic after a protracted litigation. The decision cannot be appealed.
Gemerska Poloma is one of the largest and purest talc ore bodies of the world with 150,000,000 estimated tons of carbonate reserve. Belmont Resources Ltd., a Canadian mining company, currently owns 57% of Rozmin, but this interest may be purchased by EuroGas in exchange for a CDN $1,000,000 payment to Belmont pursuant to a longstanding agreement. The remaining 10% interest in Rozmin is owned by a Berlin based German trading company.
Acquisition Terms
EuroGas will purchase Mr. Dietmann's 30% interest by issuing 20.000.000 restricted EuroGas, Inc. common shares, as well as 1.000.000 non-voting and non interest bearing Series 2008 Preferred Shares with certain Net Profit Interest ("NPI") rights attached to it. As part of the transaction, Mr. Dietmann agreed to a lock-up agreement which prohibits him from selling or transferring these shares for a period of three years without EuroGas' consent.
In addition, EuroGas has the right to force conversion of the Preferred Shares with the NPI, together with Mr. Dietmann's remaining 25% shareholding interest in McCallan, once the share price of the company has traded at $2.50 per share for a period of 20 consecutive days. If EuroGas common stock closes at or above $2.50 per share for 20 consecutive trading days prior to year end 2008, EuroGas can force Mr. Dietmann to exchange his remaining 25% interest in McCallan and the Preferred Shares with the NPI for a total of 25,000,000 restricted common EuroGas shares.
If EuroGas common stock closes at $2.50 per share for 20 consecutive trading days in 2009 or until May 31, 2011 EuroGas will issue 15.000.000 restricted common shares to Mr. Dietmann for his remaining stake in McCallan. In the event that EuroGas common stock doesn't close at $2.50 for twenty consecutive trading days from now until May 31, 2011, Mr. Dietmann will be allowed to retain his 25% stake in McCallan along with the Preferred Stock and associated NPI.
Any stock issued to Mr. Dietmann for his remaining 25% interest in McCallan and the Preferred Shares will be subject to a three year lock-up agreement which prohibits the sale or transfer of these shares without EuroGas' consent. Any stock issued pursuant to Mr. Dietmann will be held by an escrow agent suitable to EuroGas and Mr. Dietmann.
BUZZ TECHNOLOGIES (OTCPK: BZTG)
Up 15.79% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=BZTG.PK
Buzz Technologies, Inc. is a convergent media company with operations ranging from infrastructure development to online retail.
Recent BZTG News:
May 27, 2008 - China Internet Café Union to Buzz
The Green Power Internet Café Union has agreed with Buzz Technologies, Inc. (PINKSHEETS: BZTG) to 'hardwire' all of their PC homepages to the Chinese Language Version of www.12buzz.com. They will also begin testing the BuzzTel VoIP platform.
Green Power Internet Café Union consists of over 10,000 PCs in 50 plus Internet Café locations, bringing the total number of PCs dedicated to Buzz in China to 40,000. Internet cafe PCs' market size in China is between 6 million and 10 million units, and these PCs are upgraded every 18 months. Buzz is aiming to capture the majority of these PCs through working with the various Internet Café Unions and rolling out VoIP, ISP and regional IT services across the country in an effort to catch the 2 market leaders in China, Google and Baidu.
"By 2012 there will be 373 million Internet users in China, 150 million more than in the US at the same time," says Ben Macklin, eMarketer senior analyst and author of the new report, "Online Advertising in China: The Olympic Year." "Despite this fact, the Chinese Internet market is still relatively immature and only in its first phase of growth.
"This makes China a large -- and growing -- opportunity for online advertising."
eMarketer forecasts that online advertising spending in China will grow from RMB7 billion ($924 million) in 2007 to RMB29.26 billion ($4.9 billion) in 2012. In projecting yearly growth rates, eMarketer assumed a strong uptick in 2008 due to the Beijing Olympics and annual growth above 30% to 2012.
"The 2008 Beijing Olympics will be a significant driver of advertising spending growth," says Mr. Macklin, "but positive underlying economic and demographic indicators point to continued advertising spending growth well beyond this year."
KIWA BIO-TECH PRODUCTS GROUP CORP. (OTCBB: KWBT)
Up 21.54% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=KWBT.OB
The Company develops, manufactures, distributes and markets innovative, cost-effective, and environmentally safe bio-technological products for agricultural and natural resources and environmental conservation. The Company's products are designed to enhance the quality of human life by increasing the value, quality and productivity of crops and decreasing the negative environmental impact of chemicals and other wastes. For more information about the Company, please review documents filed with the SEC (www.sec.gov) or visit the Company's website at http://www.kiwabiotech.com .
Recent KWBT News:
May 27, 2008 - Kiwa Bio-Tech Joint Venture to Produce Preventative for Avian Flu
Kiwa Bio-Tech Products Group Corporation (OTC Bulletin Board: KWBT) announced entry into a contract for a joint venture named Hebei Kiwa Huaxing Bio-Pharmaceuticals Co., Ltd. The joint venture company aims at developing and producing Kiwa's AF-01 anti-viral preventative for avian flu. Kiwa Bio-Tech and Hebei Huaxing Pharmaceuticals Co., Ltd. (''Huaxing'') held a ceremony recognizing their cooperation on May 22, 2008.
Under the terms of the contract, Kiwa Bio-Tech owns 70% of the equity of the joint venture and Huaxing owns 30%. For more details about the contract, please refer to 8-K filed with the SEC.
Mr. Ruijun Li, General Manager of Huaxing, noted, ''The combination of our companies' marketing network, technology, manufacturing expertise is expected to support the growth of the joint venture.''
Mr. Wei Li, Chairman and CEO of Kiwa, stated, ''we are pleased that Kiwa will now be able to aggressively pursue commercial development of AF-01 and veterinary pharmaceuticals as the third segment of its business. Now along with continued growth of bio-feed and rapid expansion of bio-fertilizers, Kiwa will be able to manufacture and market AF-01 Anti-viral Aerosol.''
ABOUT AF-01 ANTI-VIRAL AEROSOL
In May 2006 Kiwa acquired AF-01 Anti-viral Aerosol technology for veterinary medicine applications including the exclusive production right and other related rights to produce an anti-viral aerosol drug for use with animals from Jinan Kelongboao Bio-Tech Co., Ltd. ("JKB"), which is affiliated with Chinese Academy of Medical Sciences. The AF-01 aerosol technology is a broad-spectrum anti-viral agent with potent inhibitory and/or viricidal effects on a variety of RNA viruses found in animals and fowls such as bird flu. Kiwa's hope is to develop a commercialized product in the form of a spray for applying in fowl houses and other animal holding facilities to prevent and cure virus-caused diseases, for example, avian flu and foot-and-mouth disease.
ABOUT HUAXING
Huaxing was founded in 1996. Huaxing is supported by animal husbandry and veterinary medicine agencies at both provincial and municipal levels. Huaxing has focused on building strong co-operative relationships with academic institutions such as the Agricultural University of Heibei and Hebei University of Science & Technology. Huaxing has developed: 12-series of animal medicines and disinfectants, over 200 products for flocks and herds, pigs, furry animals and pets. Huaxing holds 61 approval document numbers for veterinary drug products. Huaxing was inspected by the Ministry of Agriculture of the People's Republic of China (''Ministry of Agriculture'') and was awarded the GMP qualification in January 2005. Huaxing's distribution channel covers all of China with exception of Taiwan and Tibet. Huaxing has become a modern high-tech veterinary drug enterprise recognized as a strong force in R&D, manufacturing and also distribution.
COATES INTERNATIONAL LTD. (OTCBB: COTE)
Up 13.04% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=COTE.OB
Coates has recently completed development of its patented spherical rotary valve CSRV Industrial Internal Combustion Engine developed over a period of more than 6 years and other CSRV applications over 10 years. The underlying CSRV technology was invented by George J. Coates and his son Gregory. The CSRV system is adaptable to combustion engines of many types. This technology is currently adapted to a number of practical applications including industrial generators powered by engines incorporating the CSRV technology and designed to run on flare-off gas from oil wells, landfill gas and raw natural gas. The company is actively engaged in planning for production and rollout of these engines.
Recent COTE News:
May 27, 2008 - Coates International, Ltd. Announces Plans for Large Scale Retrofitting of Heavy Truck Engines
Coates International, Ltd. (Coates) (OTCBB: COTE). Coates is now in the planning stages for a "go-to-market strategy" that would provide the trucking industry accessibility to facilities throughout North America designed to retrofit existing truck engines with the Coates Spherical Rotary Valve Engine ("CSRV") technology. The CSRV technology improves fuel consumption, reduces harmful emissions, and reduces equipment "downtime" by extending the intervals between engine maintenance.
The combination of the increasing cost of diesel fuel, which is rapidly approaching $5.00 per gallon, along with the prospect of new trucking industry regulations designed to reduce harmful emissions, is posing an unprecedented, serious threat to the entire trucking industry. These new emissions regulations cut fuel efficiency for heavy trucks to as low as five miles per gallon. These factors, which are putting a number of heavy trucking industry companies into a fight for survival, have prompted a recent spate of calls to our Company by heavy truck fleet owners, operators, and others that service the trucking industry, who are frantically in search of a realistic solution.
We are currently in discussions with a major diesel and biodiesel supplier interested in retrofitting as many as 19,000 trucks owned by various distributors for Coca-Cola within Mexico. We are also in discussions for retrofitting heavy truck engines with Mapletree Transportation Inc., a Berkshire Hathaway company.
There is excellent synergy between the specific requirements for heavy trucking industry internal combustion engines and the technology we have already developed for the Coates CSRV 855 c.i. Industrial Engine which powers the Coates Electric Power Generators to be distributed under the US and Canadian licensing agreements with Well to Wire Energy, Inc. ("WWE"). We believe that demand for retrofit services will be substantial and that the quickest and most efficient strategy for meeting market demands will be to license this technology to others with both experience and existing facilities. Barry Kaye, CFO, noted that a key element of this strategy will be to maintain a supply of retrofitted truck engines at each established Coates Retrofit Facility with our CSRV technology. This will enable the Coates CSRV engines to be rapidly swapped out with the existing engines in the trucks to be retrofitted. The swapped out old technology heavy truck engines would then be retrofitted offline with the Coates CSRV technology, thereby substantially accelerating the process and increasing productivity.
As an initial step towards implementing this strategy, Coates has already authorized WWE to retrofit up to ten 18-wheeler, tractor-trailer heavy trucks for Elk Point Sand and Gravel Co, Aarbo Ranching Ltd. located in Alberta, Canada with the Coates CSRV 855 c.i. Industrial Engine. Our management intends to devote substantial energy to putting additional license arrangements in place throughout the country for this purpose.
George Coates stated that our existing internal combustion engine technology provides us with an important competitive advantage in penetrating this substantial market opportunity.
QUANTUM FUEL SYSTEMS TECH WRLDWD, INC. (NASD: QTWW) Up 16.26% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=QTWW
Quantum Fuel Systems Technologies Worldwide, Inc., a fully integrated alternative energy company, is a leader in the development and production of advanced propulsion systems, energy storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes advanced lithium-ion battery systems, electronic controls, hybrid electric drive systems, hydrogen storage and metering systems and alternative fuel technologies that enable fuel efficient, low emission hybrid, plug-in hybrid electric, fuel cell, and alternative fuel vehicles. Quantum's powertrain engineering, system integration, vehicle manufacturing, and assembly capabilities provide fast-to- market solutions to support the production of hybrid and plug-in hybrid, hydrogen-powered hybrid, fuel cell, alternative fuel, and specialty vehicles, as well as modular, transportable hydrogen refueling stations. Quantum's customer base includes automotive OEMs, fleets, aerospace industry, military and other government entities, and other strategic alliance partners.
Quantum has co-founded a "green American car company" called Fisker Automotive, Inc. Fisker Automotive will offer a range of environmentally friendly premium cars, incorporating Quantum's proprietary high-performance plug-in-hybrid electric vehicle architecture, known as "Q-Drive," into a unique chassis that will enable optimizing the performance and vehicle dynamics. "Fisker Karma" launched at the Detroit International Auto Show in January, 2008, incorporates an advanced solar
Recent QTWW News:
May 27, 2008 - Quantum and Asola Awarded $17 Million Solar Module Supply Contract by a Leading German Solar System Supplier
Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) today announced that its German solar partner, Asola Advanced and Automotive Solar Systems GmbH, has won a $17 million contract from Sunworx GmbH, for the supply of high-efficiency silicon photovoltaic solar modules. Sunworx, which is one of the leading solar system suppliers in Germany, will take delivery of these modules in 2008.
"Sunworx is notable for their innovative solutions, consistent growth and long-term business success. Asola is pleased to partner with this dynamic company, as they share our passion for the highest quality and reliability," said Asola's founder and CEO, Reinhard Wecker.
Quantum and Asola have recently announced tripling of solar module production capacity in Germany, by fall 2008. Quantum holds a 25% stake in Asola, and is in discussions towards an expanded partnership. Asola and Quantum have entered into a long-term supply agreement with Ersol Solar Energy AG for the procurement of 155 MW of high-efficiency silicon photovoltaic solar cells, starting in 2008. The Ersol agreement and additional supply contracts with other leading suppliers such as MOTECH and Sunergy guarantee a steady supply of solar cells to Quantum and Asola, thereby avoiding any potential future disruptions due to silicon shortages, as have been recently experienced by the solar cell industry. Resulting sales from these supply agreements are anticipated to generate in excess of US $600 million for Asola and Quantum.
"Demand for peak power is growing at twice the rate as the overall electricity market," commented Alan P. Niedzwiecki, President and CEO of Quantum. "Solar systems are ideally suited to meet local peak power demands, and are increasingly favored by major utility companies to meet their renewable energy portfolio requirements. We believe that Quantum and Asola are well-positioned to meet this demand in Europe as well as to capitalize on the opportunities in California and the rest of North America."
EPICEPT CORP. (NASD: EPCT)
Up 17.65% Yesterday
Detailed Quote: http://finance.yahoo.com/q?s=EPCT
EpiCept is focused on unmet needs in the treatment of cancer and pain. The Company's broad portfolio of pharmaceutical product candidates includes several pain therapies in clinical development and a lead oncology compound for AML with demonstrated efficacy in a Phase III trial; a marketing authorization application for this compound recently received a negative opinion and is being re-examined in Europe. In addition, EpiCept's ASAP technology, a proprietary live cell high-throughput caspase-3 screening technology, can efficiently identify new cancer drug candidates and molecular targets that selectively induce apoptosis in cancer cells. Two oncology drug candidates currently in clinical development that were discovered using this technology have also been shown to act as vascular disruption agents in a variety of solid tumors.
Recent EPCT News:
May 27, 2008 - EpiCept Files Re-Examination Documentation for Marketing Authorization of Ceplene(TM) in Europe
EpiCept Corporation (Nasdaq and OMX Nordic Exchange: EPCT) today announced that it has submitted the documentation to support a re-examination of its Marketing Authorization Application (MAA) in Europe for Ceplene(TM) to the Committee for Medicinal Products for Human Use (CHMP). Ceplene (histamine dihydrochloride) is intended for the remission maintenance and prevention of relapse in patients with Acute Myeloid Leukemia (AML) in first remission. The Company anticipates that appeal proceedings in response to this filing will take place in the third quarter of this year.
During the last few months, EpiCept has received new written support from key opinion leaders in hematology representing numerous European countries, who have unanimously recommended the approval of Ceplene in order to have immediate access to this therapy for their patients. "We have met with many of Europe's leading hematologists and have received overwhelming support for the approval of Ceplene in Europe to address this critical unmet medical need for AML patients," said Stephane Allard, M.D., Chief Medical Officer of EpiCept.
The comprehensive dossier detailing the grounds for re-examination addresses the three remaining issues that formed the basis of the negative opinion issued by the CHMP on March 19, 2008. EpiCept believes that this dossier supplies ample and compelling evidence for the approval of the MAA for Ceplene, and through this submission affirms to regulators that the MAA submitted:
-- Provides a clear and strong pharmacological rationale for the
use of Ceplene in conjunction with low dose interleukin-2 in this indication. Updated clinical pharmacological data have been added, which supplement the original MAA and are supported by rigorous and well-documented preclinical in vitro and in vivo studies, published in leading scientific journals.-- Includes updated data from our prior clinical trials that
support Ceplene's pharmacologic rationale and mechanism of action. The data from the Phase III study have already clearly demonstrated the significant efficacy and the excellent safety of Ceplene in this indication;-- Presents statistically significant results through the
inclusion of positive data from Ceplene's Phase II study and pivotal Phase III study. These data have undergone another independent statistical analysis performed by leading European biostatisticians who have validated the original analyses and have confirmed that the data are robust and that the results cannot be explained by chance. The Company also submitted in the dossier a signed consensus statement from leading European AML experts from each of the major European countries acknowledging the critical medical need for a safe and effective remission maintenance therapy for AML patients and that Ceplene when approved would be used in hematology clinical practice for this disease. In addition, we submitted a signed consensus statement from leading European biostatisticians attesting to the consistency and robustness of the Phase III Ceplene data package.
"The approval of Ceplene, in conjunction with IL-2, would provide AML patients in Europe with the first pharmaceutical therapy to produce a clear benefit in prolonging leukemia free survival and preventing relapse. Furthermore it is expected that an approval would prevent relapse of this disease in nearly 1500 patients per year in Europe, patients who have no other therapeutic alternative," remarked Jack Talley, President and CEO of EpiCept. "We believe we have completely addressed the concerns of the CHMP and are hopeful that the CHMP appreciates the benefit-to-risk balance of Ceplene and grants a marketing authorization for this important product."
About Acute Myeloid Leukemia (AML)
AML is the most common type of leukemia in adults. There are approximately 40,000 AML patients in the EU, with 16,000 new cases occurring each year. Once diagnosed with AML, patients are typically treated with induction chemotherapy and consolidation therapy, with the majority achieving complete remission. However, about 75-80% of patients who achieve first remission will relapse, with the median time in remission before relapse being only 12 months with current treatments. Less than 5% of relapsed patients survive long term.
About Ceplene
Ceplene is EpiCept's registration-stage compound for the treatment of AML. Ceplene is designed to protect lymphocytes responsible for immune-mediated destruction of residual leukemic cells. Laboratory research has demonstrated that Ceplene reduces formation of oxygen radicals from phagocytes, inhibiting NADPH oxidase and protecting IL-2-activated NK-cells and T-cells.
