Sorry I haven’t had a chance to get to all your small cap questions lately. Between V2k (VTOK) and Bio-Matrix (BMSN), I haven’t had much time to get to them. That’s all going to change today though. Anybody who’s sent in a question to the Small Cap Network within the last couple of weeks is about to get an answer…or at least a response. I’ll put them all here in the blog so everyone else knows what other readers are thinking.

1) Hi, Can you provide a recent Balance Sheet for Bio-Matrix?

A. Sure, though I don’t think it means much for this particular stock pick. They have next to nothing. They’re staying afloat by issuing a little debt ($50K for the last round) until they can get licensed…which should be (hopefully) in less than a couple of months. Here’s the last balance sheet: http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0001157523-08-001453&Type=HTML

2) Hi Can you recommend a small cap company like mos (Mosaic), pot (Potash) or mon (Monsanto)? Would like to find one to invest in.

A. I can’t, but if you have a brokerage account you may have a screener that could do the job. Yahoo’s stock screener is actually not bad, though I don’t know if you can get that detailed with the industry. MSN’s isn’t bad either. Agriculture has been a good one of late though…maybe worth a look. Here are the screener sites:

http://moneycentral.msn.com/investor/finder/customstocksdl.asp

http://screen.yahoo.com/stocks.html

3) On their (Heritage Capital - HCPC) website they show they close a $672,000,000 BCLOC loan. Their current listing price on the otc.bb is .0004. There has been a lot of talk on Allstocks and IHUB forums that it could explode into the pennies after the funding clears. Any thoughts?

A. I’m nowhere near as enthusiastic as anybody on the boards. Sounds like a pump and dump. I’d steer clear.

4) Delcath (DCTH) Believe this company (Delcath - DCTH) fits the profile of the type of companies your profile. 1. $40mill cap 2. about 18mill cash 3. pIII liver cancer study 4. multiple pII liver cancer studies 5. published data thus far has been outstanding (70%+ response rates) 5. NCI partnership 6. Huge upside on FDA approval (could see in the next 12-18 months)

A. Not bad. We’re including it here so our readers can make the decision for themselves. Thanks.

5) Is ZUPC completely worthless now. Is the company still here?

A. It’s still ‘alive’, though barely. We dumped them long ago. Yeah, basically worthless (in more ways than one).

6) i cant understand why you aren’t recommending shorting - this is a phenomenal bull market for shorting - one of the best in years - and i can’t understand why you aren’t recommending short positions - you just plain short every rally and will succeed a minimum of 3 out of five times - the shorts not working you just cover - no big deal at around 7 bucks a trade

A. Oh, we don’t disagree. We personally don’t mind shorting, but not everybody on our list can, or wants to. For those folks there’s always the option of a short ETF or put options. Point well made though…if you’re not playing the downside, you’re missing opportunities.

7) You wrote up a report on SWEB I believe and was wondering how you feel about that now with these big ups and downs. I have held onto it and actually have owned it for sometime. Also could you give any thoughts on ATML.

A. There’s been more down then up for StockGroup, but here’s what we see now…the stock is a nice value idea. I also think the company has been distracted by the new website, which cost more and took longer than they planned. It’s over now though, so maybe they can get something going. Personally, I love the concept of what they do. They just haven’t made enough money (or progress) to justify the share price….at least not yet. Maybe 2008 will be the breakout year (not out of the realm of possibility). At this point you have more upside than downside, I think. As for ATML, I’m torn.

8) Hello, I’m interested in investing in ADR’s but do not want a mutual fund type of investment. Can you recommend sources for independent investors to purchase them for their portfolio?

A. Not exactly sure what you mean here, but I think this will answer…..an ADR is just a single foreign stock traded on an American exchange. As long as you have a brokerage account, you can buy anything any U.S. exchange trades. Technically it’s not direct ownership of foreign stock, which is either difficult or impossible to do for most retail investors. To facilitate the American ownership of foreign stocks, a company will buy foreign stocks, and issue what are essentially vouchers for that stock to U.S. investors. It’s a basket concept (like an ETF or fund), but there’s only one stock in the basket. As for resources, find all the ADRs right here. http://www.adrs.com/. In terms of other resources, you’ll find most ADRs peppered in along with American stocks, so wherever you find those, you’ll find most ADRs.

9) Ran across this on spng from Beacon (traders notes) Link: http://www.beaconequity.com/index.php?option=com_content&task=view&id=885&Itemid=73 Does this mean it is now a good entry point on spng. Thanks for the input

A. It should mean it, but nothing has helped SPNG yet. So, no.

10) Can you tell us what has happened to or the latest info on Source Petroleum Inc. (SOPO). The stock seems to still be trading but the last news information they released was in 2007. I cannot find a quarterly report and the web site Source-Petroleum.com has been taken down.

A. I can’t find anything either, which is never a good sign. They also stopped reporting to the SEC, which is a particularly bad sign. I say take the non-presence at face value….they’re dead or near death.

11) Hello. Thank you so much for the stock picks over the last several months. You guys do a great job. I was wondering if you could find out the first couple locations of the kiosks that are going to open up selling the window treatments, etc. I like to see things first hand, and this will allow me to get an early read on the worthiness of this extension. Thank you.

A. I can’t, because they don’t want anybody to know (including me) for proprietary reasons. I can show you one though….it’s then image nearby.

That’s it for now, but keep ‘em coming.

Are you a subscriber to the Small Cap Network newsletter? If not, you’re missing out on some great trading ideas and exclusive market commentary. To sign up, just go to the top right corner of any page of our website. You’ll be joining thousands of other subscribers who have already benefited from our news and views.

Small cap company Zupintra Corporation (ZUPC) saw its stock’s chart snap a fairly long downtrend on Friday, with a huge 3 cent (+150%) rebound from Thursday’s close of 2 cents. It was also the second highest volume day we’d seen since June…only this time around it was decisively bullish.

The external catalyst? Not a single one - that’s publicly evident anyway. For some reason or another, this stock just fell into favor again once it hit 2 cents. Maybe that was enough reason in itself…the maximum loss any new owner could suffer at that point was two cents per share. (I know that would sure get me interested.)

Or, my guess is something did indeed fall into place for the company, and it’s just not official yet. I know they were waiting on those often-discussed letters of credit - maybe those are actually now within reach. Or, maybe there’s a new market falling into place. They have access to almost all of the South American market through their Panamanian partner, yet have only developed the Argentina and Uruguay telecom networks so far. Maybe the Ghana thing is up and running. Or, maybe it’s none of those things…the company actually has a lot of revenue paths to follow. My best guess is, however, the company actually took a big step towards realizing some near-term revenue.

In any case, the move shook things up enough to break some of the stock’s technical headaches. Namely, the 20 day moving average line (purple, thick) no longer seems to be resistance. There’s also a straight-line resistance ceiling (blue, thin) closely mirroring the 20 day line, and it’s broken too. ZUPC hasn’t made a higher high yet (above Friday’s high of 5.8 cents). But, I sense a fundamental and technical change could be brewing.

A time to start buying again? That’s a tough call, but experience has taught me how - sometimes - you have to be willing to take a risk. And at about 4 cents, what’s the maximum risk? Yeah, maybe it’s a little speculative given the entire saga here, but somebody else clearly saw or heard something they liked on Friday. And, they responded with investment dollars. Perhaps their lead is worth following. If ZUPC makes a higher high this week, I’ll like the risk/reward ratio even a little better. Just something to think about.

Are you a subscriber to the Small Cap Network newsletter? If not, you’re missing out on some great trading ideas and exclusive market commentary. To sign up, just go to the top right corner of any page of our website. You’ll be joining thousands of other subscribers who have already benefited from our news and views.

Figures. This micro cap stock seemed to have so much potential when we first introduced it as a trading idea a few months ago. Now, however, Zupintra Corporation (OTCBB: ZUPC) seems to be on hold for what looks like could be indefinitely.

This small telecom outfit was planning on generating revenue by September, once they started providing termination services in South America for the major telecom carriers…but they need letters of credit to offer the service (a quirky telecom requirement). Unfortunately, those letters of credit are still nowhere in site. And, according to the company’s most recent press release, there’s not even an estimate about when they’ll be ready.

As far as we’re concerned, this doesn’t change our take on Zupintra. We put the stock on the shelf a while back when it first become clear there was going to be a delay in getting this piece of the puzzle in place…a decision equally supported by a deteriorating stock that has long since fallen under our suggested exit level.

Our last opinion was ’show me’. Meaning what? We’re willing to keep the company on the radar, but after too many delays and broken promises, we’re only going to respond to proof that they can do what they say they can. To do that, they need (aside from the letters of credit) to start generating revenue. If that starts to happen, then we’ll discuss the possibility of ZUPC being a solid small cap stock idea. Until that time though, we’re not going to give them the benefit of the doubt. Needless to say, their recent news isn’t a step in the right direction with us.

Are you a subscriber to the Small Cap Network newsletter? If not, you’re missing out on some great trading ideas and exclusive market commentary. To sign up, just go to the top right corner of any page of our website. You’ll be joining thousands of other subscribers who have already benefited from our news and views. 

If you missed the blog entry about Zupintra Corporation (OTCBB: ZUPC) from a few minutes ago, then this one might not make as much sense. Be sure to look immediately below, or just click here to get the background story. In any case….

Yes, the financing capabilities that allowed Zupintra to start terminating some calls in the Zupintra network were indeed part of the two-edged insurance/credit requirement.

As you might recall, we’ve been lamenting Zupintra’s technical ability to route international long-distance traffic not being backed by the ability to bill for it. Why? The big players don’t pay as you go - they want to be billed later. The company needed accounts receivable insurance (which they already had), but also letters of credit (which they were trying to get). We’ve now learned that at least some of the letters of credit they were seeking from Londesborough have indeed been approved. Initially, the Londesborough line of credit is worth $5 million. But, with the relationship now forged, it will be much easier to scale into bigger lines of credit.

This is basically what we were waiting for. Per my Zupintra ‘rant’ a few days ago, I’m still waiting to see just how they’ll be able to turn this financial capability into revenue….and how much. Overall though, this is encouraging. I’m also very surprised the company didn’t explicitly say the Londesborough deal was completed - that was the missing piece of the pie for a lot of people. All the same….

As promised in our last blog entry on Zupintra Corporation (OTCBB: ZUPC), I’m going to be following the company very closely as their revenue story unfolds. Today, they announced they’ve taken another step in the right direction.

In short, new clients (long-distance providers) are starting to use Zupintra’s network to terminate phone call (i.e. connect to the call’s recipient). No word on how many clients, calls, or dollars are associated with this initial small-scale launch. Zupintra has been fairly secretive when it comes to that kind of proprietary stuff - and rightfully so.

There was something else that really stuck out to me in the press release though….CEO Lex Van Arem said it was the company’s financing capabilities that allowed these new connections to be made. For those who’ve been following the company in detail, you’ll recall getting the proper accounts receivable insurance in addition to letters of credit was necessary for the operation to really get rolling in a big way. I don’t know if they have all they’re going to get, but it looks like they now at least have some degree of their needed capacity. I’ll see if I can find out more.

Until then, here’s the news release.

Like many of you, I’ve been watching Zupintra Corporation (OTCBB: ZUPC) pretty closely of late. The stock’s performance has been abysmal, even though the company was ’supposed to be’ on the verge of some huge numbers.

As I look back on our coverage, I’m really starting to wonder if this is going to be another Web2 Corporation (OTCBB: WBTO). You may recall Web2 had become proficient at launching new websites, diving into opportunistic markets, and implementing an impressive revenue-bearing business model. Unfortunately, they spent all their time talking about how much money they were going to make, and never actually made any of it. (To my knowledge, Web2 is still not drawing any real revenue from the sites they launched late last year.)

We’ve been hearing something similar from Zupintra, which is why I have to wonder when it’s actually going to happen for them, or if the revenue chatter is going to persist. According to the stock, the market doesn’t think it’s going to be soon enough.

The latest insight/debacle is this business with the accounts receivable insurance. You may recall that in order for Zupintra to play ball with the major carriers (and do business on the scale they needed), they went out and got $10 million worth of accounts receivable insurance. With credit terms of 30 days for their customers, this would roughly allow the company to issue up to $120 million worth of invoices each year….or at least that’s what the company implied, right?

As it turns out, accounts receivable insurance isn’t enough to start billing on a mass scale. Now they also need letters of credit, presumably for the same dollar amount of AR insurance they have (though I’m not really sure how much credit is needed).

Now, you might remember they received a term sheet for a $40 million line of credit through Londesborough Finance back in May. However, that deal still isn’t signed, sealed, and delivered - it was just receipt of a term sheet. As far as I can tell, they may have just as well sent out a press release telling us they received a daily newspaper.

So yes, the Londesborough deal should allow the company to turn on the revenue spigot in a big way, barring yet another task that has to be taken care of after that’s done (something I really am worried about). The question is, when will it happen? It just seems like everything keeps getting pushed back. I really hope the line of credit is finalized soon. Guess we’ll see.

I’m reminded of one of the early scenes from Adam Sandler’s movie ‘The Wedding Singer’. His bride-to-be doesn’t show at the wedding and leaves him at the alter. When she comes to his house later that same day to let him know she doesn’t love him, he responds “That information could have been useful to me yesterday.”

I love the concept and the opportunity with this company, but this business with AR insurance and credit lines is something they could have explained to us yesterday….or a few weeks ago. There’s nothing wrong with doing things right - I just think they jumped the gun on spreading the news.

Aside from being frustrating, it leaves an aftertaste of skepticism in my mouth. This one’s been a big disappointment to say the least. The company had a good track record of doing what they said they were going to do, but taking this particular step seems to be dragging on forever. I’m willing to give any company time to do anything they need to do to get ready to do business - just tell me when you’re done, rather than imply it’s near done when it’s really not. They pretty much used up all of my goodwill with them.

So, there’s really only one relevant question……will Zupintra every actually be able to produce that $2.5 million per month they said they would?

In all fairness to the company (and despite my rant), yeah, I really do think they’ll be able to put up those kinds of numbers. And, I think it may happen relatively soon….within several weeks to a few months. The line of credit from Londesborough seems to be the key.

At this juncture though, my point of view and message to Zupintra is ’show me’. Giving the company the benefit of the doubt hasn’t been helpful. I can’t invest in hopes and potential forever. Show me you can turn that AR insurance, those lines of credit, and all of that infrastructure into a revenue machine. You do that, and you’ll win back your biggest fan.

In the meantime, the stock is trading exactly like you’d expect from a company that didn’t live up to the hype quickly enough. Pure traders may see something on the current chart they like, if not now, perhaps later. I don’t think true investors quite see enough value yet…..and may not until we start seeing dollars flow in.

As always, I’ll be following the fundamentals and technicals, and will let you know as soon as I see anything worth sharing. I’m certainly not giving up on Zupintra, because the opportunity really is there. I think at this point though, we have no choice but to scrutinize instead of assume, picking and choosing our battles.

By the way, I know many of you may still be holding ZUPC shares based on our initial comments, which could make today’s op-ed a little confusing. The only thing I can say is, this is why we use stop levels. We suggested an exit at 14 cents, just because nobody ever really knows for sure what a stock’s going to do. It’s not that we’re always right, but we are always disciplined.

If you held onto your shares under 14 cents, you basically made the decision to become a long-term investor. There’s nothing wrong with it as long as you understand the upside and downside possibilities. However, it doesn’t exactly reflect what we think makes for the best trading practices - even a long-term investor can benefit from playing smart short-term defense. Just something to think about.

Any additional thoughts or insights are welcome - just click the link below. Just keep it constructive, helpful, or meaningful.

A little reward for current Phinder Technologies Inc. (OTCBB: PHDT) owners this morning…..we just learned the company is paying a stock dividend. For every twenty shares of common stock you currently own, you’ll get one more. Also for every twenty shares you currently hold, you’ll receive one warrant with an exercise price of 18 cents. The warrants will be good for about six months.

With PHDT currently trading at 14 cents, those warrants may not mean a whole lot right now. However, we’ll remind you this stock was trading at 29 cents in April, and wasn’t even really driving revenue at the time. Between now and then, a few profit centers have been set up (Argentina and Uruguay), with many more on the verge of getting rolling. Point being, I feel PHDT will eventually trade at what much better levels, rewarding those investors who stuck it out based on the bigger picture.

Side note: I know the stock hasn’t been trading all that well lately. I attribute most of that to market-wide weakness rather than a Phinder problem. It happens. Just don’t throw the baby out with the bath water, as they say. I still feel Phinder is a great opportunity, and the best time to get in (or get more) is when nobody else thinks the same. We’re at new multi-month lows now, and almost at new all-time lows. Yet, the company is likely to find more success in the next twelve months than it ever has before. It doesn’t make sense to me, and I believe it’s a disparity that won’t last very long. Just food for thought.

Here’s the press release.

Phinder Technologies’ (OTCBB: PHDT) chart appears to have, at the very least, laid a foundation at the 18 cent mark. You’ll notice that’s a 38.2% Fibonacci retracement from April’s peak. This line was tested in early April, early May, and again in early June. Each time it managed to hold up as support, despite some pretty strong selling attacks.

So what do we do with the information? Not necessarily a lot for the time being. It’s just something we’re encouraged to see, as it may keep shares aloft while the company builds up a following. If nothing else, we now have a baseline from which to monitor progress.

Though we’re certainly pleased a floor has been established, it may be a little too tight to use as a stop. (Remember, our suggested stop is actually 14 cents.)  

Note that Phinder Technologies (OTCBB: PHDT) is slated to undergo a little cosmetic surgery - the company is changing their name to Zupintra Corporation Inc. in the near future. If the new name rings a bell, it’s because ‘Zupintra’ is part of the name of the venture they’re working on in South and Latin America….Zupintra-Panama.

Not a big deal, though I do like the convenience factor of having a corporate name match the name customers are familiar with…..it just eliminates any confusion. However, aside from the ticker and name change, nothing else is changing - Zupintra is still a high-octane company we think is on the verge of explosive growth.

For more on the name change, click here. However, there’s not a whole lot to add other than what we just said. The company says they’ll let us know more when the time comes.

Anybody out there have a credit card with a $40 million line? I think the average individual would need a five-digit FICO score to be ‘pre-approved’ for a credit line that big. However, Phinder Technologies (OTCBB: PHDT) just let us know they’ve got that amount in credit through Londesborough Finance, LTD.

Just to clarify, this isn’t the same as the $10 million in credit insurance the company secured a few weeks ago. That deal allowed the company to issue up to $10 million worth of customer billing at a time. The $40 million letter of credit is outright borrowing ability. This will give Phinder the flexibility they need to keep the ball rolling without needing to issue stock or secure smaller, interim loans.

Considering the company is expecting to do $2.5 million per month by the end of Q2, I’d say the $40 million line is more than sufficient to keep them in business.

For more on the news, click here. In the meantime, something kind of struck me after I heard this………

How does a company that’s probably going to report about $10 million in revenues for 2006 get a $40 million credit line just a few days after they got credit insurance worth up to $10 million at a time? 

The answer? Business credit really isn’t all that different than personal credit. The limit and the terms are determined by your credit-worthiness (or the risk you pose to the lender). The lower the perceived risk, the higher the credit limit.

Now, what does a $40 million credit line for a $10 million company tell you? It tells me the lender has a significant amount of faith in Phinder’s viability. Perhaps PHDT is considerably more solid than we even first imagined. Just food for thought.

It’s amazing what you can learn about an industry when you immerse yourself in the emergence of one of its companies. Take today’s news from Phinder Technologies (OTCBB: PHDT) for example. We just learned Blue Peering has integrated with Phinder’s VOIP network, and will be able to rate, route, and resell Phinder’s services.

I had no idea what that meant either, so I asked. Here’s what the press release meant for all of us…..

Blue Peering is a platform where carriers and/or long-distance providers go to actually purchase the minutes needed to service their customers. The system allows the buyers to ’shop’ according to price, termination location, quality, etc. Whoever is providing the right service at the right price (like Phinder, or other sellers) is chosen. Of course, they then get paid by the long-distance company, who then turn around and mark up those minutes for their own customers. In other words, Blue Peering is a middle-man….an auction, in a sense.

This is a big deal for Phinder because it puts them into the mix with any other service providers also available through the Blue Peering platform. Ideally, Phinder will be able to beat the other sellers at least in terms of service quality or price. Based on what we know about VOIP and Phinder’s cost structure though, we don’t think that’ll be a problem.

It’ll be interesting to see just how much business flows to Phinder through Blue Peering, but I suspect it will be significant. 

Click here for more. 

One of the coolest parts of this job is learning about an industry by watching a company go through the building process. Take Phinder Technologies (OTCBB: PHDT) as an example…our newest entry into the fold. Pronounced ‘finder’, this small cap international telecom service provider is utilizing relatively-new VOIP technology on a massive scale, looking to become the middle-man between the Latin American market and the major carriers here in the United States.

One of the most exciting parts about Phinder is seeing them - almost literally - ’start’ the service on the scale they’re thinking.

It’s a point I wanted to make first, to really set the stage for today’s news. Per this morning’s press release, Phinder (well, it’s Zupintra subsidiary, technically) has integrated a Talking SIP platform into its infrastructure. I didn’t know what it meant either, but here’s what I learned from the company….

SIP stands for ’session initiation protocol’, which is simply software that makes their service work. The ‘big deal’ is just that their capacity will greatly increase, allowing them to start offering service to the likes of AT&T, Verizon, Qwest, and others. I don’t know what was in place before the SIP, but it’s my understanding that there’s not a comparison.

In addition to the capacity, this particular SIP application also manages the billing aspects associated with its use.

Overall, I’d consider this one of the last pieces of the puzzle to be put in place before the Phinder machine really gets up and running, Like we said a few days ago, we really do feel we’re at the ground-floor, watching the company take flight - in a meaningful way - right before our eyes. We think investors are coming along for the ride.

For more on today’s news, click here.