The Mission Report

The MissionIR Report - Mid-June 2012

In-depth analysis, timely updates, latest market news


Market News

Company Updates


U.S. Producer Prices Fall 1% in May

Lower costs for food and energy pulled the U.S. producer price index down 1.0% in May, the Labor Department recently reported, in the biggest one-month drop in close to three years.

The results were close to economist expectations. Analysts had predicted a fall of 0.9% for the month.

Core producer prices, excluding volatile food and energy, rose 0.2% -- matching analysts' expectations. More expensive drug prices pushed up the index, the government said.

The May decline in the PPI was the largest since a drop of 1.2% in July 2009, just when the recession was ending.

This is the second straight monthly decline in wholesale prices. In April, the headline PPI rate had fallen 0.2%, while the core rate had risen 0.2%.

Many Federal Reserve officials have said that they expect inflation to stay near their 2% annual target in coming months. Inflation concerns have eased along with falling crude oil prices.

Economists are debating whether the Fed will engineer another round of quantitative easing to help stimulate the economy.

The next Fed meeting is expected to be contentious with some officials arguing for more action while others think the central bank has done enough.

In other data released, the Commerce Department said retail sales fell for the second month in a row in May.

In the 12 months ending in May, producer prices gained 0.7%. This is the lowest annual gain since October 2009. The annual rate of inflation soared to 7.1% last July but has moved steadily down in recent months.

Minus food and energy, those prices have climbed 2.7%. This is down slightly from a reading over 3% at the beginning of the year.

Energy prices fell 4.3% at the wholesale level in May, the data show. This was the biggest drop since July 2009.

Gasoline prices fell 8.9% in May while residential natural gas fell 2.5%. Partially offsetting these declines was a 1.5% gain in home heating oil.

Wholesale food prices in May fell 0.6%. Prices for fresh fruit fell 7.1% while meat prices declined 2.2%.

Prices were also down further back along the supply chain.

Prices for intermediate goods fell 0.8% in May, as energy goods lost 3.3%. Excluding food and energy, prices for intermediate goods fell 0.2%.

Prices for crude goods declined 3.2% as crude energy materials fell 5%. Crude nonfood materials less energy prices fell 1.3% during the month.

Mortgage-Application Volume Up 30%

The number of total mortgage applications filed in the U.S. last week jumped 30% week-over-week, the Mortgage Bankers Association said.

The refinance index increased 32% from the previous week, according to the MBA's weekly survey, which covers more than three-quarters of all U.S. retail residential mortgage applications. On a seasonally adjusted basis, the purchasing index gained 13% from one week earlier, MBA said.

Low mortgage rates have convinced many homeowners to refinance their mortgages, though tougher lending requirements still keep many prospective home buyers from taking out new debt.

The share of applications filed to refinance an existing mortgage made up 78.8% of total applications, while adjustable-rate mortgages made up 5.1% of activity last week.

The average rate on 30-year fixed-rate mortgages with conforming loan balances rose to 3.88% from 3.87%, the lowest rate in the survey's history, a week earlier. Rates on similar mortgages with jumbo loan balances decreased to a new survey low of 4.12% from 4.13%. The average rate on FHA-backed 30-year fixed-rate mortgages edged up to 3.71% from 3.7% in the prior week.

The average for 15-year fixed-rate mortgages rose to 3.23% from a survey low of 3.2% a week earlier. The 5/1 ARM average was unchanged at 2.78% from the previous week

Euro Recovers After Spain's Yields Rise

The euro retraced its losses last week, keeping the shared currency near $1.25, after investors backed away from Spanish bonds, sending yields to their all-time high.

Trying to gauge the risks and safety nets of Spain, Greece and Italy left many traders unwilling to lift the shared currency much from its lowest level in almost two years, a day after a massive bank bailout for Spain aided the unit.

U.S. stock futures advanced, buoyed by gains in European markets, but caution prevailed given increasing worries about Spain's debt crisis.

The dollar index (NYE: DXY), which measures the greenback against six currencies, wavered between positive and negative territory. It recently edged down to 82.386.

Concerns about the coming Greek elections and a lack of clarity on the Spanish bank-aid agreement had pushed the European currency down from a high of $1.2657, in the wake of Spain's announcement that it was seeking assistance for its financial sector.

Spain's 10-year yields jumped to 6.74%, their highest closing level ever, according to Tradeweb. Italy's yields jumped, too.

Earlier, the euro was supported by traders following more technical factors.

Besides the euro, "foreign currencies may also benefit against the dollar in the very near term from the ongoing technical correction, but uncertainties ahead of this weekend's Greek elections are likely to limit upside potential," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

The June 17 national election in Greece remained an overhang for the euro. Investors are waiting to see if any party will win enough votes to decisively follow through on the country's existing austerity measures or demand renegotiation, which would risk the possibility of the country's leaving the euro.

"Prospects of a 'Grexit' have by no means dissipated, but at least the Greek political parties are not advocating this scenario, even if they would like to renegotiate bailout terms," said Credit Agricole analysts.

"Although the [U.S. dollar] will face some softer data releases this week, it is not clear that the [euro] will be best positioned to benefit from this," they said.

The Japanese yen slipped after the International Monetary Fund gave the Bank of Japan some cover to pursue "powerful monetary easing" to increase the chance of meeting its 1% inflation goal by 2014. The IMF encouraged officials to expand its asset-purchase program and possibly intervene in currency markets to limit the yen's gains.

The dollar had risen as high as 79.68 yen earlier, from ¥79.45 late Monday. It more recently bought ¥79.44.

The euro rose 0.4% to buy ¥99.40.

The IMF's "statements could provide important 'cover' for the [Ministry of Finance]/BoJ to intervene in the aftermath of any further euro-zone pressures," said Greg Anderson, a currency strategist at Citi. "They imply that by intervening, Japan would merely be protecting its economy from recession caused by an overvalued currency getting more overvalued."

It's unlikely that Japanese officials would intervene unless the dollar-yen drops sharply or the dollar falls below 77 yen, he wrote in emailed comments.

The dollar has gained 1.4% against the yen this month, and is up 3.3% so far this year.

Also, the BoJ is unlikely to intervene, or do anything overt like quantitative easing, until after the Greek elections.

"We believe that all the [Group of Seven] central banks are keeping their powder dry to be able to react forcefully after the Greek election, if necessary," Anderson said.

The British pound rose to $1.5583, from $1.5504.

Cardium Therapeutics, Inc.

Cardium Therapeutics recently announced that it has signed an agreement with Advanced Biosciences Research, an affiliate of bioRASI, for the planned commercialization of Cardium's professional-use Excellagen® topical wound care management product in Russia and the nine additional member countries comprising the Commonwealth of Independent States (CIS). bioRASI will be responsible for the registration and approval for the marketing and sales of Excellagen in the Russian Federation, and will assist Cardium to develop an infrastructure plan for the marketing, sales, and distribution of Excellagen in Russia and the CIS following final market approval.

"We are pleased to broaden our relationship with bioRASI, the sponsor and development partner responsible for the management and regulatory compliance of our Generx® DNA-based cardiovascular angiogenic biologic Phase 3 / registration study for the treatment of patients with myocardial ischemia due to coronary disease which is currently underway in Russia," stated Christopher J. Reinhard, Chairman and CEO of Cardium Therapeutics. "We recently announced plans for the expansion of Excellagen into the European Union consisting of 27 member countries through the CE Mark registration process and a marketing and distribution agreement with BL&H Co. for South Korea. The Russian market represents another important step forward in our international commercialization strategy for Excellagen."

About Cardium Therapeutics, Inc. (CXM)

Cardium Therapeutics, Inc. is a health sciences and regenerative medicine company focused on acquiring and strategically developing new and innovative products and businesses to address significant unmet medical needs. Comprised of large-market opportunities with definable pathways to commercialization, partnering, and other economic monetizations, Cardium's current portfolio includes the Tissue Repair Company, Cardium Biologics, and the company's in-house MedPodium Health Sciences healthy lifestyle product platform.

The company's lead commercial product Excellagen® topical gel for wound care management recently received FDA clearance for marketing and sale in the United States. In addition to plans to advance the product's commercialization in the U.S. and internationally via strategic partnerships, the company plans to develop new product extensions for additional wound healing applications and is working towards securing approval for marketing and sale in South Korea and through the CE Mark application process in the European Union.

Generx®, Cardium's lead clinical development product candidate, is a DNA-based angiogenic biologic designed to treat patients with myocardial ischemia due to coronary artery disease. Cardium recently initiated its Generx Phase 3 / registration study in Russia. Consistent with its capital-efficient business model,

Cardium is also actively evaluating new technologies and business opportunities. The company utilizes its team's skills in late-stage product development to bridge the critical gap between promising new technologies and product opportunities that are ready for commercialization. Cardium is dedicated to building on its core products and product candidates to continually create new opportunities for greater success. Leveraging the advantages of its capital-efficient, asset-based business strategy, the company provides a diversified and more balanced portfolio of risk/return opportunities with the chief objective of providing long-term shareholder value.

GlobalWise Investments, Inc.

In recent news, GlobalWise Investments and its wholly owned subsidiary Intellinetics reported entry into a Channel Sales Partnership with is the largest provider of cloud-based Enterprise Resource Planning (ERP) software systems specifically designed for hearing care practice management. The jointly developed eDocs solution will help accelerate its expansion into the European market, which aligns perfectly with GWIV's globalization efforts.

This is great news for GlobalWise as they continue to execute their strategic growth initiatives with cloud based market leaders. Half of the approximately 60 clinics allowed to participate in the eDocs beta process have already provided strong positive feedback for the benefits delivered -- particularly in its ability to support tablet devices and mobility. For example, one of the beta participant clinic groups processed over 14,000 documents through eDocs in only 20 business days and touted the tremendous efficiencies gained by accessing clinical records with their fleet of iPads.

About GlobalWise Investments, Inc. (GWIV)

GlobalWise Investments, via wholly-owned subsidiary Intellinetics, Inc., is a leading-edge technology company focused on Enterprise Content Management (ECM) solutions for the digital age. The ECM industry continues to grow rapidly as a result of unrestricted proliferation of digital content within today's business environment. Leveraging its proprietary cloud-based computing software, GlobalWise is poised to capture a significant market share of this burgeoning industry.

GlobalWise's ECM service is delivered to customers via five unique delivery models which cover the spectrum of business needs: Cloud/Saas (Software as a Service), Hardware Vendor Integrated Service, Software Vendor Integrated Service, Premise (Client-Server), Hybrid (Premise & Cloud/Saas).This diversity gives advanced security & privacy features with an on-demand structure needed for large Tier 3 and Tier 4 businesses that are currently underserved by the market.

The Intellinetics platform defines a new industry benchmark and game-changing approach by combining advanced virtualization & automated content management with an open and service-oriented architecture using web services. The company provides strategies, tactics, and technologies used to manage paper and digital assets from capture to long-term archive, without the need for manual processes conducted by a full time employee.

GlobalWise's management boasts a combined total of over 150 years in ECM leadership and industry experience. The ECM industry is expected to exceed $5.1 billion by 2013 with Gartner predicting a compound annual growth rate of 9.5%. IBM Market Insights predicts adoption of cloud computing to grow by 26% CAGR between 2010 through 2013. Leveraging management and key department heads, Intellinetics has a strong foundation from which to capture significant market share within the lucrative $149 billion Business Software & Services industry.


SEFE CEO Don Johnston issued a letter to shareholders and the investment community. In that letter, he emphasized a number of technological developments and operational changes related to the company's Harmony III system. The Harmony III utilizes the phenomena of atmospheric corona discharge by a proprietary collection element held in the air by a balloon. Patents filed for by the company include the company's strain reduction system, teather contact device, and its way for detecting the concentration of atmospheric ions. The company has also put together a unique Ballon Launch Assist system, among other engineering innovations.

Additionally, Mr. Johnston noted that the company has "stepped up" its marketing efforts by launching the Revmodo website with the help of Shea Gunther and Michael d'Estries, two award-winning green marketing veterans. SEFE believes the Revmodo site will help inspire new clean energy concepts and believes it will also enable access to a wide variety of potential business partners that will bolster SEFE's commercial possibilities. Finally, Mr. Johnston laid out the next important milestones for the Harmony III system. The letter is a must-read for anyone interested in the company and can be accessed at the following link: SEFE Issues CEO Letter to Shareholders.

About SEFE, Inc. (SEFE)

SEFE, Inc. is focused on developing and deploying a promising solution to our world's energy problems. It is now more obvious than ever before that fossil fuels are increasingly more difficult to find and harvest. It is also well known by now that alternative energy, such as solar, wind and nuclear, has its own list of unsolvable issues. SEFE's unique technology, in comparison, harvests unadulterated, carbon-free, always-on and problem-free energy from a never ending source.

The company calls it True Energy because it's not an alternative to anything and it certainly isn't petroleum based. SEFE's solution works by capturing and converting naturally occurring static electricity in the atmosphere into a constant, abundant and decidedly green source of renewable energy. The patented technology has been designed to be robust, easy to implement and user-configurable from the start so that these systems can be deployed anywhere and generate current usable by any localized source.

Because the cost of deploying and maintaining SEFE systems is relatively low, the company believes it can sell a kWh of electricity at $0.03 per unit. In comparison, nuclear energy costs approximately $0.14 per kWh and wind energy costs approximately $0.07 per kWh. SEFE is currently prosecuting four pending United States Patent Applications to protect their core intellectual property. Once issued, these patents will provide barriers to entry and fortify their foundational business construct.

The company has grown from a national company to an international concern with planned partnerships in China, India, Australia and the EU. SEFE is also well supported by a highly capable management team that has accumulated more than 30 years of experience in corporate management and governance. The company also employs a host of associates who are experts in fabrication and product development, FAA regulations, engineering and utility consultation, among others.


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