The Mission Report

The MissionIR Report - July 2013

In-depth analysis, timely updates, latest market news


Market News

Company Updates


Home Prices Rise by Most in Seven Years

U.S. home prices jumped 12.2% in May from a year ago, the most in seven years. The increase suggests the housing recovery is strengthening.

Real estate data provider CoreLogic said Tuesday that home prices rose from a year ago in 48 states. They fell only in Delaware and Alabama. And all but three of the 100 largest cities reported price gains.

Prices rose 26% in Nevada to lead all states. It was followed by California (20.2%), Arizona (16.9%), Hawaii (16.1%) and Oregon (15.5%).

CoreLogic also says prices rose 2.6% in May from April, the fifteenth straight month-over-month increase.

Steady hiring and low mortgage rates have encouraged more Americans to buy homes. Greater demand, a limited number of homes for sale and fewer foreclosures have pushed prices higher. Prices are still 20% below the peak reached in April 2006, according to CoreLogic.

Sales of previously occupied homes topped the 5 million mark in May for the first time in 3 ½ years. And the proportion of those sales that were "distressed" was at the lowest level in more than four years for the second straight month. Distressed home sales include foreclosures and short sales. A short sale is when a home sells for less than what is owed on the mortgage.

Home sales are expected to increase in the coming months. That's because the number of people who signed contracts to buy homes rose in June to the highest level since December 2006. There's generally a one-month to two-month lag between a signed contract and a completed sale.

One worry is that higher mortgage rates could slow the housing recovery. Still, rates remain low by historical standards. And increases in rates could boost home sales. That's' because many Americans may act to lock in the lower rates before they rise further.

A survey by the University of Michigan released last week found more Americans believe it is a good time to buy a home because both rates and prices are just starting to rise.

Rates have been trending higher for two months. And the average rate on a 30-year fixed mortgage leapt to 4.46% last week, according to mortgage buyer Freddie Mac. That's the highest in two years and a point more than a month ago.

Mortgage rates surged after Federal Reserve chairman Ben Bernanke said last month that the Fed could scale back its bond buying later this year and end it next year if the economy continued to strengthen.

Economists say that higher mortgage rates are unlikely to stifle the housing recovery. A more critical issue is whether potential buyers can get loans. There are signs that banks have become more willing to extend mortgages.

Strong June Auto Sales Led by Pickups

U.S. buyers snapped up new cars and trucks in June at a pace not seen since before the recession.

Continuing demand for big pickups helped boost sales for Detroit's automakers. Ford said Tuesday that its sales rose 14 percent, while Chrysler's were up 8 percent. Volkswagen's sales fell 3 percent.

Analysts say they don't see much that could slow the sales momentum of the first six months. The factors that juiced sales — low interest rates, wider credit availability, rising home construction and hot new vehicles — are likely to remain in place. So far, hiccups in the stock market, higher taxes and fluctuating gas prices haven't dampened demand.

"I think the fundamentals for continued growth in the new vehicle sales industry are intact," Chrysler's U.S. sales chief, Reid Bigland, said last week.

Analysts estimate that U.S. auto sales rose 6 percent to 8 percent in June compared with the same month last year. The auto pricing site predicts that dealers sold cars and trucks at an annualized rate of 15.7 million last month, the best rate since December 2007.

Sales of pickups — which have been selling at a rate three times faster than the rest of the industry has — continued at a strong pace in June. Ford sold just over 68,000 F-Series trucks, up 24 percent from last June and the best June for trucks since 2005.

Chrysler Group sold nearly 30,000 full-size Ram pickups, up 24 percent from last June. Small businesses have been replacing their aging trucks as home construction has picked up.

Young graduates may have contributed to a rise in small car sales, said Kelley Blue Book analyst Alec Gutierrez. Gas prices, which averaged $3.60 a gallon nationwide in June and were higher than a year ago, also may have caused some buyers to look for more fuel-efficient models, he said.

Sales of Ford's recently updated Fiesta subcompact more than doubled to 9,363, while Chrysler sold nearly 6,500 Dodge Dart small cars.

Consumer confidence hit a six-year high in June. And the Standard & Poor's 500 index had its best first half since 1998, up 12.6 percent, although there was some volatility late last month.

At the same time, auto loan rates remained near historic lows in June. The rate on a four-year new-car loan is averaging 2.7 percent, according to

The rate could start rising — slowly — by the end of this year. Federal Reserve Chairman Ben Bernanke said last month that the Fed later this year may slow a bond-buying program that has suppressed long-term interest rates.

Bernanke's comments didn't affect June sales, analysts said. It often takes buyers six months or more to research and buy a new car, and a stray comment usually isn't enough to sway them. But if the Fed acts as planned, buyers worried about higher interest rates could rush to buy by the end of this year. F

ord said two of its best sellers, the Fusion sedan and Escape SUV, were flat compared with last year, when Ford was discounting older models to make way for the updated ones that are now on sale. Ford's Lincoln luxury brand was down 1 percent.

Chrysler, majority-owned by Fiat SpA of Italy, also had some weak spots. Jeep sales were flat as the company halted production of the Liberty to get ready for the launch of the new Jeep Cherokee in August.

Jeep may also have been squeezed by Chrysler's public flap with the government last month over the safety of some older-model Jeeps. And sales for the Chrysler and Fiat brands both rose 1 percent.

What Doubled Student Loan Rates Mean for You

Congress failed in a last-ditch effort to reach a deal on student loans. As a result, interest rates on some federal student loans doubled to nearly 7 percent on Monday.

Though millions of college students taking out new student loans this fall will see interest rates that are twice what they were this spring, they won't really get hammered by the increase until they graduate.

Here are some key points to consider about the student loan rate increase as borrowers contemplate how to cope:

What federal students loans are impacted by the doubling of interest rates?

Not all federal student loans are impacted. Only rates on new, subsidized federal Stafford loans doubled from 3.4 percent to 6.8 percent on July 1. Rates on existing subsidized Stafford loans will remain at 3.4 percent. Rates on new and existing unsubsidized Stafford loans will remain at 6.8 percent. Rates on federal PLUS loans will stay the same as well, at 7.9 percent.

Will this double my monthly loan payments?

The doubling of the interest rate may sound dramatic, but it does not double the loan payments. Most of the loan payment goes to pay down the principal balance of the loan. On a 10-year repayment term, the monthly payment will increase by only about one-sixth, says Mark Kantrowitz, publisher of, a network of college financial planning and scholarship websites.

What does this doubling in student loan rates mean for the average borrower?

Only about two-fifths of undergraduate students graduate with subsidized Stafford loan debt. The average amount of subsidized Stafford loan debt at graduation is about $9,000 (or $11,000 for those who receive a Bachelor's degree). Based on that amount of loan debt, Kantrowitz calculates the borrower's loan payment will increase by $18 a month on average on a 10-year repayment term (or $24 for a Bachelor's degree recipient.)

Kantrowitz is also the founder of, which has a loan repayment calculator that you can use to figure out your monthly payment on federal and most private student loans.

Do I have to make these increased payments immediately?

Most new borrowers will not receive subsidized federal Stafford loans until the fall, so they will not see the increase until then -- and the real impact on their wallets will come even later. The rate increase only affects a student once he or she leaves school. No interest is charged on a subsidized Stafford loan while the student is enrolled in college. So borrowers won't have to make the increased monthly payments on these loans until after graduation day.

Could rates come down if Congress decides to act later this summer?

Certainly Congress could make a change to lower interest rates and make it retroactive to July 1. But a retroactive change would only apply to those loans that have not yet been disbursed by the U.S. Department of Education.

Last year Congress passed two laws to implement a one-year extension to the 3.4 percent interest rate. The first law authorized the Education Department to delay disbursements on subsidized Stafford loans to July 6, 2012. The second law, which was enacted on July 6, implemented the extension to the 3.4 percent interest rate. However, policymakers are still far apart on key issues, such as whether there should be a cap on the interest rates. A retroactive change in rates may be unlikely.

Calpian, Inc. (CLPI)

Calpian recently announced that the Money-on-Mobile service offered by its Indian subsidiary is now being supported by more than 135,000 retail locations. During the month of May, approximately 53 million unique phone number customers logged into the service. Processed transaction volume for May 2013, which is measured in Indian rupees, was slightly over 887.3 million INR – an approximate 36 million increase over April 2013 processed volume.

Calpian CEO, Harold Montgomery, stated, “It has now been slightly over a year since our initial investment in Money-on-Mobile and the company has outperformed our expectations. Money-on-Mobile’s consistent growth each month indicates to us that the service has considerable room to grow in what is one of the largest consumer markets in the world.”

About Calpian, Inc. (CLPI)

Calpian, Inc. is focused on providing cutting-edge financial services in the payment processing and mobile phone-based transaction markets. In addition to earning revenue from the sale of point-of-sale terminals and various transaction fees, the company also receives strong cash flows from recurring income streams that stem from payment processing contracts in place at about 16,000 small retailers throughout the United States.

Calpian Commerce, a wholly owned subsidiary of Calpian, provides technology-focused payment solutions to assist customers in closing the gap between payment and their information technology requirements. Calpian Commerce can provide the merchant community with an integrated suite of payment services and related software enabling products by offering credit and debit card processing, ACH, mobile acceptance, and gateway payment solutions to merchants in the U.S. in traditional “brick and mortar” business environments and/or over the Internet in settings requiring wired as well as mobile payment solutions.

Money on Mobile, the fast-growing mobile payment platform known as the “PayPal” of India, has already signed up over 53 million users and more than 135,000 retailers. Only beginning to penetrate a massive mobile market, the service enables unbanked/underserved populations to handle everyday payments and transfers using simple SMS text functionality. The distribution model utilized offers strong incentives to retailers, distributors, and consumers. Historically, Money on Mobile has been growing 8-10% per month.

Calpian has established itself as a multi-faceted payments company by combining a large emerging market mobile payments service and an electronic point-of-sale payment solutions under one corporate umbrella. Led by a management team with a combined 60 years of relevant business experience, the company is a well-managed operation with exceptional growth potential in burgeoning markets across the globe.

VistaGen Therapeutics, Inc.

On Friday, VistaGen provided an update on its strategic financing agreement with Autilion AG. Under the amended terms, Autilion AG has committed to invest $36 million in VistaGen in consideration for 72 million shares of restricted VistaGen common stock, at a price of $0.50 per share, in a series of closings ending on or before September 30, 2013. The parties have amended their agreement, completed a first closing and scheduled additional closings to occur in July, August and September 2013.

Shawn K. Singh, VistaGen's Chief Executive Officer, stated, "I met with Autilion's team earlier this week, and we have been working closely with them since signing our agreement in April. We are confident and excited about completing this transformative financing. Building on the positive developments in our labs presented during the Annual Meetings of the Society of Toxicology and International Society of Stem Cell Research in March and this month, respectively, we look forward to accelerating our lead programs towards valuable outcomes for our shareholders."

About VistaGen Therapeutics, Inc. (VSTA)

VistaGen Therapeutics, Inc. is a biotechnology company applying stem cell technology for drug rescue and cell therapy. Drug rescue combines human stem cell technology with modern medicinal chemistry to generate new chemical variants ("drug rescue variants") of once-promising drug candidates that have been discontinued during late-stage preclinical development due to heart or liver safety concerns. VistaGen also focuses on cell therapy, or regenerative medicine, which includes repairing, replacing or restoring damaged tissues or organs.

VistaGen's versatile stem cell technology platform, Human Clinical Trials in a Test Tube™, has been developed to provide clinically relevant predictions of potential heart and liver toxicity of promising new drug candidates long before they are ever tested on humans.

By more closely approximating human biology than conventional animal studies and other nonclinical techniques and technologies currently used in drug development, VistaGen's human stem cell-based bioassay systems can improve the predictability of the drug development cycle and lower the cost of new drug research and development by identifying product failures earlier in the cost curve. According to the Food and Drug Administration even only a ten percent improvement in predicting failure before clinical trials could save $100 million in development costs, which savings ultimately could be passed on to patients.

Using mature human heart cells produced from stem cells, VistaGen has developed and internally validated CardioSafe 3D™, a novel three-dimensional (3D) bioassay system for predicting the in vivo cardiac effects of new drug candidates before they are tested in humans. VistaGen is now focused on using CardioSafe 3D™ to generate up to two new, safer small molecule drug rescue variants every twelve to eighteen months. VistaGen anticipates that these drug rescue variants will be modified versions of once-promising new drug candidates that have been discontinued by pharmaceutical companies and academic research institutions because of heart toxicity concerns, despite substantial prior investment and positive efficacy data demonstrating their potential therapeutic and commercial benefits.


PITOOEY! Inc. provided a comprehensive shareholder update that summarized the opportunities available in the digital advertising industry, the social media and mobile marketing services it provides, the next version of the PITOOEY! App, its recently launched C1M Affiliate Marketing Program, and the recent agreement signed with TopHat Capital.

The global digital marketing industry is expected to reach over $160 billion by 2016, according to eMarketer. Of that amount, eMarketer believes that approximately $24 billion will be dedicated specifically to mobile advertising by 2016. PITOOEY!'s services encompass both social media and mobile advertising services, so the company believes it is uniquely positioned to capture a niche in this large and rapidly growing industry.

About PITOOEY! Inc. (PTOO)

PITOOEY! Inc. is a digital marketing agency with proprietary technology designed to assist companies in establishing and developing a presence on the Internet. The company's offerings come from three distinct, yet synergistic, business groups, Choice One Mobile, Rockstar Digital, and PITOOEY!™ Mobile, with the company's flagship product, the PITOOEY!™ app.

The PITOOEY! app is a preference based, searchable ad network. Using the PITOOEY!™ platform, a partner business is able to upload broadcasts into a database, which consumers "pull" according to a profile based on their interests, previous purchases, current location, or other data. The PITOOEY! app provides businesses with a unique engagement tool while serving consumers deals, valuable content, and location-based information.

Choice One Mobile provides various services involving content creation, search engine optimization, social media management, and mobile platform optimization using "Mobile Caviar" (sm) - an array of unique processes for the distribution of mobile marketing content. Rockstar Digital develops and manages high-end digital content including site, social and mobile content management, as well as customized e-commerce.

PITOOEY! is putting the power to fundamentally change the nature of interaction between a business and their customers directly into the consumer’s hands via its powerful mobile and digital marketing capabilities. Leveraging its own marketing expertise to attract a crowd of businesses and consumers, the company is quickly capitalizing on a new era in communication that enables an unparalleled level of engagement between customer and merchant.


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