Material Technologies, Inc. Rated ‘Speculative Buy,’ Target Price $3.00 by Beacon Equity Research

New report issued on technology company with patented, more cost-effective technology for inspecting bridge infrastructure.

Material Technologies, Inc. (MTTG) has been rated “Speculative Buy” with a target price of $3.00 by Beacon Equity Research.

The full report is available at

http://www.BeaconEquityResearch.com.

In the report, the analyst writes, “Material Technologies Inc. (Matech) is an engineering company that provides technology solutions for detection, measurement and monitoring of metal fatigue in metal-based structures and equipment.

 

The Company holds exclusive patent rights to several technology products including Electrochemical Fatigue Sensor and Fatigue Fuse. This technology can measure and monitor microscopic cracks in metal structures, and thus help prevent disastrous structural failures. These products have wide-scale applications in evaluating America’s aging bridge infrastructure. Matech also plans to market its technology to operators of windmills and antenna towers, highway signs and aircraft.
The Company is the successor to the business of Material Technology, Inc. and Tensiodyne Scientific, Inc. Tensiodyne was formed in 1983 and began to develop Fatigue Fuse. In 1993, the Company commenced the development and testing of Electrochemical Fatigue Sensor. In March 1997, the Company was re-named Material Technologies, Inc.
Investment Appeals

tThe Company is primarily focusing on the bridge market in the US where the bridge infrastructure is old and in need of repair. According to the Federal Highway Administration, 29% of the bridges in the US are more than 50 years old and urgently require checking for fatigue and cracks. It is estimated that nearly 100,000 bridges in the US are structurally deficient and require immediate attention.

Cracks in these massive structures can lead to major accidents and disasters. As a result, the US government has set aside funds to improve the efficiency and safety of surface transportation. With overall spending in this sector set to increase significantly, the Company is poised to benefit from demand for its Electrochemical Fatigue Sensor technology by government agencies and railroad and bridge authorities.

Business opportunity extendable to additional markets Matech’s technology has applications in a variety of markets, including highway and railroad bridges, steel buildings, turbines, windmill and antenna towers, aircraft and marine vessels in the US and abroad.

Significant cost and time benefits

The traditional process of visual inspection by bridge inspectors is inefficient and very time-consuming. Also, it cannot detect the cracks accurately and is expensive and labor –intensive. The Company’s Electrochemical Fatigue Sensor technology detects fatigue sensitive areas in structures with maximum accuracy and delivers inspection results immediately. To ensure the safety of structures, engineers tend to increase the usage of materials, leading to higher costs. Continuous monitoring of fatigue through deployment of the Matech’s technology helps identify problem areas much sooner and reduce time and material costs.

Portfolio of patented products

The Company holds patent rights to several products for detecting metal fatigue. It has developed the Electrochemical Fatigue Sensor (EFS) and Fatigue Fuse technology. While EFS identifies minute cracks in a metal structure, Fatigue Fuse continuously monitors structures and detects accumulated fatigue immediately. The Company has negotiated several contracts to install its products on bridges in the US.

Technological capabilities limit competition

The Company’s technology is easy to use and requires minimal training. Unlike other available technologies which are limited to only identifying cracks, Matech’s EFS system can also detect the potential widening of the cracks well in advance. The system also consumes less power and can work on battery if external power is not available.

Acquisition expands product portfolio

In August 2006, the Company acquired Materials Monitoring Technologies, Inc. from UTEK Corporation. MMTI has worldwide licensing rights to patented inventions which include “Sensor Array System” and “System for Damage Location Using a Single Channel Continuous Acoustic Emission Sensor”. This acquisition provides Matech with an additional proprietary technology for structural damage detection.”

Reliant Financial Service Corporation Rated ‘Speculative Buy,’ Target Price $0.90 by Beacon Equity Research

New report issued on fast growing Canadian mortgage brokerage firm that recently rolled out a new product line that will expose the company to the prime mortgage market.

Reliant Financial Service Corporation (RHWC) has been rated “Speculative Buy” with a target price of $0.90 by Beacon Equity Research.

The full report is available at

http://www.BeaconEquityResearch.com.

In the report, the analyst writes, “Reliant Financial ServiceCorporation is an emerging player in the Canadian home mortgage market. The Company provides end-to-end services related to mortgage lending to non-prime borrowers purchasing residential real estate.

 

The Company carries out its mortgage banking business through its subsidiaries. It has designed unique mortgage programs for its clients, providing the benefit of long-term amortization. The Company has developed its own in-house computerized residential mortgage documentation and processing systems for providing mortgage loans.

Market opportunity

Reliant focuses on the sub-prime lending segment consisting of borrowers with weak credit histories due to low income, brief or interrupted employment histories, past credit problems, lack of funds for down payments or a lack of documentation of past income. Because of problematic credit histories, these borrowers don’t qualify for conventional loans and must seek financing through the sub-prime segment. Sub-prime loans are priced higher than conventional loans due to their greater risk and comparatively higher servicing and compliance costs. The Canadian sub-prime lending market is in an early development stage. According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), sub-prime mortgages represented only about 5% of all outstanding mortgages in 2006. The number, however, is rising.

 

The Canadian economy grew at a solid pace in 2006 with real GDP growth of 2.7%. Labor markets also continued to improve; employment grew 1.9% and the seasonally adjusted unemployment fell to 6.1% in December,2006, from 6.5% in December, 2005. This positive growth scenario created a strong base for increased housing demand.

Rising demand for housing is driving home prices higher. The average home price in Canada rose 10% in 2004 and 2005 and 11% in 2006. Home prices are forecast to increase further in 2007. Due to rising residential property costs, buyers are increasingly relying on mortgage bankers to provide part of the purchase price. Many new buyers don’t meet the criteria for prime mortgages and turn to the sub-prime lenders for financing. This creates a growing business opportunity for Reliant.

Strong Canadian mortgage market

According to the Canadian Institute of Mortgage Brokers and Lenders (CIMBL), Canadian mortgage credit is expected to grow 10.5% annually to $808 billion by year-end, 2007 from $730 billion in 2006. In the 2006 second quarter, total outstanding residential mortgage credit increased to $687 billion from $617 billion in the same period of 2005. According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), Canada’s mortgage market is very healthy as compared to the US mortgage market because of the following reasons:

• In Canada, the sub-prime market accounts for only 5% of all outstanding mortgages whereas in the US it is around 20%.

• The overall arrears rate on mortgages is less than 0.5%

• Prudent Canadian underwriting practices have controlled the market share war for the sub-prime business and thereby limited the volume of mortgage lending to unqualified borrowers

• Increase in employment, lower interest rates and longer amortization period (over 25 years) have given strength to the Canadian mortgage market.

Investment Highlights

MCAP agreement

Reliant Home Mortgage Canada Inc. has signed an agreement with MCAP, a leading Canadian independent mortgage and equipment financing company. MCAP has more than $30 billion in assets under management and operates in four business areas - residential mortgages, commercial mortgages, construction loans and equipment financing. As part of this agreement, MCAP will become the primary servicer of Reliant mortgages.

Agreement with Centum Financial Group Inc

The Company has formed a strategic partnership with Centum Financial Group Inc. Centum has established a national network of mortgage broker firms across Canada, consisting of some 150 locally franchised mortgage centers and more than 1,000 mortgage professionals. It has relationships with 30 mortgage lending financial institutions.

Introduction of new segment

Reliant plans to introduce new mortgage indemnity insurance products targeting prime mortgage clients. This new product line will complement Reliant’s existing sub-prime mortgage business and position the Company as a full-service provider of insured mortgage programs for both the prime and sub-prime lending segment. The Company is in discussions with several mortgage indemnity guarantee insurance providers regarding its new product line.

Bank of Montreal strategy change creates business opportunity

Bank of Montreal, a major Canadian bank, recently discontinued the use of mortgage brokers for marketing its mortgage products. This creates a business opportunity for Reliant. The Company believes it can garner a major share of the Canadian residential mortgage market with its new prime and sub-price lending products. Experienced management provides comfort Non-prime lending is a high-risk business and management experience is key to managing the risks. Boyd Soussana, the Company’s CEO, has 20 years financial industry experience and expertise in financial sales, marketing, product design, insurance and compliance.

Conforce International, Inc. Rated ‘Speculative Buy,’ Target Price $1.25 by Beacon Equity Research

New report issued on shipping container company which has developed a new composite flooring material that is more affordable and durable than conventional wood flooring.

Conforce International, Inc. (CFRI) has been rated “Speculative Buy” with a target price of $1.25 by Beacon Equity Research.

The full report is available at

http://www.BeaconEquityResearch.com.

In the report, the analyst writes, “Conforce International (CFRI) has developed and commenced marketing an innovative new composite container flooring material called EKO-FLOR. The Company operates through two business divisions: Conforce Container Corp. and Conforce 1 Container Terminals. Conforce 1 Container Terminals provides storage and handling services to shipping companies and currently generates revenues for the Company. Conforce International is headquartered in Ontario, Canada.

Conforce Container Corp. has developed a proprietary product, EKO-FLOR, which is a composite floor system that eliminates the need for wood, enhances performance and reduces cost. The Company has successfully completed Phase Three of Industry Product Testing of EKO-FLOR. The product has been certified by the American Bureau of Shipping (ABS) for use in shipping containers worldwide. The Company is in the final stages of commercializing EKO-FLOR and is currently developing its sales and marketing channels.  EKO-FLOR was officially launched in December of 2006 at the world's leading container event, the 31st Annual Intermodal Conference held in Hamburg, Germany.

 

Conforce International owns 51% of Conforce 1 Container Terminals. This subsidiary provides storage and handling services to the international steamship lines for their empty and loaded containers. The Company has a container depot with storage capacity for 5,000+ containers. Conforce 1 provides complete container-related services to the international shipping lines, including on/off lifts, empty/loaded storage, transportation and on-site repairs. The Company’s Container Terminals business has been experiencing robust growth.
Conforce has developed considerable expertise in composite materials design and development, and is in the process of securing patents for processes relating to EKO-FLOR and composite materials. There is considerable interest within the container industry in the Company’s EKO- FLOR and other development-stage composite materials. Conforce is currently developing new composite products for the commercial and retail markets. The Company believes the retail , in particular, has significant market potential and is engaged in talks with several large companies interested in its proprietary EKO-FLOR and other composite material products.

Investment Highlights

Successful Introduction of EKO-FLOR

Conforce has completed industry testing of EKO-FLOR and obtained ABS certification for its use in shipping containers worldwide. The Company introduced EKO-FLOR at the December, 2006 t Annual Intermodal Conference in Hamburg. EKO-FLOR has been well-received by shipping industry experts and the Company has already received trial orders from various companies. The Company anticipates capturing a significant share in the multi-billion dollar shipping container market.

EKO-FLOR Trial Orders

Conforce recently received a trial order from Oceanex Inc. for its EKO-FLOR. As part of this agreement, Conforce will begin supplying EKO-FLOR flooring systems to Oceanex in June of 2007. Oceanex will test EKO-FLOR’s performance characteristics under normal operating conditions in ships, railcars and on chassis carrying a wide range of cargo. The Company anticipates receiving initial commercial orders for EKO-FLOR in late 2007 and expects most of these to be multi-year, high volume orders.

Worldwide Associates Agreement

Conforce has entered into an agreement with Worldwide Associates, a Washington, D.C. business owned by retired general Alexander M. Haig, Jr. and his son. The agreement calls for Worldwide Associates to provide Conforce with assistance and advice in business development, marketing, sales and corporate finance. Through this agreement, Conforce can significantly broaden the scope of its sales, marketing and business development initiatives, and leverage the strength of Worldwide Associates' expertise, global presence, and influential business relationships.

Intellectual Property and New Product Development

The EKO-FLOR composite flooring system evidences the Company’s strong research and development skills. Years of research and testing have provided Conforce with industry-leading expertise. The Company plans to leverage its technical skills and research capabilities to develop additional advanced products and services for the container industry. In addition to EKO-FLOR, the Company has two new composite-based flooring systems in advanced stages of development.

Strong Growth Anticipated

Conforce recently issued revenue and earnings guidance for next year and the following year. The Company anticipates strong sales of EKO-FLOR and other new products and continued growth in its terminal operations. For the period from April 1, 2007 to March 31, 2008, Conforce expects to generate revenues of between $26 - $29 million, earnings before interest, taxes, depreciation and amortization (EBITDA) of between $3.6 - $3.9 million and net earnings ranging between $2.2 - $2.5 million. The majority of revenues will likely come from EKO-FLOR sales in the second half of FY 2007. In the period beginning April, 2008, and extending through March , 2009, the Company projects revenues at between $112 - $116 million, EBITDA at between $23 - $26 million and net earnings ranging between $14 - $16 million.”