Knobias ClipReport (7-16-2007)

Submitted from Knobias ClipReport

Friday’s session saw momentum in blue chip names continue throughout the trading day although at a more subdued level compared to Thursday’s extraordinary gain. Consumer confidence numbers added fuel to the fire as did General Electric numbers, which were inline, though the name noted they were exiting the subprime mortgage business. Contrary to normal market reactions, oil prices were up, briefly hitting the $74 a barrel which marked an 11 month high. To continue the momentum, significant news would have to be on the horizon for investors to see a 14,000 print on the Dow.

On an otherwise slow day in the small cap space, one name did have a somewhat interesting piece of news that could be worth following over the coming months.

LifeVantage Corporation (LFVN), which focuses on manufacturing, marketing and selling health products, noted that they Company had been granted a patent for its antioxidant therapy formula used in Protandim(R).

The patent, titled "Compositions for Alleviating Inflammation and Oxidative Stress in a Mammal," is the first patent granted to LifeVantage. Two other patent applications have been filed by LifeVantage for Protandim(R).

Protandim(R) is a dietary supplement that increases the body's natural antioxidant protection by inducing naturally occurring protective enzymes, superoxide dismutase (SOD) and catalase (CAT). Oxidative stress occurs as a person ages, when subjected to environmental stresses, or as an associated factor in certain illnesses. TBARS are laboratory markers for oxidative stress in the body. Data from a scientific study in men and women, sponsored by LifeVantage, show that after 30 days of taking Protandim(R), the level of circulating TBARS decreased an average of 40%. With continued use, the decrease was maintained at 120 days.

According to a 2006 article in the medical journal, Free Radical Biology & Medicine, "Causing induction of SOD and CAT to decrease oxidative stress and lipid peroxidation in vivo is a much more effective approach than conventional antioxidant supplements."

The Company manufacturers Protandim(R) through an agreement with The Chemins Company, Inc. Chemins is registered with the FDA, and maintains a quality system program designed to comply with all requirements of the GMPs for Dietary Supplements and the current NPA, Natural Products Association. Their quality standards are also certified by Academy of Clinical, Environmental, Research & Information Sciences which states that Chemins complies with all "Good Manufacturing Practices of the FDA."

Akin's Natural Foods Markets(TM) and Chamberlin's(R) Natural Foods Markets, both headquartered in Tulsa, Oklahoma, recently agreed to carry the Protandim(R) product. The companies collectively have 13 stores operating in Florida, Kansas, Missouri, Nebraska, and Oklahoma.

The Company recently signed a license agreement with Montel Williams. This three-year, renewable license agreement provides LifeVantage with the opportunity to market science-based dietary supplement products using Montel's name and persona to identify and promote LifeVantage products. The Company will soon begin to promote its products in the direct response television market.

The direct response television infomercials have led some companies to very successful results with George Forman Grills and Ginsu Knives being the more knowledgeable success stories in past years.

At the present time, the Company only sells its single product, Protandim(R), but it plans to continue research, development, testing, and licensing efforts to be able to introduce additional products in the future.

For the three months ended March 31, 2007, the Company reported their third quarter net revenues of $1.0 million and a loss of 3c per share. For the three months ended December 31, 2006, the Company recorded net revenues of $1.1 million and a loss of $1.8 million, or 8c per share. For the three months ended March 31, 2006, it had net revenues of $1.4 million and a loss of 3c per share. The Company's accumulated deficit was $12.2 million and cash and cash equivalents were $724,000.

LFVN's top line results have declined in each of the last two quarters, and the Company has until September 30, 2007 to achieve sustainable growth, based on reported cash on hand and cash burn of $410,000 per quarter.

With a successful implementation of their direct television campaign and a monetization of their marketing deal with Montell Williams, the name could be one to watch over the coming months. Investors would be wise to watch.


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