52-week low / high: $7.45 / $20.75
Shares Outstanding:  16.82 million

Lifeway Foods, Inc. (Lifeway) is a maker of dairy and non-dairy health food products based on an ethnic Russian dairy drink called kefir. Lifeway’s Kefir is a dairy beverage that contains 10 live and active probiotic cultures, what the company calls "friendly" cultures versus yogurt, which contains only two or three "friendly" cultures. Lifeway’s Kefir products, according to company literature, offer more nutritional benefits.

Lifeway’s product lines includes, Kefir, various drinkable yogurts sold under the La Fruta and Tuscan brands, and BasicsPlus, a dairy based dietary supplement beverage said to support the immune system. The company also produces soy-based kefir products under the SoyTreat trademark as well as cheeses and spreads under the Farmer Cheese, Sweet Kiss and Cream Cheese Gourmet brands and several more products.  Lifeway sells to supermarkets, grocery stores, gourmet shops, delicatessens and convenience stores.

Benefiting on the trends toward healthy eating and organic foods in America and a marketing effort that leverages celebrity usage, Lifeway is enjoying some very impressive success.

During the third quarter ended Sept. 30, 2007, sales increased 32% to $9.8 million year-over year. Sales of original Kefir were $8.4 million, up 28%.

Analysts are looking for 2007 sales of $39 million, 40% ahead of 2006 revenues and EPS of $0.26 versus $0.15 in 2006, a 73% improvement.

Man Sang Holdings, Inc. is a wholesaler and processor of pearls, pearl jewelry products and other jewelry products. The company also derives income from real estate holding in Shenzhen, People's Republic of China (PRC) and from its processing facility in the PRC and Hong Kong.

The company offers multiple product lines of pearls and pearl jewelry, from freshwater to Japanese cultured pearls to necklaces, pendants, bracelets and cufflinks, to name a few. Man Sang sells to over 930 wholesale customers in Europe, the United States and Asia.

Man Sang owns land-use rights to approximately 470,000 square feet in the Gong Ming Zhen, Shenzhen special economic zone and the PRC, where it constructed an industrial complex (Man Sang Industrial City), for which the rights run through 2041.

The company’s Man Sang Industrial City consists of 27 buildings, totaling approximately 813,000 square feet, 18 of which are rental properties. The company utilizes nine for pearl processing, pearl and jewelry assembling, administration and staff accommodation.

Revenues for 2007 (ended March 31, 2007) were $51.35 million, up 5.28% from 2006. Earnings were a very handsome $0.56 per share, up 58% from $0.35 in 2006. The company paid a cash dividend of $0.0323 on Aug. 8, 2007. First quarter 2008 earnings were a robust $0.18, which puts it on track for another banner year.       

52-week low / high: $3.49 / $15.35
Shares Outstanding:  8.78 million
Market Capitalization:  $76.60 million

Versar, Inc. provides infrastructure management (facilities management, construction and environmental compliance) and homeland security services to the United States government and private sector worldwide. Clients include: the Department of State, Defense Logistics Agency, Army Corps of Engineers, the General Services Administration, as well as various agencies within the Commonwealth of Virginia.

The Department of Defense (DoD) uses Versar to support its facilities in the areas of detection, management, prevention, and clean-up of toxic or hazardous waste. Versar currently performs support activities at Vandenberg AFB, Beale AFB and Buckley AFB in the United States, and Ramstein and Moron AFB in Europe.

Versar also operates GEOMET Technologies, which manufactures chemical protective suits and associated equipment to United States and Australian military services. This division also provides testing services of chemical protective equipment and clothing, evaluation of detection equipment and analysis of environmental samples, as well as site remediation and environmental cleanup support among other services.

Net income for fiscal year 2006 was $1,347,000, or $0.16 per share, compared to a net income of $202,000, or $0.02 per share, in fiscal year 2005. The company’s funded contract backlog was up 55% over 2005 to $48 million; however, 2006 revenues were $60.9 million, down 10% from 2005. The decrease was largely due to late passage of the Iraq supplemental appropriation and associated contract-funding delays by the DoD, due to the Iraq war.

Composite Technology (CPTC) develops, manufactures and markets energy generation and transmission equipment (and consulting services) through two primary subsidiaries: CTC Cable and DeWind equipment. CTC Cable produces composite “rod” for use in the company’s aluminum conductor composite core (ACCC) transmission line. CPTC also manufactures composite power structures and wind generation turbines. The company’s primary markets are the United States, Europe and China.

Aluminum and carbon core cables offer distinct advantages over steel core transmission cables, including that they are of lighter weight, reduce “line sag” in hotter climates allow greater distance between towers and provide nearly double the power flow. The wind turbine product, offered through DeWind (a recent acquisition), offers better grid compatibility and requires less maintenance.

Composite Technology is experiencing tremendous growth thanks to the advantages of the DeWind turbine and large infrastructure investments in ACCC, especially in China. In late August, the company announced orders for 373 miles of ACCC for China alone.

Revenues for 2006 were up nine fold from $1 million in 2005 to just over $10 million. The company is on track to quadruple revenues again in 2007. Analysts estimate 2007 revenues to be just over $40 million and 2008 revenues above $100 million,  based on market acceptance and product demand.

BioMimetic Therapeutics, Inc. is in the process of commercializing breakthrough therapies to aid in musculoskeletal injury and disease healing. The company has developed a unique drug-delivery system, which combines recombinant proteins and a tissue-scaffold to stimulate healing and tissue regeneration. BioMimetic’s first product, Growth-factor Enhanced Matrix (GEM 21S) received U.S. FDA approval in 2005 for the treatment of bone loss and gum recession as a result of periodontal disease.

In February, BioMimetic received orphan drug designation from the FDA for rhPDGF-BB for the treatment of osteonecrosis of the jaw. In June the company received approval to begin evaluation of GEM OS1 Bone Graft in foot and ankle fusions.

Future products under development include a synthetic bone regeneration system, GEM 21S (for which the company received marketing approval in Canada in September 2006) and GEM OS2 Injectable Bone Graft, for radius bone fractures (currently being evaluated in Sweden).

BioMimetic currently has manufacturing supply agreements with Novartis, Orthovita, Inc. and Kensey Nash for key bio-active and synthetic scaffolding component products.

While sales have declined year to year, most analysts see 2007 as a major turnaround year for BioMimetic, with sales expected to reach $7.5 million in 2007, up from $4.1 million in 2006 and growing to $12.3 million in 2008. Annual growth rate is seen around 30%. We believe the company has remarkably bright prospects.

American Physicians Service Group Inc. (APS) is a financial services and insurance firm headquartered in Austin, Texas. The company provides medical malpractice insurance for doctors, and brokerage and investment services to institutions and high net worth individuals. The company operates through multiple wholly owned subsidiaries.

On April 1, 2007, APS completed the acquisition of American Physician Insurance Company (API), for which it had acted as operations manager since the mid-1970s. API is a reciprocal insurance exchange, or co-insurer.

The company also completed a secondary public offering of stock on June 20, 2007. A portion of the proceeds has been assigned to expand API’s liability insurance underwriting capability. As a result, APS’ financial results were significantly improved for the short- and long-term.

Revenues for the three months ended June 30, 2007, were a record $30.0 million, up from $8.2 million a year earlier. Net earnings were $12.1 million for the most recent period, versus $0.6 million in 2006. Although these results do include an extraordinary gain of $2.3 million associated with the API acquisition, EPS is projected to be $3.38 for 2007, more than triple APS’ 2006 results.

52-week low / high: $1.27 / $2.15
Shares Outstanding:  19.66 million
Market Capitalization:  $34.0 million

NetSol Technologies, Inc. is an international IT and business consulting company serving the lease and finance, banking and financial services industries worldwide. The company operates from offices in China, Europe, East Asia and the United States. NetSol specializes in enterprise solutions; its chief products (and target industries) are LeaseSoft Suite (leasing and financing) and InBanking Suite (banking and other financial operations).

In the fiscal third quarter ended March 31, 2007, NetSol reported revenues of $7.6 million, up 51% from $5.0 million in the year-ago quarter. For the nine months ended in March, revenues were up 47% to $20.7 million, from $14.0 million. NetSol’s average gross margin the last three quarters was 50%.

Established in the United States in 1997, NetSol entered the Chinese and European markets during 2004/2005. In June 2006, NetSol acquired Burlingame, California-based McCue Systems Inc., a provider of lease and loan portfolio management software for banks, leasing companies and manufacturers.   The deal was for approximately $8.5 million.

On August 1, 2007, NetSol was awarded a contract for the development and implementation of a Motor Vehicle Registration System from the Province of Punjab, Pakistan which comprises 34 sub-districts.  Under terms of the agreement, the value of the deal will not be disclosed.

In July, NetSol announced the licensing and training of its premier product, LeaseSoft, to a major Hong Kong-based vehicle finance operator. The contract is estimated at over $1 million.