Dallas, TX 12/18/2007 9:34:44 AM
News / Finance

OTCPicks.com Stocks to Watch for Tuesday, December 18th STIY, MOSH, XSNX, CFUL, DLAV, DLPX

Our Stocks to Watch for Tuesday include Stinger Systems, Inc. (OTCBB: STIY), Mesa Offshore Trust (OTC: MOSH), XSunX Inc. (OTCBB: XSNX), Continental Fuels, Inc. (OTCBB: CFUL), DealerAdvance, Inc. (OTCBB: DLAV) and Delphax Technologies Inc. (NASD: DLPX).

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STINGER SYSTEMS INCORPORATED (OTCBB: STIY)
"Up 133.33% on Monday"

Detailed Quote: http://www.otcpicks.com/quotes/STIY.php

Stinger Systems, Inc. engages in manufacturing and marketing electronic restraint products to law enforcement, correctional, professional security, and military sectors. It produces and sells electronic stun devices for the control of, and to provide temporary incapacitation of, dangerous persons. The company markets S-200, a two-dart electronic projectile stun device, and TruVu camera, which offers the option of video and voice capture. The company's control products include Ice Shield, an electrified riot shield; Bandit, a remote controlled or movement controlled electrified wrap used for controlling dangerous detainees in public situations or during transport; and Ultron, a handheld contact stun device used to temporarily incapacitate dangerous individuals. The company was founded as United Consulting Corporation in 1996 and changed its name to Stinger Systems, Inc. in 2004. Stinger Systems, Inc. is based in Tampa, Florida.

STIY News:

December 17 - Medical Study of Stinger S-200 Stun Gun Completed

Study confirms cardiac safety

Stinger Systems, Inc. (OTCBB: STIY), a leader in electro-stun technology, announced a major research university has completed a comprehensive cardiac study of the Stinger Systems' S-200 projectile stun gun. Details of the study are being withheld pending publication at a scientific meeting and/or in a scientific journal. However, this study confirmed the cardiac safety of the S- 200, which had previously been documented in internal safety testing. Stinger Systems' stun products have been used since 2000. Thousands of applications have occurred and, to date, the Company has had no reported injuries or adverse health effects using its products including during training. Additional medical studies of the S-200, including direct comparisons to the Taser M26 and Taser X26 are currently underway.

Stinger Systems, Inc. intends to introduce the study for acceptance into evidence at trial of its federal case against Taser International, Inc. (NASD: TASR) for false advertising/unfair competition, that is United States District Court for the District of Arizona case CV-07-0042-PHX-MHM.

MESA OFFSHORE TRUST (OTCBB: MOSH)
"Up 65.00% on Monday"

Detailed Quote: http://www.otcpicks.com/quotes/MOSH.php

Mesa Offshore Trust operates as a trust company in the United States. Its principal assets consist of a 99.99% interest in the Mesa Offshore Royalty Partnership, which holds a net overriding royalty interest in 10 producing and nonproducing oil and gas oil and gas leases offshore Louisiana and Texas. The trust is entitled to its share of 90% of the net proceeds, realized from the sale of the hydrocarbons produced from the properties. Mesa Offshore Trust was founded in 1982 and is based in Austin, Texas.

MOSH News:

December 13 - Mesa Offshore Trust Announces Proposed Settlement Agreement, Including Resignation of Trustee and Appointment of Temporary Trustee

Mesa Offshore Trust (OTC: MOSH) (the "Trust") announced that on December 3, 2007, JPMorgan Chase Bank, N.A., for itself and in its capacity as Trustee of the Trust, entered into a Settlement Agreement and Release in connection with the lawsuit filed by MOSH Holding, L.P. ("MHLP") against Pioneer Natural Resources Company; Pioneer Natural Resources USA, Inc. (collectively, "Pioneer"); Woodside Energy (USA) Inc. ("Woodside"); and JPMorgan Chase Bank, N.A., as Trustee of the Trust (the "Lawsuit"), with MHLP, Dagger-Spine Hedgehog Corporation ("Dagger-Spine") and another group of unitholders, led by Keith A. Wiegand (together with Dagger-Spine, the "Intervenors"), and additional Unitholders in the Trust (collectively, "Plaintiffs") (as amended on December 7, 2007, the "Settlement Agreement").

The Settlement Agreement provides for the following:

If the Settlement Agreement is approved by the 334th Judicial District of Harris County, Texas (the "Court"), JPMorgan Chase Bank, N.A. shall: (1) formally resign as Trustee of the Trust effective January 21, 2008, or such earlier date as authorized or approved by the Court; and (2) pay to the Plaintiffs, and not to the Trust for the benefit of all Unitholders, $1,250,000 to reimburse Plaintiffs for legal fees and expenses incurred in connection with the pursuit of claims for the benefit of the Trust within 31 days after the Court enters an order approving the Settlement Agreement.

Plaintiffs in the Lawsuit shall request the Court to appoint a successor or temporary trustee, who shall determine whether to pursue the remaining claims in the Lawsuit against Pioneer and Woodside, for the benefit of all Unitholders. The decision whether or not to pursue such claims shall be entirely within the discretion of the successor or temporary trustee.

JPMorgan Chase Bank, N.A., individually and as lender, previously created a $3,000,000 Demand Promissory Note on September 28, 2007, with the Trust as borrower, for use by the Trustee to pay Trust expenses, under commercial terms and secured by the Trust's assets. In addition, on December 3, 2007, JPMorgan Chase Bank, N.A., individually and as lender, has entered into an Amended and Restated Promissory Note (the "Amended and Restated Note"), with the Trust as borrower, to amend the Demand Promissory Note to provide for, among other provisions, an extension of the stated maturity date of the Loans made pursuant to the Demand Promissory Note and the Amended and Restated Note from December 31, 2007 until the earlier of (1) December 31, 2009, (2) 31 days after the Trust's receipt of any settlement proceeds, recovery or judgment in connection with the Lawsuit, (3) final liquidation of the Trust's assets, or (4) if the Settlement Agreement is not approved by the Court. JPMorgan Chase Bank, N.A., in connection with the Settlement Agreement, has committed that at least $800,000 will remain in available funds as of the date of its proposed resignation that could be borrowed by the Trust under the terms of the Amended and Restated Note, so that the Trust can pay operating expenses in the future. Up to a maximum of $2,200,000 in loaned funds may have been consumed as of the date of JPMorgan's resignation as Trustee, to pay operating expenses of the Trust, including the Trustee's legal fees and costs in defending against the Lawsuit.

Plaintiffs shall release JPMorgan Chase Bank, N.A., individually and as Trustee of the Trust, and all claims against JPMorgan Chase Bank, N.A. shall be dismissed with prejudice.

The proposed settlement is expressly conditioned on approval by the Court, with an order that may be binding on all Unitholders of the Trust, that specifically (1) approves the settlement, (2) finds that the settlement is in the best interest of the Trust and its Unitholders/beneficiaries, (3) accepts the Trustee's resignation, and (4) dismisses the Lawsuit against the Trustee and JPMorgan Chase Bank, N.A. individually with prejudice as to all claims that were or could have been brought against them by the Plaintiffs directly or on behalf of the Trust. Furthermore, the proposed order would release the Trustee from any liability to the Trust or the Trust's beneficiaries for any claims arising from its agreement to and performance of the Settlement Agreement.

Because the Settlement Agreement is subject to approval by the Court, the Trustee and the Plaintiffs in the Lawsuit filed a Joint Motion for Approval of Settlement Agreement on December 3, 2007 and a Supplement to Joint Motion for Approval of Settlement Agreement on December 11, 2007.

The Trustee is providing notice to all unitholders of record of JPMorgan's Chase Bank, N.A.'s intention to resign as Trustee, the application by the Plaintiffs in the lawsuit to appoint a temporary trustee, the conditional Settlement Agreement, and the hearing to approve the agreement, which the Court scheduled for January 16, 2008 at 9:00 a.m. Interested Unitholders may attend the hearing on January 16, 2008, and the Court is willing to entertain any written objections to these proposed actions if the written objections are received by the Court on or before January 17, 2007. The notice, which is also being filed as an exhibit to a Form 8-K filed by the Trust with the SEC and is available at http://www.sec.gov/, contains additional information about how to obtain copies of certain pleadings in the Lawsuit that relate to the Settlement Agreement and about the objections that Pioneer and Woodside have to the Settlement Agreement and the Plaintiffs' application for the appointment of a temporary trustee. Pioneer and Woodside believe that the Trustee's resignation, the appointment of a temporary trustee, and the proposed settlement violate the terms of the Trust Indenture and benefit the proponents rather than the Trust and all Unitholders. The Trustee believes that the Settlement Agreement is in the best interests of the Trust and the Unitholders, and that it has an absolute right to resign under the Trust Indenture "with or without cause, at any time."

XSUNX INCORPORATED (OTCBB: XSNX)
"Up 63.48% on Monday"

Detailed Quote: http://www.otcpicks.com/quotes/XSNX.php

XsunX, Inc. engages in the development, commercialization, and licensing of proprietary solar cell designs and core solar cell manufacturing systems. The company's designs and manufacturing systems enables licensees to manufacture advanced thin film solar devices on various substrates. It focuses on two primary solar cell device types for production that include Power Glass, for semi-transparent and opaque applications on both flexible and rigid substrates; and Hybrid 4-Terminal, for opaque applications rivaling silicon wafer efficiencies. The company primarily serves original equipment manufacturers in the thin film solar products market. It has a strategic alliance with MVSystems, Inc. The company, formerly known as Sun River Mining, Inc., was incorporated in 1997 and changed its name to XsunX, Inc. in 2003. XsunX is based in Aliso Viejo, California.

XSNX News:

December 17 - XSunX Inc. Rated 'Speculative Buy' Target Price $1.50 by Beacon Equity Research

XSunX Inc. (OTCBB: XSNX) has been rated a Speculative Buy with a price target of $1.50 by Beacon Equity Research Analyst, Lisa Springer, CFA.

The full report is available at http://www.beaconequityresearch.com/.

In the report, the analyst writes, "XsunX, Inc. was created in 2003 to develop and commercialize advanced, thin-film photovoltaic (TFPV) solar cell technologies and manufacturing processes. Over the past year, the Company has shifted its focus from licensing its technologies to using its technologies to design cutting-edge manufacturing systems for producing and marketing thin-film amorphous solar modules. The Company owns three patented technologies relating to photovoltaic technology design, manufacturing processes, and technology development. The Company has begun work on a multi-megawatt solar module production facility in the US."

CONTINENTAL FUELS (OTCBB: CFUL)
"Up 44.12% on Monday"

Detailed Quote: http://www.otcpicks.com/quotes/CFUL.php

Continental Fuels, Inc., through its subsidiaries, engages in purchasing, selling, storing, blending, and transporting petroleum products in the United States and internationally. The company owns a petroleum storage and terminal facility in the Port of Brownsville, Texas. The Brownsville terminal facility receives condensate that would be used in the blending of gasoline or sold into the U.S. market. The terminal includes truck and rail on and off loading terminals, and handles barges and tankers up to the Suez-max size. The company is based in San Antonio, Texas. Continental Fuels, Inc. is a subsidiary of Universal Property Development and Acquisition Corporation.

CFUL News:

December 17 - Continental Fuels Completes Acquisition of Geer Tank Trucks - North Texas Oil Purchasing Company - Gains Access to Crude Contracts and Pipelines - Immediate Additional Revenue

With conventional financing provided by Sheridan Asset Management, LLC of New York, Continental Fuels, Inc. (OTCBB: CFUL) (FWB: CIQB) has completed the purchase of all of the outstanding stock of Geer Tank Trucks, Inc. (http://www.geertanktrucks.com/), a crude oil purchasing company founded in 1945 with five locations in North Texas and nearly $50 million in annual revenue. In this single transaction in which Geer becomes a wholly owned subsidiary of Continental, Continental has completed the next phase of its business plan by securing a consistent supply of crude oil, all of the equipment necessary to transport and process that crude and access to major crude oil pipelines to efficiently deliver the crude to market.

The transaction is the second major acquisition completed by Continental during the year. In April, Continental acquired the Brownsville Port Facility (http://www.portofbrownsville.com/) and light crude trading business of Universal Property Development and Acquisition Corporation (OTCBB: UPDA) (FWB: UP1) (www.universalpropertydevelopment.com) in a transaction that resulted in UPDA acquiring a controlling interest in Continental. Since that time, Continental has expanded the storage capacity of its port facility and established significant contracts for the sale and delivery of light crude condensate originating from that facility.

In addition to financing this purchase, Sheridan has also committed a $3 million working capital credit facility to finance Continental's operations at Geer and the port.

The Geer acquisition includes 4 pipeline terminals with connections to major pipeline companies such as Colonial, Teppco and Plains and 5 service yards in various locations throughout North Texas, more than twenty 200 bbl transports, 50 frac tanks, water hauling and disposal facilities incorporating 2 commercial salt water disposal wells and other assets and equipment invaluable to Continental's continuing development of its business model.

"Completing this acquisition represents another leap forward in the development of our business," remarked Continental CEO Tim Brink. "While the revenue it brings is very important, the incredible opportunities it presents cannot be overstated. The assets and business of this company correspond perfectly with the plans we have developed. In the time we have been working with the Geer management, much of which will remain intact, we have identified several additional sources of revenue and opportunities for growth and negotiated significant increases in sales margins. Continental will now have port facilities and contracts for the purchase, storage, sale and delivery of light crude in South Texas and sources, facilities and equipment to transport and deliver and contracts to purchase and sell crude in North Texas."

DEALERADVANCE (OTCBB: DLAV)
"Up 38.78% on Monday"

Detailed Quote: http://www.otcpicks.com/quotes/DLAV.php

DealerAdvance, Inc. engages in the sale, marketing, and installation of a Web-based application software and database systems that manages the auto dealer-client relationship. The company offers WebDA that allows automobile dealers to capture a customer's contact and vehicle information, purchasing requirements, and gives dealership personnel the ability to search inventory in their DMS inventory systems. This search feature can be used to search inventory at multiple locations, and enables dealership personnel to locate an appropriate vehicle in stock and print out the necessary forms to complete the purchase or lease deal. The company was founded in 2000 and is based in Addison, Texas.

DLAV News:

December 17 - New Dealer Contracts Bolster Revenue for DealerAdvance

DealerAdvance(tm), Inc. (OTCBB: DLAV), announced that the company has converted three DealerAdvance(tm) clients to its new and growing WebDA(tm) product.

Steven Humphries, DealerAdvance CEO said, "Our primary goal over the past several months has been to open new dealers and convert our older dealers whose contracts had or were expiring to our new WebDA product. We are pleased to announce that long-time customers Gresham Ford (Gresham, OR), Pierre Dodge (Seattle, WA) and Palmetto Nissan (Florence, SC), all whose contracts had expired, have signed new contracts to move over to WebDA(tm). Each contract provides a growing and long term revenue flow for the company."

Gresham Ford General Manager Bess Wills commented, "We've been with DealerAdvance from the beginning and are very excited about moving over to the new WebDA product. Our sales people and sales management like the product due to it being so user-friendly."



VP of Sales Dave Scaturro said, "It's all about customer retention and customer satisfaction. Our goal is to have happy customers that will do business with the company for years and years. Gresham Ford, Pierre Dodge and Palmetto Nissan have been long customers of the company and we are pleased to have them continue with our new product."

WebDA(tm) is the newest iteration of DLAV's "CRM" application. The system is also offers the Nokia 800 hand-held devise that is web based and is available at a fraction of the cost of the original DLAV system. The original server based system is now being replaced in the almost 100 dealerships previously being served. According to Humphries dealers that have utilized the original DealerAdvance(tm) system have shown a 90% increased in captured customer data and a 30% increase in appointment setting. "It's all about sales," says Humphries, "theirs and ours."

For additional information and a demo, contact company VP of Sales Dave Scaturro at (214) 866-0606, ext. 103.

DELPHAX TECHNOLOGIES (NASD: DLPX)
"Up 31.91% on Monday"

Detailed Quote: http://www.otcpicks.com/quotes/DLPX.php

Delphax Technologies Inc. is a global leader in the design, manufacture and delivery of advanced digital print production systems based on its patented electron-beam imaging (EBI) technology. Delphax digital presses deliver industry-leading throughput for both roll-fed and cut-sheet printing environments. These flagship products are extremely versatile and handle a wide range of substrates from ultra lightweight paper to heavy stock. Delphax provides digital printing solutions to publishers, direct mailers and other printers that require systems capable of supporting a wide range of commercial printing applications. The company also licenses and manufactures EBI technology for OEM partners that create differentiated product solutions for additional markets. There are currently installations using Delphax EBI technology in more than 50 countries worldwide. The company is headquartered in Minneapolis, with subsidiary offices in Canada, the United Kingdom and France. Its common stock is publicly traded on the Capital Market tier of the NASDAQ Stock Market under the symbol: DLPX. Additional information is available on the company's website at http://www.delphax.com/.

DLPX News:

December 17 - Delphax Technologies Announces Results for Fiscal 2007 Fourth Quarter and Full Year

Company reports recovery from large operating losses of fiscal 2006, shipment of CR Series press after year-end

Delphax Technologies Inc. (NASD: DLPX), a global provider of high-speed digital printing systems, reported net sales of $10.9 million for its fourth fiscal quarter ended Sept. 30, 2007, compared with $11.8 million for the fourth quarter of fiscal 2006. Fourth-quarter operating income was $14,000 in fiscal 2007, compared with an operating loss of $5.1 million a year earlier. The fiscal 2007 fourth-quarter net loss was $401,000, or $0.06 per share, compared with a net loss of $5.7 million, or $0.89 per share, for the fourth quarter of fiscal 2006.

For the fiscal year ended Sept. 30, 2007, net sales were $44.6 million, compared with $48.7 million for fiscal 2006. Fiscal 2007 operating income was $621,000 vs. an operating loss of $7.8 million for fiscal 2006. The net loss was cut to $788,000, or $0.12 per share, from a loss of $9.6 million, or $1.51 per share, for fiscal 2006.

"As these results indicate, we have made substantial progress on our turnaround plans," said Dieter Schilling, president and chief executive officer. "During fiscal 2007, we returned a restructured and leaner Delphax to operating profitability, hired several experienced sales professionals to strengthen our North American sales team, and secured the necessary capital resources to continue as a viable and strong technology partner for the print industry. Our refinancing was not completed until late in the fiscal year, but we believe we have moved into the new fiscal year with everything in place to generate the system sales that are essential to achieving our sales objectives for our CR Series presses.

"The restructuring of our business - a process that contributed to our losses in fiscal 2006 - made it possible to show a profit from operations in every quarter of fiscal 2007. Our enhanced sales effort is now fully deployed, and our long-term financing arrangements give us the immediate capital resources needed to fuel our strategy for getting Delphax on track for sales growth.

"Our objective is not without challenges, as we work to increase our share of the commercial print market with the CR Series presses. During fiscal 2007, without the benefit of significant sales of high-volume CR Series and Imaggia presses, we experienced a decline in service-related revenue from the mature and legacy portion of our installed base. Ultimately, we believe, the balance will swing strongly the other way as sales and usage of the CR Series grow.

"We are pleased to report the shipment of a CR Series press after year-end. This press is for publishing applications in the UK and recently went into service. Under the terms of the sales arrangement with this new customer, the transaction will be eligible for revenue recognition in the fourth quarter of fiscal 2008."

Fourth-quarter service-related revenues - sales of maintenance, spares and supplies - were $10.3 million, down from $11.2 million for the fourth quarter of fiscal 2006. Equipment sales improved to $617,000 for the fiscal 2007 fourth quarter from $538,000 a year earlier, and sequentially from $366,000 for the third fiscal 2007 quarter.

Gross margin for the fourth quarter of fiscal 2007 totaled $2.8 million, compared with $861,000 for the fourth quarter of fiscal 2006. The gross margin rate for the fiscal 2007 fourth quarter was 26 percent vs. 7 percent for the same quarter last year. For fiscal 2007, gross margin was $12.8 million, compared with $11.4 million for fiscal 2006. The gross margin rate for fiscal 2007 was 29 percent, compared with 23 percent last year.

Operating expenses for the fiscal 2007 fourth quarter decreased 53 percent to $2.8 million from $6.0 million for the fiscal 2006 fourth quarter, a period in which expenses included severance costs resulting from a workforce reduction. For fiscal 2007, operating expenses were $12.1 million, compared with $19.2 million for fiscal 2006, a decrease of 37 percent.

"During the last half of fiscal 2007, we experienced additional costs in both manufacturing and operating expenses due to the weakening U.S. dollar against the Canadian dollar," said Schilling. "For the first two quarters of fiscal 2007, the Canadian dollar averaged approximately $0.87 per US dollar, but increased to over $1.00 by our year-end of Sept. 30, 2007, an increase of over 15 percent. This increased the company's manufacturing and operating costs by over $500,000 for the last two quarters of fiscal 2007, compared with what they would have been had the exchange rate between the U.S. and Canadian dollar remained the same as the first two quarters of the fiscal year."

Also during fiscal 2007, the company announced a five-year $7.0 million dollar financing with an affiliate of Whitebox Advisors LLC. After paying off an existing subordinated promissory note of $3.0 million, the company netted $4.0 million in cash to be used primarily for general working capital. In addition, Delphax and its Canadian subsidiary closed on new senior credit facilities totaling $13.7 million with Wells Fargo Business Credit (an operating division of Wells Fargo Bank, N.A.) and Wells Fargo Financial Corporation Canada. The new credit facilities have a four-year term and consist of secured revolving credit facilities of up to $13.0 million, subject to availability under a borrowing base of accounts receivable and inventory, and a secured term loan of $653,000. As of September 30, 2007, the company had borrowing availability of $5.9 million under the revolving credit facilities.

"Our CR Series presses have proven themselves in a variety of demanding applications-performance that has been rewarded with repeat purchases by existing customers," Schilling said. "With the completion of our financing arrangements and our increased investment in sales staffing, we believe we will begin to see a positive turn in our equipment sales within those segments of the market where we can demonstrate clear-cut advantages in productivity.

"Lastly, we are proud to announce the achievement of 10 billion feet of Imaggia press production. The Imaggia digital press is our premier sheet-fed digital press that utilizes state-of-the art digital, non-impact technology designed for the check printing industry. We appreciate our customers' support and salute the Imaggia press customers for achievement of this milestone, particularly Harland Clarke(TM) of San Antonio, Texas and Davis + Henderson of Toronto, Ontario."

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