OILSANDS QUEST, INC. AKEENA SOLAR, INC

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Hello Readers,

Since the last Newsletter, we closed two positions; one for a nice gain and the other for an ugly loss.

ACHILLION PHARMACEUTICALS (10/5/08). Closed position 10/7/08 at $1.95 for a 62% GAIN.

LIPID SCIENCES (2/20/06). Closed position 10/3/08 at 30 cents for a 88% LOSS.

Every once in a blue moon it happens that a new pick is closed within days of its posting. There wasn’t any real news that we could see that propelled Achillion to reach our 50% plus target; we suspect that when we picked it that the stock was greatly oversold, which probably speaks true of many of our Current Positions. As for Lipid, it was kicked onto the Pink Sheets, so, it was definitely time to give it up.

It seems every time we write another Newsletter we report on another “first”, and this one is that for the first time in our twelve years of publishing all of our Current Positions are in the red, or pretty close to it. We need not explain why, unless you have been wandering around Nepal or Tibet for the last several weeks. Even though we are convinced that most of our picks are GROSSLY OVERSOLD, there could be more downside over the next month. Not even good news is helping. A company, right now, could have an increase of 300% in revenue and earnings and still see its stock tank. So, have a little, or a lot, more patience.

Here are the headlines since the last Newsletter about companies in the Current Portfolio. Dates in parentheses are when we first recommended them.

SCM Microsystems (SCMM) (10/5/08). Enters distribution pact with Hirsch Electronics. Introduces mobile, contactless, multi-application solution for secure access and payment transactions.

Lexicon Pharma (LXRX) (9/20/08). To present data for LX2931, an investigational new drug for rheumatoid arthritis.

Endeavour Silver (EXK) (9/5/08). Says production “jumps” as forecast in 3rdQT should be up 21% over 2ndQT; produces 625,924 oz. of silver.

Uranium Energy (UEC) (8/20/08). Makes progress with permitting at the Goliad ISR project and provides development update.

Digirad (DRAD) (8/20/08). To release quarterly results on October 23.

ICAgen (ICGN) (8/5/08). Initiates Phase II proof-of-concept trial in allergic asthma for Senicapoc potassium channel blocker.

U.S. Geothermal (HTM) (8/5/08). U.S. Department of Energy selects HTM’s Raft River site to demonstrate viability of enhanced geothermal systems with grant of up to $9 million.

Neurobiological Technologies (NTII) (7/5/08). Announces FDA agreement to consolidate Viprinex Phase 3 Trials accelerating time to pivotal data.

Microvision (MVIS) (5/20/08). Joins forces with Asia Optical to enable high-volume production of PicoP display engines and accessory Pico projectors.

GlobalScape (GSB) (5/20/08). Enhances channel distribution in the UK and Ireland. Names former Symantec VP as COO.

Ziopharm Oncology (ZIOP) (5/5/08). Receives Orphan Medicinal Product designation for Palifosfamide (ZIO-201) in treating of soft tissue Sarcoma.

ActivIdentity (ACTI) (3/5/08). Files patent infringement action against Intercede Group PLC.

Nanophase (NANX) (1/20/08). Announces new executive positions; strategic organizational realignment.

Hollywood Media (HOLL) (1/5/08). MovieTickets.com inks deal to become exclusive online ticketing partner for Southern Theatres.

Hollis-Eden Pharmaceuticals (HEPH) (12/20/07). Earnings release set for November 6. To present at BIO Investor Forum on October 30 and at the Rodman & Renshaw investment confab on November 10.

Amerityre (AMTY) (12/5/07). Says it is making inroads with light-weight environmentally friendly tire fill.

Santarus (SNTS) (11/20/07). Commences GLUMETZA promotion.

Linktone (LTON) (11/5/07). Sets annual shareholders meeting for November 14.

Nucryst Pharma (NCST) (10/5/07). Receives NASDAQ deficiency notice.

American Technology (ATCO) (10/5/07). Secures LRAD-RX U.S. military order for maritime security. To report record revenues for 4thQT and FY2008. Gets NASDAQ deficiency notice regarding bid price. Receives new LRAD orders from U.S. military.

XATA (XATA) (9/20/07). Names new chief technology officer as company expands application capabilities.

Wave Systems (WAVX) (9/5/07). Acer unveils line of business desktop PCs with Wave software.

SIGA Technologies (SIGA) (8/20/07). ST-246 named “Molecule of the Month” by Prous Science. To present at the Homeland Security Investor conference on October 22.

Radcom (RDCM) (7/20/07). Sets earnings call for October 27.

Alliance Fiber Optic (AFOP) (7/20/07). Earnings call set for October 22.

Pharmacyclics (PCYC) (6/20/07). BWS Financial upgrades stock to a “buy”.

Oncolytics Biotech (ONCY) (6/5/07). To present at several conferences. Completes initial scale up of manufacturing process for REOLYSIN to commercial sale. Is issued 29th U.S. patent.

Encorium Group (ENCO) (5/20/07). Announces stock buy back, which probably isn’t a wise use of money right now.

ECtel (ECTX) (5/5/07). Launches Integrated Revenue Management Alliance global social network to fight revenue leakage and fraud. To release 3rdQT results on November 5.

Ore Pharma (ORXE) (4/20/07). Begins clinical trial of GL1001.

UQM Technologies (UQM) (2/5/07). Introduces high voltage DC-to-AC inverter products. Proterra hybrid-electric transit bus powered by UQM Electric Propulsion System debuts at APTA Expo in San Diego.

Endologix (ELGX) (1/20/07). Receives buyout offer of $2.25 a share from Elliott Associates. To hold earnings call on October 23.

Neose Technologies (NTEC) (12/20/06). Being delisted from NASDAQ; may trade on either the Pink Sheet or the Bulletin Board. This is on the “Endangered List”.

CardioTech (CTE) (12/20/06). Changing its name and stock symbol to AdvanSource Biomaterials (AMEX: ASB) on October 16, the day we post this Newsletter.

Lantronix (LTRX) (12/5/06). To report quarterly results on October 26.

Advanced Life Sciences (ADLS) (7/20/06). Receives NASDAQ staff letter.

NTN Buzztime (NTN) (7/5/06). Reaches 10.7 million viewers; quantified using new Nielsen methodology.

The Inventure Group (SNAK) (3/5/06). Sets earnings results for October 22.

MIND C.T.I. (MNDO) (2/5/06). Earnings call set for November 11.

8×8 (EGHT) (1/20/06). Earnings news slated for October 30.

Westell (WSTL) (10/20/05). Sets earnings call for October 23.

RAE Systems (RAE) (10/5/05). Introduces MeshGuard wireless mesh radio gas detection for hydrogen sulfide and carbon monoxide.

Zi Corporation (ZICA) (8/5/05). Announces Motorola RAZR VE20 handset featuring ZICA’s Qix. This is on the “Endangered List”.

Nova Measuring (NVMI) (11/5/04). Schedules earnings results for November 5.

Network Engines (NENG) (6/5/04). Enters into worldwide solutions integration pact with Astute Networks. Viacom selects NEI appliance solution and logistics services to expand its portfolio and reach global markets. Several news releases on products. Stock downgraded by Cantor Fitzgerald.

Our picks for this Newsletter are two energy stocks, one trades on the AMEX and the other on the NASDAQ. With the price of crude dropping, this may be a good time to buy this sector.

OILSANDS QUEST, INC. (AMEX: BQI) – $1.48. Twelve-month hi-low has been $6.95 – $1.01. Based in Calgary, Alberta, Canada, with about 25 employees, this mining company has 228.7 million shares outstanding, $81.76 million in total current assets, $677 million in total assets, little debt, and $143.45 million in total liabilities. Institutional ownership is around 17%. One analyst rates the stock a “strong buy”. www.oilsandsquest.com

Most Americans believe that most of our “foreign” oil imports come from the Middle East. Nope. Try Canada, and much of that oil comes from oil sands. So, why not take a shot with a company by that name, Oilsands Quest, Inc., that has a good balance sheet and what may be some very promising properties. Yes, the shares outstanding are more than we would like them to be, but this could be an exception, particularly if crude gets back to $150.

Founded in 1998, and public for just over seven years, and formerly known as CanWest Petroleum, Oilsands Quest explores and develops oil sands deposits in the Alberta and Saskatchewan provinces of Canada. Since 2004, the company has assembled what it claims to be the largest contiguous land position in the industry of 730,000 acres in the those provinces; in 30 months, has drilled 349 exploration and delineation holes, and shot 1850 km of 2-D and 3-D seismic on Saskatchewan and Alberta; identified over five development prospects with world-scale production potential; declared two discoveries – Axe Lake in Saskatchewan and Raven Ridge in Alberta – and identified a third area of interest at Wallace Creek, on the Alberta side of the contiguous lands; initiated plans for reservoir testing at the Axe Lake discovery, with steam injection at Test Site 1 expected to begin by the end of this year.

BQI has initiated activities to advance joint venture and capital market partnerships. In addition to its contiguous oil sands lands in Saskatchewan and Alberta, the company holds an oil sands lease northwest of Fort McMurrary, Alberta – the Eagles Nest Prospect – as well as extensive oil shale permits in the Pasquia Hills in east-central Saskatchewan.

In a tight credit market, Oilsands Quest doesn’t appear to have problems raising money. At the end of September, it announced over-subscription of a flow-through private placement expected to result in aggregate gross proceeds of around $40 million. This was in addition to a previous non-brokered private placement of gross proceeds of up to $23 million.

To date, BQI has had zero income and a lot of losses due mostly to acquiring claims and other property. For example, in the FY ending 4/30/08, net losses were nearly $99 million.

As we said, this is a play based on the idea that oil isn’t going down much more and that the commodity has a tremendous upside.

Our 24-month target for the stock is $2.50 to $3.00.

For more information, contact BQI at 403-263-1623.

AKEENA SOLAR, INC. (NASDAQ: AKNS) – $2.27. Twelve-month hi-low has been $16.80 – $1.90. Located in Los Gastos, CA, with about 200 employees, this alternative energy company has 28.8 million shares outstanding, $37.1 million in total current assets, $39.6 million in total assets, little debt, and $10.65 million in total liabilities. Institutional ownership is around 15%. One analyst gives the stock a “moderate buy” and two have it as a “hold”. www.akeena.net

Yes, another energy play. Why? This seems like the time to do it, when energy prices have fallen because we all are 95% certain that they’ll go back up to nearly their old highs. While crude rose, solar stocks had a pretty good run earlier this year and Akeena Solar, Inc. was pretty much in that mix. Even so, the company has a pretty good balance sheet, and, yes, we know CNBC’s Cramer isn’t high on the company.

Founded in 2001, and public for just over two years, Akeena, simply put, designs and installs solar power systems for residential and commercial customers. It focuses on designing and integrating gird-tied solar power systems, which are electrically connected to the utility grid so that excess energy produced during the day flows backwards through the utility’s electric meter. It sources components, such as solar panels and inverters, from manufacturers such as Fronius, Kyocera, Sharp, SunPower, and Suntech.

Presently, Akeena is focusing on installations in California, New York, New Jersey and Connecticut. It boasts of 1200 satisfied customers. At the end of September it completed the largest solar powered tea factory on Earth with over 1450 solar panels to power the 70,000 plant and headquarters.

For FY2007, ending 12/31/07, revenue was $32.2 million with $11 million in losses. During the first six months of the current FY, ending 6/30/08, revenue was $19.3 million with $9.7 million in losses. The company expects to grow revenue for 2008 between 30% to 40% over 2007 and expects to achieve cash breakeven in the second half of 2009 assuming passage of the ITC, which is basically a bunch of tax breaks for using alternative energy.

Akeena trades at the upper end of our spectrum, or close to $5, but solar stocks have been very fluid and we expect that to continue for a while.

Our 24-month target for the stock is $4.00 to $4.50.

For more information, contact AKNS at 888-253-3628; info@akeena.com

Look for the November 5, 2008 Newsletter to be posted on 11/3 or 11/4.

Thank you,
George