American Scientific Resources Inc. (OTC PK: ASFX)

American Scientific Resources Inc. (ASFX) engages in the acquisition of medical product lines and health care supplements that are successfully sold overseas, and introduce these products in North America. Its products include Heart Smart Foundation Formula, Kidz-Med Thermofocus 5-in-1, Ultrasonic Nebulizer, ScaldSafe Bath Thermometer, Children’s Chewable 100% All Natural Multi Vitamin, Medicine Dispenser, Whistle Watch^TM, Mommy Recorder, Dr. Bip’s New Baby Tips DVD, A Hospital Trip with Dr. Bip DVD and Wee Target.

Its wholly owned subsidiaries include Kidz-Med Inc. and Heart Smart Systems. Additionally, the Company offers a patient-operated blood-sampling device called Autolet, which monitors blood glucose levels. The Company’s distribution network includes retail pharmacies, medical suppliers, infomercials and the Internet.

The Company is headquartered in Weston, Florida.

Source: Reuters.com, SEC Filings.

Financial Summary

Source: Reuters.com, SEC Filings.

Analyst Consensus

No analyst rates shares of ASFX at this time.

Investment Highlights

Medical Device Market & Trend

The United States and Europe are the two largest markets of medical devices, with the United States ranking No. 1 at approximately $80 billion in 2005, according to research firm, Themedica.

Demographics of the U.S. and Europe reveal that approximately 25,000 individuals will turn 60 years old each day for the next 20 years. As the population of aged individuals grows, the demand for small medical devices is expected to be grow as well. Socialized medical systems of Europe and the present third-party payer system of Medicare will provide the industry financial stability over the long term.

A recent survey released in the first quarter of 2009 showed that 56% of medical device makers intend to increase spending through the next 12 months, 20% expect no change in procurements. Nearly one in three buyers of medical devices is actively seeking partnerships with suppliers to reduce costs and to stretch working capital.

Competition within the industry is rising, with more multinational companies expanding into each significant market throughout the world. Multinational market penetration, mergers, joint ventures and acquisitions are expected to increase over time. Larger device makers are exploring smaller developing markets to fund future growth in anticipation of rapid growth in the emerging market space. The recent announcement on September 28 that Aspect Medical Systems (NASDAQ: ASPM) accepted a tender offer of $210 million by Irish health care tech company Covidien is the most recent example of the expected trend toward M&A activity in the sector.

Company’s Thermofocus(TM) Product

The Company’s products are established money-makers, including Thermofocus, its lead product that has been proved to be as accurate as ear and rectal thermometers. The Thermofocus is state-of-the-art technology designed to record accurate temperatures without touching the skin. This seemingly negligible benefit provides an important feature to parents who can now monitor their sleeping children without awakening them. The Thermofocus can also gauge the temperature of baby formula and other inanimate objects.

The Disintegrator and Disintegrator Plus Products

On September 14, the Company announced the purchase of the intellectual property rights to the Disintegrator and Disintegrator Plus, the only Food and Drug Administrator (FDA) approved needle destruction device for home use, as well as approved by the Environmental Protection agency (EPA) and American Diabetes Association.

Except within the European Union, the rights for the Disintegrator and Disintegrator Plus were acquired from Safeguard Medical Technologies, including current contracts, future sales, and further development of the device.

In a news release, the Company stated it plans to launch the Disintegrator and Disintegrator Plus during the fourth quarter of 2009. By the close of 2009, the Company plans to ramp production to more than 25,000 units each month.

The Company also announced the appointment of Safeguard’s chief executive officer Jason Roth to senior vice president and director of Business Development of the Company. Roth brings to the Company experience of launching multinational brands, which generated more than $300 million worldwide.

Technical Analysis

Source: http://stockcharts.com/h-sc/ui?s=ASFX

ASFX trades above its 13-day moving average. This bullish sign is significant because the 13-day moving average is sloped upwardly as well.

The MACD for ASFX currently indicates a bullish signal. The MACD is above the signal line, a 9-day moving average of the MACD. The MACD is, however, below the critical level of 0, which implies the past price action had been negative. Overall, the chart is bullish.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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