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Dutton Associates updates its coverage of Clearant Inc. (OTCBB:CLRI) maintaining its rating at Neutral and no target price. The 10-page report by Dutton senior analyst Sally H. Wallick, CFA is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals. Clearant’s third quarter results were highlighted by an 32% year-over-year increase in licensing fee revenue and a $76,000 revenue contribution from the direct distribution of 52 CLEARANT PROCESS sterile implants to surgeons, hospitals and clinics in some large markets. The third quarter was the first full quarter since the Company’s new direct distribution strategy was initiated in late June. Total revenue came in ahead of our estimate. The Company’s third quarter net loss was $0.07 per share, in line with last year’s $0.07 per share loss. We are maintaining our full-year 2006 loss estimate for Clearant of $0.25 per share, down from a $0.47 per share loss in 2005. As of November 3, 2006, Clearant had approximately $1.4 million in cash. In light of Clearant’s dwindling cash balance, we believe that it is imperative that the Company raise additional capital before year-end. There is no certainty that it will be able to do so on favorable terms, if at all. Therefore, despite the initial success and apparent future promise of Clearant’s direct distribution strategy, we believe that the Company faces significant near-term financial risk if it is unable to raise needed funds. It has hired an investment bank and is aggressively pursuing financing alternatives. However, in light of this financial risk, we rate the Company’s shares Neutral. About Dutton Associates Dutton Associates is one of the largest independent investment research firms in the U.S. Its 31 senior analysts are primarily CFAs and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors. The cost of enrollment in our one-year continuing research program is US $39,500 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $63,000 from the Company for 8 Research Reports with coverage commencing on 8/05/2005. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note.
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