Dow Jones 11199.93 +74.20 1:40 pm PDT, August 2, 2006 NASDAQ 2078.81 +16.82 For info, visit access.smallcapnetwork.com S & P 500 1278.55 +7.63 Change your subscription status here Russell 2000 696.81 +6.92 VOLUME 06: ISSUE 59 Now That's An Improvement The writing was on the wall, so to speak. For weeks now, we've seen constant announcements from Commerce Planet (OTCBB: CPNE) about record-breaking enrollments and a very effective debt reduction plan. So, we weren't surprised a few moments ago when Commerce Planet released their second quarter results. In simplest terms, sales and earnings were just absolutely outstanding. In fact, in true 'Commerce Planet form', they were again record-breaking...to say the least. Although we love to draw out a great story as much as anybody, let's just get right to the good stuff - the dollars. For the quarter ending on June 30th, 2006, Commerce Planet reported revenue of $7,086,818. That's (drum roll please) an improvement of 460% over the same quarter last year. Profits for their fiscal second quarter totaled $1,460,117, easily topping the Q2 2005 loss of $1,968,382. Like we said, it's just outstanding, and bordering on being unbelievable. Yet, those results may not even provide enough perspective to do the company justice, since the real story is much bigger than the quarter - the best news is still the opportunity ahead. So of course, we're more than happy to provide some additional perspective for you. It was a good quarter, no doubt about it. Seven million dollars is a heck of a lot more revenue than the same quarter last year, or even the prior quarter (Q1 of 2006) when the company drove in sales of $3.3 million. However, that quarterly number also pretty much matches revenue for all of last year. That's right, Commerce Planet (then called NeWave) posted total sales of $7.3 million for all of 2005. As you saw, in Q2 of 2006 alone, they managed to do almost the same. Adding Q2's revenue figure to the Q1 revenue number brings the year-to-date total up to $10.4 million. As for profits, the magnitude of improvement is about the same, although a little tougher to define. In 2005 the company lost $6.2 million. It's not enviable, but you also have to keep in mind it's in the past; we're only concerned about what the company is going to do in the future. And, in terms of earnings trends, the profit figures confirm what we started to suspect when we saw Q1, 2006 results - Commerce Planet has truly turned the corner. In the first quarter of 2006, the company turned a profit of $194,380. Any gain is better than a loss, but those results didn't turn too many heads at the time. The thing is, they probably should have turned a few more heads, since it was a clue of where things were headed in Q2 of this year...to enormous sales and earnings figures (proving it pays to at least do a little homework). While congratulations are in order for Commerce Planet and CEO Michael Hill, the exciting part for us is still the opportunity for shareholders. Read on.   Lucky Coincidence, or Repeatable Results? OK, anybody can win the lottery once, right? If that's your question, we'd have to concede it's a valid one. However, Commerce Planet didn't just happen to have a fluke quarter...the business model doesn't even have room for unusual or skewed results. Commerce Planet drives revenue through recurring subscriptions to several websites, or by direct-selling services, products and supplies via the internet. At only a few dollars a month per subscriber, or with an average profit margin on competitively priced goods and services sold through one of its sites, it would be virtually impossible for the company to just wake up one morning and find a proverbial golden egg. No, the 'Planet' got its business the old-fashioned way - they earned it, one customer at a time (metaphorically speaking, as you'll see). On the other hand, to say 'one customer at a time' gives the wrong impression. Fact is, the company is converting all those single customers at a breath-taking pace. If you've been following Commerce Planet's story at all via our blog entries, you've already seen more than one 'new record enrollment' installment. In May, the company processed 46,000 new purchasing club members. At the time it was a new record, and a 10% increase over April's numbers. For all of Q2 this year, 125,000 new members were added - also a new quarterly record. Point being, no, the stellar results aren't luck. Moreover, they're repeatable. The business model is based on subscriptions and membership fees, which are usually recurring. And in cases where the revenue was non-recurring (product or service sales), there's no reason to think the Planet can't do it again. That's why we won't be a bit surprised to be singing these same praises about three months from now.   And It Could Have Been Even Better While this quarter's results were just huge, it's worth mentioning they could have been even better (although we're not being critical). Followers and fans of Commerce Planet will remember the company is paying down its debt left and right. Most recently, Commerce Planet settled up $775,000 in loans from a couple of individual investors as well as two institutions. And once again, they did it with cash from operations. Translation: They can actually afford to do it! That brings the year-to-date total of eliminated debt up to a nice $2.2 million. The $3 million or so in long-term debt the company was staring at in the beginning of the year has now been reduced to about 1/3 of the original total. That's great news, although it may be under-stated without doing a little math. The company's year-to-date earnings are roughly $1.5 million. Had the company decided to not work off its debt early, the earnings total could have possibly been doubled - or even better. Yet, Michael Hill didn't necessarily want to go the easy route...he wanted to go the right route. And for what it's worth, we agree with the decision. Any company willing and able to eliminate its debt is a company we have to respect. And, when the company pays its debts well ahead of the scheduled repayment plan, well, then you know they're doing something right. We've been following Commerce Planet for months, and it seems like they've made a habit of meeting - and beating - even our high expectations. That's the kind of company you want to invest in. Why? Since the beginning of time, the very best-performing companies (and their stocks) are the ones who put their destiny into their own hands, rather than the ones who have ongoing obligations to others. Commerce Planet is clearly the former. Just as a quick reminder, check out some of the recent debt-reduction actions Commerce Planet has initiated: June 28th, 2006 - paid off $705,000 in debentures May 31st, 2006 - paid off $550,000 in principal debentures April 27th, 2006 - paid off $277,314 in notes March 30th, 2006 - paid off $200,000 in principal notes March 1st, 2006 - paid off $301,248 in notes See the trend? It's pretty clear the company didn't just find some loose change under the couch cushion and figured they had to do something with it. No, there's more to the story than just a little extra cash. This is all part of a bigger plan to wipe virtually all the company's debt off the books by the end of the year, so the company can turn its entire focus on even stronger growth and profits. That's just fine with shareholders. And speaking of shares, just take a look at the nearby chart. What more can be said about it? As long as Commerce Planet keeps putting up the kind of earnings and sales we discussed, we don't have any reason to think this chart is going to change direction. Just for the record, we recommended Commerce Planet on March 22nd, when shares were 19 cents. They're now at 64 cents, up 236% from that entry point. And in terms of potential, it's just the tip of the iceberg. The press release...   Commerce Planet Posts Record Revenue & Net Income in 2nd Quarter; Profits Surge to $1.4 Million GOLETA, Calif., Aug 2, 2006-- Commerce Planet, Inc. (OTC Bulletin Board: CPNE) today announced record revenues and profits during the second quarter of 2006. Revenue for the quarter ended June 30, 2006 was $7,086,818 vs. $1,258,616 for the quarter ended June 30, 2005, a 460% increase. Net income during the quarter ended June 30, 2006 was $1,460,117 vs. a net loss of ($1,986,382) for the quarter ended June 30, 2005. The Company's complete financial results can be viewed in its Form 10-QSB filing for the quarter ended June 30, 2006. Commerce Planet CEO Michael Hill stated, "I am very pleased to report such outstanding performance to our shareholders. Clearly our momentum is continuing as sequentially from the first quarter our revenue more than doubled and our profits increased over 650%. In just six months of this year our $11 million in revenue and $1.6 million in net income, far exceeds our performance for all of 2005. Additionally, we recently announced year to date debt repayment of $2.2 million with cash flow from operations and with over $1.8 million in cash, the overall health of Commerce Planet has never been better." He added, "Our goal as we progress into the second half of 2006 is to increase both the breadth and depth of our offerings by continuing to introduce additional products and services which assimilate seamlessly into our model without disruption to our processes or bottom line. Given the continued robust outlook for online commerce, I believe we are positioned perfectly for further growth well into the foreseeable future." About Commerce Planet, Inc. Commerce Planet, Inc. through its websites 'commerceplanet.com', 'osimaging.com', 'onlinesupplier.com', 'buydiscount.com' and 'mysoftwaretutor.com', provides ecommerce solutions, printing, fulfillment, and thousands of high value products at significant savings to its online loyalty club customers and members. To find out more about Commerce Planet, Inc. (OTC Bulletin Board: CPNE - News), visit our website at www.commerceplanet.com. The Company's public financial information and filings can be viewed at www.sec.gov. Forward Looking Statements This release contains forward-looking statements, including, without limitation, statements concerning our business and possible or assumed future results of operations. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: our ability to continue as a going concern, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of our products and services or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law. Contact: Michael Novielli Chairman Commerce Planet, Inc. mnovielli@commerceplanet.com ph (845)575-6770   We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130 Ckrush's LiveMansion Movie Featured in New York Times The buzz continues to build about Ckrush's (OTCBB: CKRH) online film project 'LiveMansion: The Movie'. This time, the company's initiative is being highlighted in none other than the New York Times. Needless to say, that ain't bad exposure. To read the actual article in the online version of the N.Y. Times, click here. (It's free, although it could take a moment or two to load). Rather than rehash what you can read for yourself, we'll just add this thought...although the movie project was only announced a few days ago, it's done a pretty nice job of working its way into the mainstream media. We've now seen it mentioned in Variety and the New York Times, which leads us to wonder where the idea might pop up next. The 'bigger picture', though, is how what some regarded as a quirky little internet project has now garnered the attention of some major media outlets. Well, our answer to that is this - LiveMansion isn't a fluke, quirky, nor a mere curiosity. The concept is solid, and Ckrush hit the nail on the head. Trust us, the New York Times doesn't waste space or time on anything not news-worthy, which leads is back to our point we made a few days ago... Ckrush and LiveMansion are the real deal, and a real opportunity for shareholders.   Market Still Struggling With Resistance On Friday we mentioned the market was contending with some short-term resistance. The problems were verified Monday and Tuesday...with a dip. Today, the bulls answered pretty firmly, but it's worth noting - despite the gains - the indices still really didn't break past resistance. As a reminder, the resistance lines we're watching for each index are: S&P 500: 1280 NASDAQ: 2100 Dow Jones Avg: 11,225 Subscribe Information is power and timely information is profitable. Become informed and profit from SmallCapDigest Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the SmallCapDigest Email Newsletter on a regular basis. To ensure newsletter delivery, you can add any additional email addresses you may have to the SmallCapDigest Member List. Receiving the SmallCapDigest Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the SmallCapDigest recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery. 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Moreover, as detailed below, TGR accepts compensation from third party consultants and/or companies, which it features in the publication and circulation of SCD. To the degrees enumerated herein, SCD should not be regarded as an independent publication. Click Here or go to http://access.smallcapnetwork.com/compensation_disclosure.html to view our compensation on every company we have ever covered, or visit the following web address: http://www.smallnetwork.net/profile_disclosure.html for our full profiles and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts. TGR Group LLC has been paid a fee of $60,000 by Commerce Planet for coverage of the company. In addition, one of the principles of TGR Group LLC is also a principle of MarketByte LLC. In a separate contractual relationship in 2004, MarketByte LLC was paid a fee of $25,000 in cash and 750,000 newly issued, restricted shares by Commerce Planet for coverage of the company. 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