OPXS & OPXXW ONE OF OUR STOCK PICKS OF THE YEAR FOR 2017. THIS MILITARY PLAY HAS THE POTENTIAL TO INCREASE IN VALUE BY 300-400%!

AETI- ANOTHER BEATEN DOWN TAX SELLING CANDIDATE THAT COULD EASILY APPRECIATE 200-300% DURING 2017

Manitok Energy remains our Oil and Gas Junior stock pick for 2017 (mkryf or mei.v).

ESMC has a $750 market cap and revenue of over $10 million in current sales~ Looks very cheap @ .10

VUZIX Corp (vuzi-$6.80)

TOP STOCK PICK FOR 2017

Initially recommended July 11, 2016 @ $6.35

(See email alert for complete story)

Most likely the only "pure play" within the AR & VR technology industrial segment. Research has pegged that this industrial segment will explode to $150 Billion by the year 2020.

A few weeks ago VUZI raised a quick $14 million in order to prepare for updated Smart Glasses for release during early 2017. Recently, VUZI won multiple awards at the CES 2017 Show in Las Vegas. The main thrust of VUZI is to sell smart glasses to the enterprise market. DHL is already using their earlier version M 100.

The street is waiting for the updated M 300 to replace the M 100. The stock is well off its 52 week high since Intel announced that it has nixed any further collaboration. The giant chip maker invested $25 milliion last January and might pursue selling their position.

While the M 300 is a technological leap forward the ULTIMATE money maker will probably be the Blade 3000. The Blade 3000 Smart Glasses provide a wearable smart display with a see-through viewing experience utilizing Vuzix' proprietary waveguide optics and Cobra II display engine.

This is the next step in computing! It is like having your computer or smartphone screen information with you wherever you go, providing immediate heads up access to information that wearers would normally have to view by looking down on a smartphone or laptap. The smart glasses are scheduled for release during mid 2017.

VUZI is currently pre-selling the M 300. On or about Dec 14th 2016, the company had completed the European Union emission's certification process for the M 300. The certification will allow immediate shipping of the M 300 Smart Glasses to European customers.

Final testing and certification for the shipments for the USA, according to spokesperson for VUZI will be complete within a few weeks. Management assumes that other major regions of the world will be certified during 1st Q of 2017.

Management anticipates robust roll-out during the 1st Q to the EU, Asian and USA markets. The recent equity raise according to management will be adequate for the next 12 months of product enhancement/ development and "new" product roll-out.

The market for the M 300 according to management will be at least 10X larger than the M 100 and the roll-out of the M 300 will be much faster. The M 300 installation base estimate of 50k unit's has a revenue valuation of over $60 million.

VUZI has mentioned that within 6 months that it will launch the M 3000 & Blade 3000. Both products will be using the company's "waveguides," which enable a form factor more-a-kin to eye-glasses.

The stats for growth in the smart glasses segment according to Forrester Research predict enterprise customers during 2016 were about 400k units, but anticipate growth to over 14 million by 2025.

There is little doubt that VUZI has a story to be told that has a "field of dreams" potential because of the vast behemoth market of $150 Billion within 3-4 years. We already know that Google, Apple, Intel and others are developing Smart Glasses not only for the enterprise arena, but also the next wave of consumer computer "hands free" and voice activated fashion glasses.

We all know that VUZI is the "david" of the many Goliath's that have their eyes and very deep pockets on this next wave of computing.

We will see shortly if VUZI can deliver near term with respect to the successful roll-out of the M 300 and then the Blade 3000 being introduced during mid 2017. If VUZI has near term success and product raves it is very likely that a major technology company like Apple or Google will snap up VUZI with a huge premium to the current share price.

As we enter 2017 it is our belief that VUZI will begin to firm up after the usual ravaging of tax selling season. We rate VUZI with strong, but a speculative BUY rating with exceptional upside potential during the next 12 months. Investor's should also realize that even if VUZI does not climb to the top of the hill that this market is so large that there will be plenty of room for 2nd and 3rd tier players. The AR market is just beginning to blossom and there is potential for an out-of-this-world experience by owning shares in VUZI as it captures part of this $150,000,000,000.00 emerging revenue during the next couple of years.

Optex Systems ( OPXS $.70 OPXXW $.15)

TOP STOCK PICK FOR 2017

We last featured OPXS within our October 8th 2016 email alert. Our opinion has not changed except that this stock is even cheaper than our initial recommendation because of tax selling and the endless selling of shares by institutions that bought IPO shares during the August 2016 offering brought by "Gunner" when the firm raised $4.5 million. The Brokerage firm did a horrible job in placing the issue and even did a worse job supporting the issue. The results have been somewhat of a slaughter. We initially recommended OPXS @ $2.00/sh. The stock was trading @ around $2.50 a few days prior to the "setting" of the IPO pricing. The institutions that decided to "play" the deal most likely shorted the deal to the $1.20 level that was decided upon so that the raise could happen quickly. (The unit consisted of 1 common share and 1 five year purchase warrant exercise price @ $1.50 and non-callable.)

Once the deal was closed the Institutions wanted out and "killed" the bid for months and months and of course we entered tax selling season and we got it from both ends.

Please recall that OPXS designs and manufactures periscope configurations, surveillance sights , optical sighting systems and assemblies and night vision optical assemblies. The Abrams & Bradley fighting vehicles, the Stryker family of 10 vehicles and the "new" AMPV all use OPXS's product lines.

During fiscal 2016 revenue ballooned to $17 million from $13 million and losses narrowed dramatically to only $200k. The company retired and converted all outstanding Preferred into common and will save over .07/sh. At present there are 9.8 million shares outstanding and fully diluted. There are around 4 million purchase warrants outstanding and trading under the symbol OPXXW. As the company enters fiscal 2017 the balance sheet is strong with cash on hand and almost NO debt. The current book value over is $1.00. At present we are trading @ a 30% discount to book and only 25% of estimated 2017 sales. If we consider that anticipated revenue could top $25 million during 2017,which equals almost a 50% increase over 2016 revenues assigning a PE of 15X is very conservative. We believe that OPXS could easily earn .20 during 2017 and assigning a PE est. of 15 yields a share price of at least $3.00. This is a far cry from the distressed share price of .70!!

Recently in the news the Saudi Government has decide to buy 1 Billion dollars worth of Abrams Tanks which equals around 110 vehicles and they all need OPXS's optics. The optics that OPXS supplies to new equipment is around $35-$40k/unit. This eventual contract is worth around $4 million. The Kuwait Government also ordered $1.8 Billion in new fighting machines and upgrades which equal around 210 units and each unit is worth around $25k or some $5 million worth of products for OPXS. We assume that as it filters down thru GD within a few months or so OPXS will secure the contracts. At present OPXS has a $12 million backlog that will be completed during 2017 and is only half of their anticipated business not including the 2 above mentioned foreign orders. OPXS has the potential to expand rapidly to $50 million in revenue with no additional CAPEX.

Finally tax selling season and institutional selling is over and behind us. The balance sheet and cash position for OPXS is strong and with a "new" hawkish administration entering the WH it is our belief that the scenario of leading from behind and having a weak military are in the past. Our world has become much more dangerous during the past 8 years and now the US Military is going to get it's MOJO back.

Our Military neglect and degradation of our equipment is over and we believe as soon as Trump gets in office on Jan 20th 2017 that all levels of military spending will increase dramatically. Most of our fighting vehicles are old and new replacement or serious upgrades are needed and OPXS is well positioned during the next few years to help the US Military and USA get back to Greatness Again.

If you purchase shares at higher prices it is time to average down and buy this severely undervalued military play for exception upside potential. The warrants offer amazing leverage and even better upside potential. The warrants have a 5 year life and are not callable so one could buy a huge position in the warrants and get dramatic exposure for only 20% of the cost of buying the common. We actually own both and are looking for a huge win from both positions.

American Electronic Technologies( AETI ~ $1.60)

52 week range $1.50-$5.15

Shares outstanding~ 8.34 million

Insiders own~ 38% & Institutions own 40%

Book value $1.56

Fiscal year~ Dec 31st

American Electric Technologies (AETI~NASDAQ) is a leading supplier of power delivery solutions for the global energy industry. The company offers Electric power distribution and control products, electrical services and construction services.

The recent third Q numbers resemble a "dry hole!" The revenue for the Q dropped dramatically and had a diluted loss of .33/sh. This of course is all history and the common shares have traded well off their 52 wk high of $5.50 and now are trading near it's 52 wk low of $1.50.

The real picture is the forward looking opportunities and the recent firming of the Oil and Gas prices and 3 major contracts just recently announced. Regardless, of the poor showing for the 3rd Q of 2016 the backlog remains robust, up 24% to $10.9 million. According to management, "although the midstream markets remain challenging, the company continues to execute on our strategy to penetrate the power generation and downstream Oil and Gas market, which now represent almost 60% of their backlog heading into Q4." according to Dauber.

Since the 3rd Q release there have been other major contract awards.

November 28th~ Announced contract to provide a turnkey power delivery solution for a land fill gas reclamation project in the US~ Delivery to occur in the first Q of 2017.

December 5th 2016~ Announced a major contract to provide a turnkey power delivery solution for a liquid processing plant and terminal in Trinidad owned by one of the world's largest O & G companies. The project is an upgrade to an onshore terminal in Trinidad that processes Oil and Gas flowing from an offshore field via a 12" subsea pipeline. This contract is a triple grand slam for AETI because it represents a new relationship with a super major global integrated oil and gas company. ( We assume it is BP!) This project is anticipated to be completed by mid 2017.

An earlier announcement October 31st 2016; AETI announced another turnkey power delivery solution for a new Liquefied Natural Gas Liquefaction plant under construction. This is a repeat customer!

August 29th 2016 The company announced another contract to provide IntelliSafe TM arc-resistant switch gear for a new 50-MW tri-fuel peaking power generation facility in the Midwest of the US. AETI anticipates delivery during the 4th Q of 2016.

During the past 9 months revenue collapsed to $28.4 million vs $41.3 million during 2015. The losses ballooned to .68/sh vs a profit of .08/sh. Of course some of this can be blamed upon the weak Oil and Gas Industry. We are slowly re-balancing the production vs demand curve for fossil fuels around the world and will eventually turn the corner and more O & G projects will be contracted by AETI. In the meantime the company has been very successful in penetrating new business opportunities around the globe within the Electric Power Generation Industry.

We have a company that is trading at its 52 week low, new business flowing in with meaningful contracts being banked during the 4th Q of 2016 and also looks like a strong first half of 2017.

Interesting Note: Regardless of the price of Oil and Gas eventually infrastructure must be replaced and upgraded. AETI will participate in the upgrades and many new projects in our opinion will surface as the Trump Administration rebuilds America's infrastructure within every industrial segment in the US!

AETI has been the perfect tax selling candidate and we look forward to a strong January bounce in the share price as revenue growth and earnings return. The other factor to consider is that the float is very tiny because management and institutions own around 80% of the company's common shares. If a "new" herd surfaces and decides to BUY this opportunity the "bubble-up' could be dramatic.

We rate AETI with a Strong Buy Recommendation at current levels and believe that the share price could easily recover to recent highs during 2017. We see almost zero downside risk at current levels.

WPCS International ( WPCS- $1.25)

fully diluted shares outstanding 3.8 million

Book value around 2.4 million ( doesn't include recent raise of $500k~ Equity around $3 million

Cash~ around $2.5 million

6 months ending Oct 31st 2016 vs Oct 31st 2015

revenue------------$8.3 mill*********$8.3 mill

net income(loss) .03 ***********($3.18)

fully diluted 3.8 million*****1.9 million

WPCS offers a comprehensive range of capabilities in low-voltage wireless communication and integrated security systems. The company delivers it's products and services to the public service, healthcare, energy and corporate enterprise markets where there is the highest demand for advanced technology.

WPCS during 2014 & 2015 began a major reorg including a reverse split, discontinued multiple operations due to poor performance, added new management, concentrated on their most profitable division and has expanded & enhanced its' reach domestically. It should also be noted that 95% of all converted debt and preferred has been converted.

During June 2016 WPCS received a cash settlement of $1.6 million from a construction claim. The current backlog remains very strong and growing rapidly. At present the backlog stands @ $16.3 vs $13.9 million. The company was recently awarded exclusive contract preference in the City of San Francisco which has huge revenue and earning potential. During November 2016 WPCS was awarded $2.6 million in contracts. The City of SF awarded a $1.4 million audio-visual equipment and integration project related to the SF transportation system and a $480k contract with the Department of health for the city as well.

According to management, there are many potential pending contracts that are anticipated to be announced during the 1st Q of 2017.

Recently, management was notified by Nasdaq that if they did not increase their equity that they would be removed from the listing. During late December of 2016 the company raised a quick $500k in order to comply with listing requirements . At present Institutional investors own 18% and the Insiders control 28% of the total fully diluted common shares outstanding.

As we enter 2017, management intends to strengthen the balance sheet, increase top-line growth, reduce overhead and expand their business model into other areas of the US. The company is also actively pursuing an acquisition that can compliment the current organic growth.

It has been a very tough going for investor's that owned WPCS during 2014 & 2015. After completing a reverse split and large conversion of outstanding debt WPCS entered 2016 with a mission to concentrate on high margin contractual agreements and to slim down the structure of the company so it can compete and prosper during 2016 and beyond.

As we enter the 2nd half of fiscal 2017 we believe that as backlog continues to grow and profitable quarters continue to multiply WPCS has the potential to reward shareholder's handsomely during the next 6 to 12 months. Of course tax selling season has been brutal on WPCS as well as many others and January 2017 offers an excellent opportunity to build a position in this undervalued situation. In our opinion, WPCS could easily book $20 million during the balance of fiscal 2017 and earn .15 until fiscal 2018. If we assign a conservative PE of 15 then a share price of $3.00 is surely not a stretch . We like the potential of a 200% appreciation within 6 months from a successfully implemented business model. This issue is very thin and can be very volatile so traders will have many opportunities to scalp quick trading profits or hold longer term for very attractive returns. We rate WPCS with a strong buy rating for investors and traders.

ESCALON MEDICAL CORP (ESMC .10)

52 wk range .07-$1.07

The company operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the area of ophthalmology.

Sonomed-Escalon develops, manufactures and markets ultrasound systems used for diagnosis or Biometric applications in ophthalmology , develops, manufactures and distributes ophthalmic surgical products under the Trek medical products name and manufactures and markets digital camera systems for ophthalmic fundus photography and image management systems.

Fully diluted shares outstanding 7.5 million

Book value $1.5 million or .20

NOL $35 million or $4.66/sh This is an amazing NOL for a company this size. I would not be surprised if there are candidates that could fit into this company to take advantage of this huge tax saving benefit.

Last year the company had revenues of over $11.5 million and was still listed NASDAQ. The share price was around $.07-$1.07.

During the summer of 2016 ESMC lost its' listing and collapsed down to the current level. The tax selling season has been brutal on this issue because we assume may institutions sold off their position because of lost listing on the NASDAQ.

The first Q of fiscal 2017 saw a revenue decline by almost $500k because of weak sales in the EU and supply chain disruptions. The losses continue and we saw a (.05)/ share. Revenue reached $2.3 vs $2.8 million while losses increased by .01 to .05 from .04/fully diluted shares outstanding.

It is obvious that ESMC cratered because of the de-listing. The NASDAQ has the habit of destroying companies when they NO longer qualify for listing on the exchange. Usually it is a major blow to the company because of how it is perceived by players. When a company gets de-listed it very possible that the funds that owned shares must sell promptly. The end results is massive selling and NO buying will always collapse a stock this dramatically . Plenty of sellers and limited buyers.

At present we have a market cap of $750k and a revenue base of $10 million. We are trading @ 1/2 stated book. The NOL as mentioned prior is surely worth plenty in the right situation. Regardless, ESMC cratered during the 4th Q of 2016 to current levels. At current levels ESMC is trading as if chapter heaven and the grim reaper is at the door step.

Bottom-line ESMC is oversold and should easily recover to at least .40-.50 as 2017 unfolds. Even if the management team decides to throw in the towel the company is worth .40. This company has had sales of over $10 million for many years and we believe that profitability can return or management can sell the company. We see little risk at current levels and there is a short term trade or a 300-400% recovery because tax selling season is over, the EU reaches firmer footing and the supply chain for parts are corrected.

We rate ESMC with a very speculative buy rating for the true penny player and can SEE CLEARLY THAT ESMC has path to price recovery with a few "eye drops" of reality.

Manitok (mei.v or mkryf .14)

For complete research on MKRYF please visit www.saadvisory.com and review the Oct 28th 2016 email alert.

THIS IS OUR JUNIOR OIL AND GAS STOCK PICK FOR 2017

We initially recommended mkryf a few months ago @ .10/sh. We have seen a dramatic move in this Alberta based Oil and Gas Company. Of course most listed investments within the energy sector have recovered due to the OPEC and NON-OPEC announcement to curb production for at least the first 6 months of 2017. In addition we have seen a dramatic cold wave that continues to freeze most of North America. The global warming nuts would call it signs of the end of the Earth, but for most it is called WINTER!

The story behind MKRYF is not only a world production pull back and winter acting like winter, but the company is firing on all cylinders.

On or about November 30, 2016 MKRYF announced third Q 2016 results. Production averaged 4300 boepd vs 3600 boepd. The company also closed a $21 million Notes offering and executed the closing of an asset purchase agreement for the acquisition of approximately 1750 boepd of production and 53k acres of undeveloped land and facilities in the Willesden Green area, which include an emulsion handling facility with capacity of approximately 2500 bbls/d and a natural gas compressor station with capacity of 11 Mmcf/d. Total consideration for the acquisition was $13.5 million.

Subsequent to the acquisition, Manitok's production was approximately 6500 boepd, its proved plus probable based upon Dec 2015 N151-101 equaled 28.4 mboe ( this is a very stale number and should see dramatic upside when Dec 2016 numbers are reported). On Dec 8th 2016 MKRYF had reported current production in excess of 7100 boepd, with 40% of the production being light oil and liquids.

The company attributes the production growth to placing 3 of 4 recently drilled oil wells in the Southeast of Alberta online.

According to documents there are around 227 million shares outstanding ( does not include warrants, options and other potential conversions).

Important fact to consider: Manitok's EV ( enterprise value) is currently $17,500 per flowing boe. With production of 7100 boepd Manitok's EV could easily be valued much higher and $50k/flow barrel boe would not be out of the norm. This value would equate to an .88 share valuation vs the current MEI.V of .18 .

We assume during early January 2017 MEI.V will announce additional drilling plans for the first 2 Q's of 2017 before breakup.

Manitok should benefit dramatically with the strength in fossil fuel pricing, cash in the bank, growing production, cherry acreage and cheaper & cutting edge drilling technology. Manitok, in our opinion, could easily trend much higher during 2017 and beyond and could even be bought out because of its' super cheap metrics. During the next few months we will see if OPEC can hold the line with their production limitations. We will see if NON-OPEC nations that have also agreed to cut production can follow the accord. Another big development will occur when Donald Trump becomes the 45th President and how he relates to Iran. He surely will not lead from behind as our 44th President heads to the golf course. If Iran continues to cause issues in the region we are confident that sanctions will return and most likely reduce Oil flow which will of course help pricing.

We will continue to monitor MEI.V or MKRYF and label this junior oil and gas company as our Oil and Gas Stock Pick for 2017.

WE MAY BUY, SELL AND OR HOLD AT OUR OWN DISCRETION .We own shares in bsgm.