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Is US Stemcell progressing their trials? How does this compare?
http://finance.yahoo.com/news/welsh-stem-cell-firm-wins-fast-track-filing-081848338--finance.html
I agree, no hit to "cash flow" in any way...
No way this is big news by itself, not without knowing what's to follow.
Debt was dead wood that wasn't going to get repaid anyway, seems like. That's the concerning part.
Curious as to the details behind the deal. Would an equity exchange have been mentioned in the 8K? I would imagine so, didn't see that.
Something had to give, curious as to what.
This is only a first financial step on a path that can take two very opposite directions, IMO. Either one is a result of no cash, and the optimistic one is under the assumption that Sr. leadership are great negotiators, and that MyoCell is about to go big time, and I don't see the signs of that just yet based on what's public, so I'm waiting to see what more news is to come, cause I have a feeling this is only the first of several large financial "restructuring" announcements to come.
It's good news at face value, so let's just watch what else comes down the line and look at the "cash flow" statement in the next 10Q.
This helps the balance sheet, but we should consider the human element, if we were potential future creditors, what would we do?
This type of move, IMO, places more onus on BHRT to self finance through equity. Which would be a good thing, if a company were not "responsible" with debt.
But I see BHRT as having managed debt very well given their circumstances. Hence the very creative financing structures we see in their statements. The predicament here IMO is due to the enormous amount of funding needed versus the time it has taken to progress product to a marketable state in their primary market. So, no new news here other than we need some cash!!!
This is where senior leadership makes all the difference and I'm looking forward to an upside surprise off good decision making, great product, influence, and luck...
I'm sure you've noticed as I have that BHRT is much more active, marketing any "good news" across all channels. It's a tactic, one I absolutely agree with, to raise awareness and add a few pennies to the price here and there, every little bit helps.
Often times though news that on the surface that seems good, isn't... and vice versa.
I believe in at least being aware that there often is another side to most things, bad or good. Just being aware of the possibility, even if I don't act on it, might inform me later, as it's done for me in the past.
Today's news was interesting, now we wait to see what else comes down the pike. A 2 million settlement, for this company, is no small order. I'm certain other creditors have taken note. If I were a creditor, I would. Let's see...
I doubt all these announcements are just fillers. I see them more as pieces to a bigger picture. Small pieces to drive up equity value for "self financing" purposes, perhaps, until the mythical "FDA big bang" happens, whenever that may happen. In this case, though, maybe it was a legal requirement to comply with financial regulations as a public company.
Either way, I'm curious as to what more is to come...
The reduction/elimination of this debt instrument in itself is not a bad thing, if we look at it as a stand alone event, IMO.
But these things are never stand alone...
So we also should consider a bigger possible picture. The elimination would be good, immediately, if that debt had been partially serviced, meaning eating away at cash flow, which I imagine was not the case, or if imminent legal action was on the horizon, which we don't know, but also doubt at this point, as a record would come up somewhere.
From my experience, negotiating debt pay downs, settlements is a sign of a very scary broader picture, because this agreement may preclude, in all likelihood, the company from finding more cash on the credit market, at reasonable terms, hence why we've seen the Asher notes for example. This reduced access to credit can stick around long after cash flow has been stabilized, inhibiting growth.
Furthermore, it's a proof point of a very tenuous cash flow position for a company or individual, beyond what we're seeing on official filings. Settlements are often a sign of a last ditch effort when one still believes in the light at the end of a tunnel or they can be preemptive actions to easy a BK proceeding by eliminating creditors prior to filing.
On the other hand, the settlement can be a good thing, if the company is finding other sources of free cash flow through net revenue or equity placement, and if there is a very disciplined strategy to eliminating the debt that "is being serviced" (most inhibiting to cash flow), which given this situation may be way harder to do than imagined.
Again, for me this is all a guessing game until a major milestone like an FDA approval is reached.
In the meantime, I'm watching out for other news from the company or their creditors, agreements, default accelerations, legal actions, potential new investors (we never know), etc so that I can paint a clearer picture as we move through 2014.
For now, I get the sense this is a make it or break it year for BHRT, and I'm still holding on, manning the deck, setting the sails...
Here's my guess...
Those warrants that Hop brought to light were picked up, "in the money", I believe ranging between .016 and .031. A whole lotta them...
I bet the brokers are holding the price higher and higher patiently selling off to anyone still willing to buy at these prices, I have never seen this stock behave as it's doing now on no significant news. I recall about 50 million or so of those warrants and if a good chunk were exercised then this trend may continue for a while, who knows.... Just my guess.
Now, if those warrant holders, wait let me clear my throat, have convertibles too, well then, we might just see the exact opposite trend and the price may fall faster than a feather in a vacuum. Again, all conjecture, but seems plausible given the 10K and what the market is doing.
That said, I'm long on this knowing the risks. I'm betting on more news this quarter that will drive the stock even higher on top of what the Market Makers may be doing, and if not, well then I look forward to reading Hops' casualty report of the firebombing.
Again, just my very curious guess on the activity.
Thanks for the direction, just read up on this...
Just hope that from among the sharks out there, "smart money" continues to see the value in this company and it finds a way to fund, in this case the MARVEL and REGEN trials.
At this point, I am ASSUMING that the MIRROR trial has been "initiated" and that the statement which reads "fully funded by Bioheart" mean exactly that.
I am also ASSUMING, my guess, that the trial is active but not progressing as fast as we'd like because they don't have the "full funds" to make that happen. So it's probably, my guess, on a temporary "unofficial" hold or scaled down, slowed down until more cash comes in. Hence, maybe why we only see one line in the 10K regarding MIRROR.
But I am betting that they are working diligently toward securing the funding, and I'm betting that we'll receive some news this quarter or much more detailed information regarding MIRROR in the next 10Q.
I'm also betting that reliance on short term Asher type loans will dwindle due to higher share prices and will be looking to see, at least, a stop to such financing, if not a reversal. Again, all my opinion based on what I'm reading off the 10K along with other information points.
Yeah, I agree that the "warrants" can run one of many ways, depending on who owns them, and their ultimate strategy regarding BHRT.
I would assume the holders would want to turn a profit in the easiest and fastest way possible, "time to money." If it's an organization like an Asher with "convertibles", then the pump and dump game might be best for them, but as you mentioned, just conjecture at this point.
As for Northstar, as you mentioned, this seems like an entity formed by "interested parties" in BHRT to take on the BoA and Seaside National.
"Northstar, which is owned in part by certain of our existing directors and shareholders, including Dr. William P. Murphy Jr., Dr. Samuel Ahn and Charles Hart)"
As an additional "outside" investor, perhaps an idea would be to take on a private equity position in Northstar which then would extend terms to BHRT and it would, I assume, not necessarily show up in the 10K, except for the terms that would influence the BHRT directly. That way the "investor" could possibly avoid a subordinate position on his/her investment. Again, I certainly don't know what terms of this might look like, but it may be an option or avenue for a larger "trial" related investment. Again, all conjecture...
As for the Asher loans, yeah, those are just loans and at this point the most worrisome, combined with the extreme warning relating to their abilities to continue as a going concern.
My worry on these is that things have to look extremely bleak to take out three micro loans in the span of over a month, and just "last month". I hope that the "well timed" announcement of the Phase I Angel relieved some of that operational stress. Because a company would only take out a "payday loan", if it were down to its last dime, but maybe hopeful of more concrete positive news in the near term. At the end of the day, I try to temper my "hope" for BHRT with sound judgement based on the facts and how I interpret them. Thanks for your feedback on the financials. I find them insightful and useful as a "possible" gauge or guess at what's going on...
So what perhaps Hybrid was referring to were the Warrants that are in the money, if the holder or holders exercise them, couldn't tell who they were. If they do exercise them that would be some cash flow, but $865K would handle only a few months of operations based on the what the prior cash flow statements show.
If they have any capital funding for trials that they're working through something like a Cassel Salpeter, I don't see how we would know that.
But they did retain them, and I'm sure something is being worked regarding trial funding or else all this would be for naught, but again no way to know for certain based on public info.
My guess is that whoever holds these warrants, if exercised, would certainly work to keep the price up so they can take some profits before any more big news, good or bad... Maybe a reason why we're seeing a slightly different trading pattern now.
As for trial funding, I remember a press release about a 2 Million USD term sheet from Vitalmex in 2012, but that then seemed to vanish. I could be wrong as I know the Angel was done in Mexico, with them? Maybe someone can add, shed some light here for me?
Oh, and by the way, got a response yesterday from clinicaltrials asking me to check with Bioheart on why Mirror wasn't registered, so guess I will do that...
Yeah, I get that, but it has to be considered with the 150% prepayment penalties, how that fits into ongoing operational cash flows, and other specific terms in the notes.
The last two entries in February look like short term loans to meet weekly liquidity needs, just before their Phase I announcement results early March that gave them some breathing room.
It was well timed breathing room and I'm just wondering if that breathing room is enough for the short term... Again, it needs to be taken in as part of the complete cash flow picture. It seems as if 32K and 35K are significant sums at this point.
A big boost would be, perhaps in the next reports, to see a significant elimination of this financing. And much more "positive" detail on the MIRROR trials.
I tend to see it the same way. Question: with a higher equity price for the moment, how would you see the possibility of retiring the Asher and other convertible shares early? Looking that over now, just wanted your thoughts on this...
What are your thoughts on the MARVEL and REGEN trials for MyoCell? According to the 10K they seem unfunded since 2010, yet MARVEL shows up as ongoing on the clinical trials web site, but not recruiting. The 10-K has the MARVEL at full stop due to funding, hence the reason why it's not recruiting? Would be a big difference versus full participation.
Also, is the MIRROR trial a third avenue to the approval of MyoCell? Whichever gets here first type scenario? Or is it for a specific application, of the MyoCell product intended for each?
One line in the 10K for MIRROR and no other, non-PR, public information.
On that note, I still have not heard back from clinicaltrials.gov regarding the MIRROR, as such a reason why I would like to see it published to have more public information as to the trial objectives and progress.
Final thought, if these are so far along, why start trials in other unrelated areas? Is it because they're in Phase I and easier to complete? Cost wise, resource wise?
Or is it that the company has encountered a more significant barrier pursuing their original objective in MARVEL, REGEN, and MIRROR trials?
I understand the financial nature of this early phase development biotech, so we're investing in the future knowing knowing cash flow is through equity and debt funding against an "estimated" time line.
The key for me is how they're spending that money and time to progress their flagship offerings. These are some of the questions I'm currently thinking about as I try to navigate through all the distractions and come to a better informed decision point. Any thoughts?
Yeah, there is a large debt pay down to a single holder from 2008, account and interest payable, under section F-21.
But on the other hand, they accrue other short-term debts, including institutional convertibles, with lower interest, 8%, but with very unfavorable terms.
Overall, the net liability decrease is somewhat, which we can see on the balance sheet, but even with a higher interest 13.5, I would imagine the terms for servicing this "one" debt are much more reasonable than what's to follow with the "convertibles."
I expected the ongoing dilution, even at this rate. But regarding the debt, the look of this is a management team taking a bet that they can recover within the short-term payback window or provide a compelling enough reason to refinance the existing short-term debt with "more" debt, to cover operational cash flows.
They're betting that progress with the various in-phase trials will provide enough of a boost to the share price to allow for more efficient equity financing between now and 2015.
The $$$ question is how much do they need to progress the Phase III trials and are they close to getting the funds, or do they have them already? That's not something I can readily gather from the 10K. This goes for MARVEL, REGEN and MIRROR trials...
Boy did this open Pandora's Box...
I too found the information you guys brought forth, and thought that it just doesn't make sense at all to announce a trial and not register it...
There is a Voluntary Submissions Provision in FDAAA 801, but I couldn't tell just by reading it if it supports the idea of "voluntary submission" for all trials...
The link is in the FAQ page. Just look for Voluntary Submission.
http://www.gpo.gov/fdsys/pkg/PLAW-110publ85/pdf/PLAW-110publ85.pdf#page=94
So, I reached out to Clinical Trials asking just confirm if this indeed is possible...
Will follow up, and will wait to hear what they say.
I'll do a little more 'DD' before I reach out the CEO. As soon as I get anything back on this, I'll post...
Can anyone share any information on the Phase III MIRROR trial, other than the company press release from last year?
I find the MARVEL record on clinicaltrials.gov, but nothing on this...
My Two Cents…
I would imagine that the commercializing of the MyoCell product itself will be an immense task from sales development with healthcare professionals to integration into insurance coverage, along with production, distribution, etc…
I also believe, as I’m sure do most of us, that this product alone represents a major revenue channel, and may justify the future valuation we one day hope for.
So when I see a company undertake what looks like disparate product development, it too tends to make me worry since I always try to take the most basic approach to human nature. What I’ve seen others do. What I would do in a situation.
My instinct is that the Phase III development has stumbled onto a roadblock, significant enough to get the company to think about plans B, C, & D. It is what I expect coming out, and it at least tempers my thinking so I’m not downside surprised and I can be ready to move as needed.
On the other hand, still assuming this is the case, the leadership at this company undoubtedly believes in the efficacy of their technology and processes. Based on my layman’s knowledge of how stem cells work, it would make sense to me that many of the processes currently in Phase III trials are just as applicable in many other seemingly divergent areas.
Because the basis for the technology itself, stem cells, whether from muscle or fat, is not divergent at all. Depending on how they are cultured, stem cells may provide many of the same benefits we’re reading about in the cardiac trials.
A great example of how malleable or adaptable these cells really are is the article below just released a few days ago…
http://cen.acs.org/articles/92/web/2014/03/Stem-Cells-Possess-Mechanical-Memory.html
It demonstrates just how universal stem cells can be in treating ailments and aligns well with the strategy we’re now seeing Bioheart take.
These announcements would lead me to believe that researches at Bioheart are discovering that they can in fact transpose their techniques in the current trials to fit these vastly different ailments, and the common denominator is the stem cell.
I would also guess that safety results in Phase I trials from other efforts may be good indicators of expected early performance for some of the new trials coming out. But again, this is my guess from reading some of the trade rags, press releases and conferences I’ve listened to as an interested observer.
That said, if I’m the CEO of this company, I am definitely looking at these channels if I can afford them, they give us great press and market awareness, initial phases may not require as much human and financial resource allocation, and what ever is needed may be affordable internally.
I’m also looking at these based on expectations of what the FDA may move to approve in the midterm along with a view into how we can commercialize this ourselves, license the technologies domestically and abroad, and what kind of interest this would garner from other biotechs who might see Bioheart as an acquisition target for the intellectual properties they will have developed as this market segment comes closer to mainstream commercialization.
Net, IMO, I see this possibly as a short term strategy due to an imminent challenge or obstacle on the Phase III trial, but I also see an intelligent avenue of pursuit if management believes that the products they are offering truly have value in the market place.
Everything I’ve seen so far tells me that not only do they have the passion for what they’re doing; they also have the skills to get it done...
I hope that in the short-term I am pleasantly surprised and proven wrong, and that the Phase III trials show results are receive approvals well beyond what any of us could have imagined.
I find your posts informative and educational. Thank you… Much appreciated and I will continue to follow.
As for me, I will be looking first at the convertible notes, the ongoing reliance of BHRT on “toxic debt.” A great victory would be to see a decrease or elimination of said debt, even if there will be a sharp increase in shares outstanding, and there will most certainly be.
As for the developing revenue channels and partnerships we’re seeing internationally, those can provide great opportunity and are a must for this company given the domestic road blocks and time needed to clear trial processes and FDA approvals, if ever.
However, successful international business requires many factors to make sure that the endeavor yields profitable results. Market awareness leading to demand generation, along with processes, personnel, and infrastructure, are just some of the many factors that they must address in cross border business development, and for each country the specifics will be unique.
Channel sales development is a complex task wrought with peril, so yield from this will be a long time coming. Any revenue we see now from this will be icing on a cake.
At this phase, most important is the financing structure, interest payments and equity manipulation via third parties, and of course, trial progression and approval.
Looking forward to the 10-K