Rivulet Media Inc (fka RIVU)

[Canadian Trader]

BIOTECH DEBT: What Does it Matter? (MUST READ!)

I agree that you are correct when you say:

all the smart investors see...that this stock is in debt

There is no way anyone can deny that BMSN is in debt; as Jack likes to point out, it's directly in the quarterly reports! However, the "smart investors" that you're referring to are more than likely looking at it from a different angle. The fact is most young biotechs take on these levels of debt throughout the process of getting their drugs past clinical trials while looking towards licensing or other buy-out opportunities.

If you'd like an example, I can provide a topical one in the form of Medistem Inc. (OTCQB: MEDS), where our good friend Thomas Ichim was the former President and Chief Science Officer.

In the most recent MEDS 10-Q, filed on Nov 21, 2013 (for the period ending Sept 30, 2013), you'll find the following statements:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. The Company incurred a net loss of $856,222 in the nine month period ended September 30, 2013 and has a negative working capital of $18,512 and an accumulated deficit of $14,165,435 at September 30, 2013. The audit report dated July 8, 2013 from the Company’s independent registered public accounting firm indicated that the Company’s recurring losses from operations, negative working capital, significant accumulated deficit and lack of current sources of revenue raise substantial doubt about the Company’s ability to continue as a going concern. A significant amount of additional capital will be necessary to advance the development of the Company’s products to the point at which they may become commercially viable. The Company intends to fund operations, working capital and other cash requirements (consisting of accounts payable, accrued liabilities, amounts due to related parties and amounts due under various notes payable) for the fiscal year ending December 31, 2013 through debt and/or equity financing arrangements.

The Company is currently addressing the liquidity issue by seeking additional investment capital through private placements of common stock and debt. The Company believes cash on hand and funds expected to be received from additional private investment will be sufficient to meet liquidity needs for fiscal 2013. However, no assurance can be given that the Company will receive any funds in addition to the funds it has received to date.

http://www.sec.gov/Archives/edgar/data/1186519/000101968713004199/medistem_10q-093013.htm

Those phases seem familiar, right? It's essentially the same sentiment expressed in the BMSN reports explaining their ongoing efforts to raise capital while proving their research. MEDS was able to prove themselves in the field of Endometrial Regenerative Cells, and shortly after that 10-K they were bought out by Intrexon Corp (NYSE: XON, market cap $2.6 Billion):

The Voting Agreements

On December 19, 2013, each of the Stockholders entered into Voting Agreements with Intrexon.

http://www.sec.gov/Archives/edgar/data/1091823/000119312513487834/d651891dsc13d.htm

Thomas Ichim, Ph.D., former President and Chief Science Officer of Medistem, has agreed to join the Intrexon team within its Cell Engineering Unit. Under the terms of the agreement, Medistem stockholders will receive in exchange for each share of Medistem common stock $0.27 in cash and $1.08 worth of Intrexon common stock, or approximately 0.03920 shares, based on the 20-day volume-weighted average price of Intrexon's common stock immediately prior to closing, subject to adjustment pursuant to the terms of the merger agreement.

Acquisition PR: http://online.wsj.com/article/PR-CO-20140307-906378.html

For BMSN I believe the route to success is through the Regen BioPharma IPO, which provides a clean slate for investing directly in the subsidiary that is engaged in stem cell research. Furthermore, it is my opinion that BMSN/Regen would not have initiated the process of an IPO had they not believed in FDA success of HemaXellerate and/or dCellVax. This is a ground floor opportunity for us, and while we cannot say for certain that it will succeed (i.e., "to da moon", etc.), it is easy to see that BMSN/Regen create an attractive investment scenario.

In many ways, the beginning hasn't even "begun" yet, so how can the end already be declared?


One more thing:

HAPPY FOURTH OF JULY!

Cheers,
Canadian Trader

SUMMARY OF HEMAXELLERATE I PROGRESS

SUMMARY OF DCELLVAX PROGRESS

$$ BMSN / Regen BioPharma $$