Bioelectronics Corp (BIEL)

[Det_Robert_Thorne]

My theory based on low cash on hand

A couple of weeks ago, I noted BIEL's lack of cash and large amount of raw material in inventory at the end of 1Q/16, and suggested that they would need cash to build finished goods for shipment in 2Q/16. My theory about "normal" note conversion and the issuance of new notes addresses that need for cash.

Here's what I wrote on June 8:

Does "sold out" indicate BIEL cash flow problem?

For BIEL to be able to restock vendor shelves, it has to be able to manufacture new stock. What if the "out of stock" condition at Boots and other vendors is an indicator that BIEL doesn't have the cash to pay its manufacturer for fresh product?

At the end of 1Q/16, BIEL had $22K in cash and $273K in Trade and other receivables, but had $744K in AP (Accounts Payable and accrued expenses,) $4.3M in current Related party notes and $736K in Notes Payable. It also had Raw materials inventory of $499K but the inventory of finished goods was only $146K.

When the SEC brought its action against BIEL 1Q/16, it likely cut off BIEL's "normal" way of funding itself via the selling of existing notes to a third party and then issuing new notes to the family.

What if their manufacturer is asking for payment for new product (part of the AP number) and won't manufacture more devices until paid? What if they are demanding payment in advance?

Is BIEL desperately looking for alternative financing to pay the manufacturer?

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