Figures it would be a Friday release IMO, what I expected (at least it's before market open, and not the close). Time to give it a quick read- hit the highlights.
Page 1:
"As of November 6, 2014, there were 558,942,523 outstanding shares of the Registrant’s common stock, par value $0.001 per share."
So that's up from prior 10-Q page 1:
"As of August 1, 2014, there were 517,272,472 outstanding shares of the Registrant’s common stock, par value $0.001 per share."
So that's some still, pretty furious dilution taking place, about 90 days, 3 months-
558,942,523 - 517,272,472 = 41.6 MILLION shares more dilution for another qtr. Down just a bit I think, will have to check. I think it was closer to 50 million for prior qtr?
Lets see what fully diluted is? HOLY COW, big jump there- I think that's from all the underlying derivative "Stuff" they hand out, convertible debt "financing" and what not.
Page 9:
" Fully diluted shares outstanding were 659,543,477 and 323,296,916 for the three months ended September 30, 2014 and 2013, respectively and 605,015,919 and 336,682,241 for the nine months ended September 30, 2014 and 2013, respectively"
Passed the 650 MILLION share mark and a more than doubling of shares yr over yr. Wow.
Lets see what the cash situation is, given all that share dilution?
PAGE 4: OUCH, nearly cash broke again.
Cash and cash equivalents: $46, 592
Wow, no wonder they're tapping into Magna. $46K bucks, total cash left in the account, end of qtr.
Looks like debt/current liabilities actually WENT UP from just last 10-Q filing? All this great "revenue" and stuff, and their liabilities are up and cash is down? Doesn't make much sense IMO, unless their expenses and spending are growing faster than money coming in, I guess?
PAGE 4: (this 10-Q, period ended Sept 30)
Total current liabilities: 10,336,315
PAGE 4: (Last 10-Q, period ended June 30, 2014)
Total current liabilities: 9,759,137
So their liabilities (with $46K cash left on hand) increased by:
10,336,315 - 9,759,137 = $577K. HALF A MILLION dollars increase in just 3 months, despite the "revenues"??? What's up with that? Their spending is outstripping any "revenue"??
Lets see what the "MEDICAL RESEARCH AND DEVELOPMENT" and "HEART TRIALS" company spent on R&D this qtr?
PAGE 5:
Research and development: 8,581
HOLY COW, they dropped R&D even more? (It was about $5K a month, prior 10-Q, so it appears they just don't do trials or run any R&D anymore IMO?) R&D total spending is not even $3K a month anymore?? And their twitter page and other places says something like they're the phase II/III LEADER in heart stem cell trials (something to that effect?) How is that possible? They spent less than $3K a month on R&D but claim to be a phase II/III "leader"? Doesn't make any sense IMHO?
Last quick check- the sales/general/marketing expenses (the big salary boosts, bonuses, etc)
PAGE 5:
Marketing, general and administrative: 1,512,706
Wow again, their costs have exploded. Wowy. $1.5 MILLION for the qtr for a company of 4 full time and one part timer? Holy smokes. It was growing rapidly already, but this qtr just blew it off the charts IMO. That line right there, if annualized would put just their basic spending at 4 X 1.5 = $6 MILLION per yr, far outstripping any revenue. Again, no wonder they're tapping Magna and quick IMO. That expense line is a mind blower IMO.
And lastly, the ole NET LOSS FROM OPERATIONS. Looks like it's INCREASED BOTH qtr over qtr again, and YEAR OVER YEAR. They're burning more money than they take in.
PAGE 5: (this 10-Q, period ended Sept 30)
Net loss from operations (1,466,732)
Lost $1.4 MILLION in just this qtr.
Net loss from operations same qtr 2013: (1,067,153)
So they just lost about $400K MORE this qtr, than the same qtr last yr, despite the "revenues"??
How bout net loss from operation for the 9 months total of this yr versus last year?
PAGE 5: (For the 9 months ended Sept 30, 2014, versus 2013)
Net loss from operations (2014): (2,545,703)
Net loss from operations (2013): (2,190,385)
So they are LOSING MORE MONEY through this 9 month period so far, despite "revenues".
And lastly, the GOING CONCERN (which show no signs of abating or vanishing IMO)
PAGE 12:
NOTE 2 — GOING CONCERN MATTERS
"The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed financial statements, during nine months ended September 30, 2014, the Company incurred an operating loss of $1,247,199 and used $747,184 in cash for operating activities. As of September 30, 2014, the Company had a working capital deficit (current liabilities in excess of current assets) of approximately $10.0 million. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.
The Company’s existence is dependent upon management’s ability to develop profitable operations and to obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern."
Wow. A lot there, will have to read in detail later. But pretty clear IMO why they had to go to Magna.
Last couple quick things to check- lets see where that big bonus to the CEO and CSO went, the $800K
PAGE 18:
"On July 1, 2014, the Company issued an aggregate of $800,000 promissory notes to officers and employee in settlement of accrued compensation. The promissory notes bear interest of 5% per annum and due on January 1, 2015."
Pretty much figured that one- as is their typical "procedure", IMO, they gave um a "note" which of course is now earning INTEREST and is "owed" to them. No surprise there IMO. Pretty nice in this low interest rate environment to be earning 5% interest on what's basically like a "CD" owed to you, IMO. Not bad.
And, lastly, it's always good IMO, to give a quick check on how they've been issuing out common stock shares- they usually pour um out like water, IMHO.
PAGE 27:
"Subsequent issuances
On October 3, 2014, the Company issued 514,886 shares of its common stock as payment of $70,521 interest on its Northstar (related party) debt.
In October 2014, the Company issued 1,818,182 shares of its common stock in settlement of $20,000 of convertible debt.
In October 2014, the Company issued 1,293,103 shares of its common stock in settlement of $15,000 of convertible debt.
In October 2014, the Company issued 2,260,764 shares of its common stock in settlement of $18,000 of convertible debt and accrued interest of $2,120.
In October 2014, the Company issued 552,846 shares of its common stock in settlement of $5,500 of convertible debt and accrued interest of $1,300.
In October 2014, the Company issued an aggregate 2,773,549 shares of common stock for consulting services.
(Notice- it doesn't say to who, or for how much? What "consulting services"? What was the billed amount so one can figure out the price of the shares they received?)
In October 2014, the Company issued 538,875 shares of common stock in settlement of accounts payable."
So, per their usual, they're "paying the bills" and all kinds of "other STUFF" using common shares of stock. Not CASH, but just issuing out shares, almost 10 million or so of them, as usual.
I'll give it a more detailed read later. Looks pretty much par for the course for BHRT, IMO. All the usual "stuff" that I've seen in all their past filings pretty much. Nothing new here IMO.
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