MARKETWATCH 9:57 AM ET 12/13/2017 Symbol Last Price Change CRCW 223 0 (0%) QUOTES AS OF 02:13:07 PM ET 12/12/2017
Investors are flinging cash at bitcoin because the price is going up and because they believe it could be the currency of the future. Investors are flinging cash at The Crypto(CRCW) Company because bitcoin is going up.
The hottest bitcoin company in the market is the offspring of a reverse merger this summer with a sports-bra company. Shares of Crypto(CRCW), which trade over the counter, are up more than 2,000% since September, though they had a minor setback Tuesday when they fell by two-thirds. That fall cost Crypto(CRCW)$8 billion in market cap, leaving it worth $4 billion. At its peak on Monday, Crypto(CRCW) was worth more than a quarter of the companies in the S&P 500.
What do investors get for that price? Crypto(CRCW) says it develops proprietary technology, like trading management and software for high frequency trading strategies. The company also offers consulting services on blockchain and cryptocurrency assets, as well as giving investors a way to own a portfolio of digital securities.
What has investors stoked is Crypto's(CRCW) portfolio of cryptocurrency. At the end of September that included $2.6 million in cash and $900,000 in cryptocurrency. That portfolio is likely worth much more after the recent run (https:// www.wsj.com/articles/bitcoin-the-worlds-most-dramatic-bubble-ever-1510303095) in cryptocurrency prices, but nothing close to $4 billion. "If I can quote Elon Musk, we are working very hard to grow into our valuation," CEO Michael Poutre said in an interview Tuesday. On Wednesday morning, Crypto(CRCW) issued more stock.
Low trading volume is the main culprit for the wild price fluctuations, according to Mr. Poutre. Four insiders, including Mr. Poutre, control more than 80% of shares outstanding, according to FactSet.
Crypto (CRCW) and the cryptocurrency are closely linked but there is one thing that sets the company apart from bitcoin--it has one full quarter of very revealing securities filings.
A look at the income statement (http://app.quotemedia.com/data/downloadFiling?webmasterId=101803&ref=11893101&type= HTML&symbol=CRCW&companyName=Crypto Company(CRCW) &formType=10-Q&formDescription=Quarterly report with a continuing view of a company's financial position&dateFiled=2017-11-14)reveals that stockholders are relying on management's skill in trading an unpredictable asset class. Total third-quarter revenues of about $488,000 were almost entirely from realized trading profits.
Corporate governance arrangements leave something to be desired. The board of directors comprises just three people, two of whom are insiders. Mr. Poutre said he expects the company to have a board with a majority of independent directors soon. In the meantime, the company says that officers approve their own business-expense reimbursements.
Those concerns have caught the attention of the OTC Markets Group(OTCM), which provides data on stocks that trade over the counter. The group last week designated (http://www.otcmarkets.com/learn/caveat-emptor) Crypto(CRCW) as a caveat emptor security, which means that a skull and crossbones icon sits next to the stock symbol on the OTC markets website.
Then again, investors shouldn't need any such warning to make due diligence a regular habit.
Write to Charley Grant at charles.grant@wsj.com (mailto:charles.grant@wsj.com)
Biostage Announces Binding Agreement For $4.0 Million Private Placement - Investment will provide path forward for Biostage -- Focus remains on continued development in Pediatric Esophageal Atresia and Adult Esophagus -- Closing and funding expected to occur later this month -
PR NEWSWIRE 4:05 PM ET 12/14/2017
Symbol Last Price Change BSTG 0.0715up +0.01573 (+28.21%) QUOTES AS OF 12:20:31 PM ET 12/15/2017
HOLLISTON, Mass. , Dec. 14, 2017 /PRNewswire/ -- Biostage, Inc. , ("Biostage(BSTG)" or the "Company"), a biotechnology company developing bioengineered organ implants to treat cancers and other life-threatening conditions of the esophagus, bronchus and trachea, announced today that on December 11, 2017 it entered into a binding Memorandum of Understanding (the "MOU") with a private investor for the private placement of 40,000,000 shares of the Company's common stock, or a convertible preferred equivalent, at a purchase price of $0.10 per common share, and warrants to purchase 60,000,000 shares of the Company's common stock, or a convertible preferred equivalent, for gross proceeds of $4.0 million. The investor advanced a $300,000 deposit on the private placement proceeds concurrently with the MOU's execution. The Warrants will have an exercise price of $0.10 per common share which would represent an additional $6.0 million in funding to the company if fully exercised in the future. The price per share and warrants, and the exercise price per warrant, represent a 67% premium to the closing price of the Company's common stock on the trading day prior to the execution of the MOU. Further, the investor understands the need for additional capital to transition Biostage(BSTG) to a clinical-stage company.
BSTG Logo
Jim McGorry , CEO of Biostage(BSTG) stated, "Biostage(BSTG) has been in survival mode for the past two months since the failure to fund by a prospective investor that we reported in October. Over the past 60 days we preserved our technology by securing all the data, know-how and mission-critical resources. What has emerged is a smaller company with a reduced cash burn and with all critical functions, partnerships, know-how, and assets in place. Through the due diligence process we were able to demonstrate to the investor a focused plan with strong support from scientific advisors and collaborators. We will work with the investor to re-establish normal operations and fund the promise of the company's technology. This agreement is a fantastic next step forward. Our focus is on closing the private placement, funding and being back in operation at a more efficient size and structure. Or as I like to say, "back-in-business… better".
The Company expects the private placement closing and funding to occur later this month. Following the funding, the Company plans to schedule a business update investor teleconference.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Biostage(BSTG)
Biostage (BSTG) is a biotechnology company developing bioengineered organ implants based on the Company's Cellframe™ technology which combines a proprietary biocompatible scaffold with a patient's own stem cells to create Cellspan organ implants. Cellspan implants are being developed to treat life-threatening conditions of the esophagus, bronchus or trachea with the hope of dramatically improving the treatment paradigm for patients. Based on its preclinical data, Biostage(BSTG) has selected life-threatening conditions of the esophagus as the initial clinical application of its technology.
For more information, please visit www.biostage.com and connect with the Company on Twitter and LinkedIn.
Forward-Looking Statements:
Some of the statements in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These "forward-looking" statements in this press release include, but are not limited to, statements relating to the private placement, including the closing and funding thereof, development expectations and regulatory approval of any of our products, including those utilizing our Cellframe technology, by the U.S. Food and Drug Administration, the European Medicines Agency or otherwise, which closings, offerings, expectations or approvals may not be achieved or obtained on a timely basis or at all; or success with respect to any collaborations, clinical trials and other development and commercialization efforts of our products, including those utilizing our Cellframe technology, which such success may not be achieved or obtained on a timely basis or at all. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release, including, among other things, our ability to obtain the funding necessary for ongoing operations, our ability to obtain and maintain regulatory approval for our products and our ability to complete the private placement on a timely basis or at all; plus other factors described under the heading "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 or described in our other public filings. Our results may also be affected by factors of which we are not currently aware. The forward-looking statements in this press release speak only as of the date of this press release. Biostage(BSTG) expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.
Investor Relations Contacts: Tom McNaughton Chief Financial Officer 774-233-7321 tmcnaughton@biostage.com
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