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Biotech / Medical : biocircuits BIOC
BIOC 1.010-11.4%Aug 7 4:00 PM EDT

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To: Craig Rodkin who wrote (42)7/19/1997 7:02:00 PM
From: Steve Robinett   of 65
Craig, et al,
I just got a letter dated July 3, '97 via my broker from BIOC. Evidently they failed to meet the performance benchmarks for the 2nd tranche of the April financing, i.e., placing 88 units. The April financing people pulled the plug on the deal but some of them went into a private placement (July financing) that gives BIOC about the same amount of money, about $5 million. This time, there are no performance requirements and the warrants are exercisable immediately at $.75. That has to be the volume we've seen recently, these guys flipping the warrants for a 50% profit.

As of 18 July 97, there are four new and very interesting Edgar filings. The 10Q/A2 states:
"On July 3, 1997, the Company closed the July Financing in which the Company sold 6,853,567 units at $0.75 per unit, each unit consisting of one share of common stock and one warrant to purchase one share of common stock at $0.75 per share. The warrants issued in the July Financing expire eighteen months after July 3, 1997, subject to certain adjustments. The July Financing resulted in gross proceeds to the Company of approximately $5.1 million. With these funds, the Company believes its cash resources will be adequate to satisfy its requirements until the end of the second quarter of 1998."

Will the $5 million get BIOC through to Q2 of '98? Only if they get a reasonable level of sales. The burn-rate is higher than $5 mill and all their filings say expenses are going up.
Share dilution and potential dilution is also going up, as is typical of last ditch efforts by a company to stay alive. For example, of interest is BIOC's failure to meet the performance guarantees in the letter of credit that got them a bank loan. This, too, was renegotiated, resulting in a reduction of funds available under the letter of credit by 2/3 to about a quarter million and lowering of the warrants associated with the letter of credit to an exercise price of $2 from $6.
Getting past $2/shr seems to me currently next to impossible. Even getting to it is almost impossible. Which, of course, doesn't mean you can't make a couple of bucks between $.75 and, say, $1-3/8
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