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   Biotech / Medicalbiocircuits BIOC


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To: cgl69 who wrote (40)7/8/1997 1:42:00 AM
From: Steve Robinett
   of 65
 
Greg, What you're seeing on the April 14th-15th insider buying--10 buys--is the first step of a three-step financing deal. Check BIOC's most recent 10-Q. It talks about the first tranche being completed on April 15th. Since they just announced today that the $5 million July trance was completed--the most important of the three steps because it will keep them alive another year--I expect to see another big chunk of insider buying in the July insider numbers. These people are getting a quick 50% for their money, shares at about a buck and one warrant per share for another share, dilution but, as I said in the above post, the money gives BIOC more time to try to grow up and become a real company. Now they need a good menu of tests and some docs to buy the whiz-bang tester.
Best,
Steve

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To: Craig Rodkin who wrote (38)7/15/1997 2:51:00 PM
From: Craig Rodkin
   of 65
 
All,

Nice volume today; and we're up to a buck. Is this due to the 2nd trench
or is this a prelude to next Q results due on the 23rd (or is it the 27th).

-Craig

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To: Craig Rodkin who wrote (42)7/15/1997 4:00:00 PM
From: Steve Robinett
   of 65
 
Craig, Just guessing but I'd say it's the 2nd-tranche-effect. Without it, they were deadmeat--delisted and gone to the pinks. With it, they live for another year. Combined with the Beckton-Dickenson deal, solving their sales and manufacturing problems so they can pay attention to expanding the test menu, this dog is starting to hunt.
I took a look at some of the back SEC filings. If I've got this right, it appears the 10 investors in the private placement financing deal put in equal portions. Among the 10 are the Pres and a couple of other insiders. That means over the last 4 month, each of them has ponied up about $600,000 to keep BIOC alive. I do like to see insiders putting more money in a company. Especially when they're buying in at about $1 and my cost is 13/16.
Best,
Steve

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To: Steve Robinett who wrote (43)7/17/1997 2:26:00 PM
From: T.L.Smith
   of 65
 
Pretty nice move today.

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To: T.L.Smith who wrote (44)7/17/1997 4:10:00 PM
From: Steve Robinett
   of 65
 
There does seem to be some interest. The question comes up now when any more good news will show up. We've had the Beckton-Dickenson news and the 2nd tranche of the financing that will, they say, keep them alive another year. The next news might--just guessing--have to do with an expanded test menu and that will take a while. Still, on a percentage basis, I'm happy.
Best,
Steve

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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."

edgar-online.com

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
Best,
Steve

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To: T.L.Smith who wrote (44)7/20/1997 4:33:00 PM
From: Steve Robinett
   of 65
 
T.L. et al #2

After skimming over BIOC's latest filings, especially the impact of their recent financing activities as shown in the July 18 S3/A, my opinion on whether this dog can hunt has again changed, this time, back to no. The financing has come at a terrible dilution price. With the equivalant of 25 million shares now outstanding and subtracting the company's cash (the $5 million and change from the July financing), I get a ballpark valuation--being generous--of about $.05/share, a burn-rate of about $3.5 million a quarter and the prospect of rising expenses.
Any thoughts? I only gave the filings a quick read and may have missed something.
Best,
Steve

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To: Steve Robinett who wrote (46)7/22/1997 11:13:00 AM
From: Craig Rodkin
   of 65
 
Steve,

I really don't think this is as bad as it appears. We needed the financing and we received it. We all knew shares would be issued for the second tranche thus diluting the value of shares, the problem is that they were at .75 and not a $1.

What we need is a 10Q with some sales and decreased spending. I expect sales to be down from expectations (we didn't meet the requirements for tranche #2), but to be promising due to the BD oral pact

I took a long weekend and just glanced at the paperwork today. I give everything a read today and comment tomorrow.

-Craig

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To: Craig Rodkin who wrote (48)7/22/1997 3:00:00 PM
From: Steve Robinett
   of 65
 
Craig,
You may be right but BIOC itself says costs will be rising. The current burn rate worries me. Staying alive until Q2 '98 may be a problem. Dilution worries me. 25 million shares. The hole they have to dig out of gets deeper. Even taking everything at face value, the company itself just lowered valuation again. In any case, we'll see.
I look forward to your thoughts after you check out the recent filings.
Best,
Steve

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To: Steve Robinett who wrote (49)7/23/1997 8:44:00 AM
From: Craig Rodkin
   of 65
 
Steve,

The only good news (and it's at face value only) is BIOC per share loss will be lower this quarter (dilution of stock).

Bad news time. The $5m July financing probably will last until Q4; this is providing that BIOC pick up sales of 80 units (400k) for Q2 and 200 units ($1.2m) for Q3. If and only if BIOC reaches these figures and they have no delays in manufacturing (Sept 1996), do they have an actual shot at staying alive without further financing.

During the readings what really surprised me was the total accumulated debt. On Dec. 31 it was $51.5m and on March 31 it was $55.1m.

BD won't help either. The "hand shake" contract doesn't start until 1998.

This stock might be good for rides from 3/4 to 1-1/2. I'm in at 7/8 now and will take profits on the next run. Then buy back when it trickles down again. I figure BIOC has 2-3 good runs left.

-Craig

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