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mylkvveed 52 posts  |  Last Activity: Jun 30, 2015 4:22 PM Member since: Jan 6, 2007
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  • Reply to

    A Slow Descent into Oblivion

    by jbpenco Jun 30, 2015 12:16 AM
    mylkvveed mylkvveed Jun 30, 2015 4:22 PM Flag

    Theoretically no news should actually be good news in that we haven't heard about any problems with the large animal trial. I wouldn't bet against the possibility that they've found a way to put off disclosing bad news but in theory no news should be good news and we did have management buying on the open market not too long ago.

    Doing a little looking into the large animal study it's stated purpose is to ensure that the procedure is safe for humans in an actual clinical trial. Since the procedure involves removing a persons trachea and replacing it with a plastic tube bathed in stem cells for a couple of days in a bioreactor that look like a table top rotisserie oven, it seems fairly reasonable to assume the FDA is going to want to see HART grow new tracheas in the large animals or at least grow them to a substantial degree before allowing HART to move on to clinical trials.

    Given investors entire stake in HART depends on getting into clinical trials and eventually FDA approval for their trachea product an issue with the large animal trial under way right now would have to be disclosed as a material event. Again I'm not convinced they haven't figured out a way to delay announcing bad news with the large animal trial but in theory no news should be good news. On the other hand if they do get to move on to clinical trials I would be extremely bullish as IMO HART will be required to put the cart before the horse and prove via the large animal trials they can regenerate tracheas. IE: the FDA probably won't allow HART into clinical trials unless they grow or substantially grow a trachea in a large animal such as a pig or goat. JMO.

  • Reply to

    mylkvveed

    by better3l Jun 26, 2015 9:49 AM
    mylkvveed mylkvveed Jun 30, 2015 10:14 AM Flag

    I fully admit to not knowing this companies model or products however they break even at a gross margin level. If that doesn't change no amount of sales will save them. The fact they sell for the cost to produce is probably part of the rationale to increase their ability to dilute from around 20M additional share to probably 200M. JMO.

  • Reply to

    mylkvveed

    by better3l Jun 26, 2015 9:49 AM
    mylkvveed mylkvveed Jun 30, 2015 9:02 AM Flag

    fred,

    Doing a joint venture for a company of this size and financial weakness would only make sense if the other party was putting up the funding to help develop CSBR's products, so I don't buy they're setting up for massive dilution in order to do a joint venture. Also a positive development that increased their share price would result in less dilutive financing.

    I've seen the substantial increase in shares outstanding coupled with the reverse spit before and it's done to allow management to do highly dilutive financings, which is not a sign management has any optimism about the future of the company. Of course everything except death and taxes are conjecture and conditions can change, however, IMO, the recent moves don't bode well for the foreseeable prospects of this company.

  • Reply to

    mylkvveed

    by better3l Jun 26, 2015 9:49 AM
    mylkvveed mylkvveed Jun 29, 2015 9:28 AM Flag

    better,

    There is a put option in the latest financing however it looks like it only triggers on a change of ownership. The $2M loan from management was converted into shares as part of this financing so they have paid themselves back. As I've said, I have no clue about the companies products and prospects and the recent financing isn't as bad as I initially thought, however the move to increase shares authorized while setting up for a reverse split is a sign that management does not see break even on the horizon and is gearing up for more dilutive financing in the future. JMO.

  • Reply to

    mylkvveed

    by better3l Jun 26, 2015 9:49 AM
    mylkvveed mylkvveed Jun 27, 2015 7:11 PM Flag

    I did a quick look into the reverse split and increase in shares authorized and can give you a brief synopsis.:

    There were 67M shares outstanding prior to the recent capital raise and 104M as of the day after the capital raise. $14M @ $0.4/ share get 35M shares and covers most of the increase.

    There were 125M previously authorized which would leave management with little wiggle room to raise additional equity based capital with 104M already outstanding (only 21M left to play with). Raising shares authorized to 200M should leave plenty of additional flexibility if this company were really on the verge of break even (as I saw mentioned in an earnings release).

    The reverse split just gave a range of options with specifics to be determined later. The options are 1 for 3 minimum and 1 for 15 maximum. Ballpark 1 for 10 and shares outstanding go from 104M to 10.4M with 200M authorized giving management almost 190M shares to play with for future equity based financings. I wouldn't expect to see the all used up any time soon but not a sign management sees a sustainable business anywhere in sight.

  • Reply to

    mylkvveed

    by better3l Jun 26, 2015 9:49 AM
    mylkvveed mylkvveed Jun 27, 2015 6:40 PM Flag

    As I stated before I only skimmed information as I don't follow this company and only have interest as the new CEO of HART came from this company. I have followed some really shady companies for entertainment purposes and while I'm not saying this is a shady company, I've seen the reverse split but increasing shares outstanding before and it's clearly meant to give management the ability to do highly dilutive fund raising. Obviously not sign management see's much hope on the horizon.

    Having only skimmed information I can't say for sure how the mechanics are set up however I saw the management financing and I think I saw mention of the recent financing being used to pay management back. I'm not positive so you should check for yourself but it's something to look into. I believe the financing was done at $0.4/ share which amounts to a ton of shares by itself however there was also discussion of a put option including provisions if the put option can't be paid.

    I'm not an expert on options however my understanding is the put option limits the downside for the recent investors guaranteeing a minimum price. My guess is the provisions for repayment via the put option if the cash isn't there is additional shares and more dilution. I've actually seen worse financings and the war chest of shares authorized is probably meant to cover future financings as well where terms will likely get worse. I can't tell you what to do just that from my experience the reverse split while significantly increasing share authorized is a clear sign management is gearing up for highly dilutive financing suggesting they don't see good things for the business on the horizon.

  • Reply to

    Mercy Killing Please!

    by mylkvveed Jun 25, 2015 3:31 PM
    mylkvveed mylkvveed Jun 25, 2015 5:41 PM Flag

    They filed an 8K announcing they needed more time due to issues with the large animal trial and went into specific detail about what caused the problem on the next cc. They discovered swelling on the scaffold near the end of that trial.

    Based on what they disclosed it was actually somewhat encouraging. The issue occurred at the end of the trial and swelling on the scaffold implies healthy tissue growth. I want to take this at face value but settling for plan B in regards to a new CEO has me worried about their credibility.

    If they can't grow tracheas they're not going to get FDA approval and this is a zero. If I'm going to have the rug pulled out from under me I'd prefer to just get it over with than drag this thing out. New management provides the perfect excuse.

  • Reply to

    Fred or anyone else

    by better3l Jun 23, 2015 2:40 PM
    mylkvveed mylkvveed Jun 25, 2015 5:24 PM Flag

    After I posted I skimmed that offering and it amounted to a sizable chunk of shares by itself however there is a put option and some provisions for how what to do if the company doesn't have the cash to cover the put option. My guess is if you dig down into the details this will result in the debt being converted to shares at a sizable discount to the market price thus the need for increasing shares authorized at the same time as they are reducing shares outstanding via the reverse split.

    I only took a quick peek so I'm going by memory however I think there are ~80M shares outstanding right now and 125M authorized. Again going by memory I think the reverse split is 10 or 15-1 which would result in less than 10M shares outstanding with shares authorized bumped up to 200M. That gives management plenty of room to dilute shareholders further in order to raise new cash. My guess is the put option in the recent equity offering will result in heavy dilution. Based on their cash burn it doesn't look like that money will last too long and they'll need to raise cash again in a year or so.

  • Reply to

    Mercy Killing Please!

    by mylkvveed Jun 25, 2015 3:31 PM
    mylkvveed mylkvveed Jun 25, 2015 4:31 PM Flag

    I was referring to the large animal trail not the compassionate care cases. They already disclosed a problem with the first animal (swelling on the scaffold) which necessitated starting over. By definition the large animal trial is conducted to ensure the procedure is safe for humans in clinical trials. Logic would dictate that would mean growing a new trachea to a substantial degree in the large animal. The issue with the first animal was disclosed at the end of January and I believe the second animal trial started around that time. They say the trial is 6 months putting the end of animal #2 trial at the end of July or early August assuming they started around the announcement of the first animal trial issues. Considering this trial is a prerequisite to getting into clinical trials, problems with this trial would be material events needing to be disclosed. Considering it's purpose is to ensure the procedure is safe for human clinical trials success should mean the grew a trachea in a large animal or at least grew one to a substantial degree.

  • mylkvveed by mylkvveed Jun 25, 2015 3:31 PM Flag

    A plea to the new management, you have a clean slate, if this company is built on the over active imagination of Dr. Macchiarini please do me and the handful of other investors who bought into the compassionate care "proof of concept" a favor and end the charade now and let us move on.

    The second large animal trial should be near it's end by now and even if all of the compassionate care evidence relies on Dr. M's disclosures you should know by now if the result of the large animal trial is a new trachea in substantial development or a plastic tube with dried up stem cells.

    My understanding of SEC disclosure rules suggest you should have told us by now if the latter scenario was the case but I don't rule out the possibility that you have found a way to game the disclosure rules to drag this out as long as possible. This company is a binary proposition on whether you can or cannot grow a new trachea. It does no one any good to delay the inevitable if you were duped by Dr. M and you can't actually grow a new trachea, so out of mercy I ask that you end this ASAP if that's the case.

    I haven't given up hope that you do have a real product and the fact that you haven't disclosed any issues with the second large animal trial at this point should mean you are growing a new trachea in the animal, however if it's not the case, please don't drag this out gaming disclosure rules to hide what will inevitably come out anyway. If you can't grow tracheas just disclose it, blame Dr. M or Dr. Green, and let investors move on. I feel like I'm damned if I do and damned if I don't. Bail now and kick myself if large animal #2 is a success story and you get into clinical trials. Don't bail and kick myself if my fears turn out to be well founded and the rug is eventually pulled out from underneath me.

  • Reply to

    Fred or anyone else

    by better3l Jun 23, 2015 2:40 PM
    mylkvveed mylkvveed Jun 25, 2015 11:16 AM Flag

    better31,

    Per my post above I know nothing about this company, however I can tell you that if they are doing a reverse split but increasing shares outstanding they are in survival mode and see no hope of a real business on the horizon. If you haven't already see the convertible financing, get ready for it. Most likely the holder will be able to convert at a constant substantial discount to the average market prices giving them a heads I win, tails I still win proposition. Lower prices just mean more shares when converted

  • Reply to

    Fred or anyone else

    by better3l Jun 23, 2015 2:40 PM
    mylkvveed mylkvveed Jun 25, 2015 10:56 AM Flag

    I don't know anything about this company other than a quick skim after an announcement that the new CEO at HART came from this one. I can tell you that if they are doing a reverse split but increasing the authorized shares outstanding they are preparing for massive dilution to raise more cash.

  • Reply to

    James McGorry is appointed CEO effective 7/6/15.

    by hwmccusker Jun 25, 2015 8:21 AM
    mylkvveed mylkvveed Jun 25, 2015 10:32 AM Flag

    Believe me cesium109, I'm a shareholder and want to see positive developments, however Green was the founder, CEO and COB of the former parent company HBIO which did $108M in revenues TTM and has a market cap of $185M and is a real operating company that's profitable. McGorry was an EVP at what looks like another developmental stage company with $8M in revenues TTM and a market cap of $51M.

    Once again no disrespect to Mr McGorry's skills and he may be a good or great manager but the explicit reason for pushing Green out the door was to get someone with clinical trial experience. Not only don't I see clinical trial experience but I'm being real generous in giving this credit for being a sideways move. The best thing about this move is that it's over with. The only good news is no bad news on the large animal trial.

  • Reply to

    James McGorry is appointed CEO effective 7/6/15.

    by hwmccusker Jun 25, 2015 8:21 AM
    mylkvveed mylkvveed Jun 25, 2015 8:44 AM Flag

    I don't see any clinical trial experience and it looks like a fall back after they couldn't get someone better. No disrespect to McGorry as he may be a fine administrator but was it really worth pushing Green out the door and keeping investors with not a lot to hang their hat on these days hanging for months for what looks like a sideways move at best? At this point the only good news is no bad news about the large animal trial.

  • Reply to

    Conference Call Questions

    by mylkvveed Jun 7, 2015 10:26 AM
    mylkvveed mylkvveed Jun 18, 2015 12:55 PM Flag

    I don't begrudge anyone making money on HART. Hopefully we both do well, you in the short term and me in the long term. If this works out the way I hope it will I'll have done exceedingly well. If it doesn't, I'll have learned a valuable lesson and probably won't be touching biotech's for a long time if ever again. I probably won't be reaching even if this does work out as I wouldn't have any interest in this except for the compassionate care cases. Right now I'm just praying these guys have more than just Dr. M's disclosures to them.

  • Reply to

    Conference Call Questions

    by mylkvveed Jun 7, 2015 10:26 AM
    mylkvveed mylkvveed Jun 18, 2015 10:10 AM Flag

    I get anxiety attacks and my mind goes blank leading me to babble while I try to calm down and compose myself and remember what I wanted to say (ala the one call I did participate in). Hopefully everything is addressed in the scripted remarks but I might try to overcome my fear if it looks like issues are not being addressed.

    I appreciate Cozy's concern and I do think it's genuine, however I haven't thrown in the towel on this one yet. I'd be lying if I said it doesn't bother me to see the shares get crushed but I didn't invest for the short term, I invested in the long term potential. There is a big silver lining in the lack of news lately in that we don't have an 8K disclosing any issues with the latest large animal trial. They announced issues with the first animal at the end of January and in listening to managements comments since they need to go the full 6 months with this one. That would put it at the end of July or early August, assuming they started large animal #2 at the time they announced the issues with #1.

    Given the entire investment in HART depends on getting through the large animal trial and into actual clinical trials, which would definitely make a problem with this trial a material event requiring disclosure, we should be safe assuming no news is good news in regard to the large animal trial so far. I would also imagine the expected end point of this trial would be a trachea regenerated to a fairly substantial degree if not fully regenerated and would amount to a more official proof of concept if they are allowed into clinical trials based on the large animal trial. IMO this one is going to play out for good or bad in the next year or so as it would seem HART will be required to put the cart before the horse just to get into clinical trials (if the purpose of the large animal trial is to ensure the procedure is safe for clinical trials). JMO.

  • Reply to

    Conference Call Questions

    by mylkvveed Jun 7, 2015 10:26 AM
    mylkvveed mylkvveed Jun 7, 2015 10:29 AM Flag

    4. Given the stated purpose of a large animal study is to ensure the procedure is safe for humans in an actual clinical trial is if fair to assume that the FDA is going to want something akin to an official proof of concept before allowing you to remove a persons trachea and replace it with a plastic tube bathed in stem cells? IE: will the FDA essentially want to see you grow a trachea before allowing you into clinical trials?

  • I'm fairly certain one of the people who regularly participate in the Q&A sessions used to post on this m.b. and may still follow it. It's also possible information gets back to management as well. I'm posting questions I'd like to have addressed in hopes of both they get asked and management has answers ready or addresses them in their scripted remarks. If no one else asks maybe I'll try to beat my fear of public speaking and ask myself.

    1. Given Dr. Macchiarini was involved in all of the compassionate care cases cited as proof of concept and his credibility is now officially impaired can you please provide detailed explanations of corroboration of the results of the compassionate care cases outside of Dr. Macchiarini's disclusures to you. The Scientific Journals are also apparently in questions so please go beyond them. Has anyone from HART examined the patients involved in the compassionate care cases to verify the results? If not, why not?

    2. In the past there was discussion about seeing vascularization in the regenerated trachea and I remember a discussion about a Mucosa (sp?) membrane. Can you please discuss the robustness of the regenerated tracheas and what proof (outside of Dr. M) you have of this. The way the compassionate care cases are promoted it sounds like you are growing a fully functioning normal trachea. Is that the case or does the trachea need to be maintained by other procedures as was alleged in the complaint against Dr. M in order to remain viable.

    3. What is the date of the end date of the 6 month large animal trial (when is the 6 months done) and what is the hoped for results in terms of the development of the regenerated trachea at the end of the trial. IE: should it be fully formed and functioning or less than fully formed. If less can you give us a description of what level of development you want to see in order to move on to clinical trials.

    CONTINUED...

  • mylkvveed mylkvveed Jun 5, 2015 10:32 PM Flag

    I'm glad to hear you are not being paid to promote HART. No offense to your business and at least if you were you left a clue about who you represent but paid promotion is a red flag to me. Results are what ultimately matter not messaging. In HART's case all the messaging in the world won't save them if all they produce is a plastic tube with dried up stem cells on it.

    In regard to the skeptics they're not "destructive" even though test is obnoxious. There is a need for healthy skepticism and reality checks. They're basic point that there is a lot of failure in the field of organ regeneration making it hard to believe a tiny operation like HART actually succeeded is not exactly without merit. If it weren't for the compassionate care cases I wouldn't give this one the time of day. I'm praying management really does have corroboration outside of Dr. M.

    That said it's been lonely on the optimistic side of the m.b. lately so well reasoned optimistic posts can't hurt either. Welcome to the m.b., the sides are now back to even at two a piece.

  • Reply to

    Vote of Confidence Continues

    by mylkvveed Jun 4, 2015 9:15 AM
    mylkvveed mylkvveed Jun 4, 2015 1:20 PM Flag

    Test,

    I once watched a documentary on people who drill holes in their own heads. I don't discount anything as "possible" and as I've clearly stated I ain't saying this is a shoe in for FDA approval. So don't put words in my mouth.

    In your own words:

    "the remote possibility these guys might not know what they are doing"

    I'm sure the science is complicated and difficult but judging the results should not be overly difficult. They've either grown something resembling a new trachea or they haven't. Outside of Dr. M making it all up and management lying about having corroboration outside of Dr. M including survival rates probably 26 months and counting by now; it's as you say a "remote possibility" these guys have zero to hang their hat on. again not saying FDA approval is as good as done but I highly doubt they have "ZERO" evidence of a regenerated trachea and that they would lie about vascularization knowing it's going to come back to haunt them.

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