April 21, 2021 8:58am

Maintaining Sell

MINORITY public shareholders are waiting, watching and weighing responses to MAINTAIN their RIGHTS

 

The past keeps casting aspersions on the reputation and integrity of Biostage (BSTG) as stock pricing continues to tumble; did they forget that transparency has its virtues?

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Biostage (BSTG) closed down -$0.28 to $1.00 with 6,816 shares traded after Monday’s -$0.06 (was down -$0.23 until minutes before the close) to $1.28 with 1,760 shares traded, Friday’s +$0.01 to $1.34 with 510 shares traded, Thursday’s +$0.16 to $1.33 with 224 shares traded and last Wednesday’s +$0.06 to $1.17 with 2,011 shares traded.

Question#1: WHO is in charge of clinical and pre-clinical development and WHICH members of the management team are left employed? Hasn’t that “person” left the company, thus …  WHO is in charge of clinical trial that has yet to initiate?

Question2: WHY the need to “promote” or “pump” the share price, is it further warrant execution?

Question#3: WHY the inclusion of this disclosure (from reading) in the 10-K, BSTG has “identified a material weakness in our internal control over financial reporting. Our ability to remediate this, our discovery of additional weaknesses, and our ability to achieve and maintain effective control over financial reporting, could adversely affect our results of operations, our stock price and investor confidence in our company.”

Question#4: BSTG must be glad to file the LATE Q4 and FY20 numbers; are they sure they have included all the PAST accounts payable and accumulated liabilities?

Question#5: WHERE is continued funding coming from? As of 12/30/21, BSTG had $1 million of operating cash, an accumulated deficit of $69 million, an IND that was approved for clinical initiation which has YET to START and a civil lawsuit over a deceased individual caused by tracheal implants and has to indemnify Harvard Bioscience?

Question#6: WHY has NOT a notice of “The top U.S. securities regulator adopting measures that would kick foreign companies off American stock exchanges if they do not comply with U.S. auditing standards, and require them to disclose any governmental affiliations” been included in 10-K disclosures? The Holding Foreign Companies Accountable Act, signed into law by then-President Donald Trump in December, is aimed at removing Chinese companies from U.S. exchanges if they have failed to comply with American auditing standards for three years in a row. The rules also require firms to prove to the SEC they are not owned or controlled by an entity of a foreign government and to name any board members who are Chinese Communist Party officials, the SEC said in a statement. The agency fast-tracked the rules around how companies should submit documentation because it was required to issue them within 90 days of the Act becoming law. Three (3) directors of BSTG, Jason Jing Chen (chairman of BSTG’s board of directors), Ting Li (Donghai Securities Co., Ltd) and Wei Zhang, MD (Peking University) all reside in China – what are their affiliations?

Question#7: An additional and lingering question regards the role of Lui, Dong Hai, chairman of Dixintong Technology Group (D. Phone, the largest smartphone retailer in China) and Mrs. bin Zhao, who resides in Weston, Ma. of DST Capital?

Question#8:  Has the principal investigator, member of the scientific advisory board, Dr. Christine Finck, MD, Connecticut Childrens hospital disclosed shares personally owned as her lab was funded by a SBIR grant from the Eunice Kennedy NICHD to BSTG and corporate GIFT of $1 million dollars (with $429,500.00 outstanding) spending and R&D reimbursements from BSTG? Are there issues of should a principal investigator own share in BSTG amid issues of accountability and the hospital and its CEO James Schmerling (also being a BOD member) both owning shares - disclosure?

Question#9: Transparency and disclosures have been affirmed to and by corporate signatures in the recent 10-K filing, are they on the same page with RSM US LLP, certifications by management and U.S. securities laws?

Question#10: WHERE is the next level of funding coming from, is it further warrant execution and the only cash generation for further funding? Will $1 million dollars left in the till last for another quarter?

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.