Baltbear on Finance markets are like marshmallows

sec filings:
in the 10k biotime asserts its reasoning in methodology is “per sec guidelines”.
however, on aug3, 2010, biotime was forced to acknowledge in writing that this is an unwarranted assumption: “the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.”

http://sec.gov/Archives/edgar/data/876343/000087634311000014/filename1.htm

does biotime care?
from today’s 10k:
:”Critical Accounting Policies

Revenue recognition - We comply with SEC Staff Accounting Bulletin guidance on revenue recognition.”

my conclusion? the same sec that couldn’t be bothered to checck bernie madoff’s dtc records has reasons to look at how biotime keeps its books.

heading towards revenue..not achieving it:
:”In 2011, ReCyte Therapeutics intends to begin to build a near-term revenue business by offering a service to reverse the developmental aging of human cells, and to generate blood and vascular progenitors, for cell banking purposes.”

in other words, “recyte” which has been priced into the winner’s column for 2 years, a substantial part of the trip from 2 to 4+ and amex listing, has no actual business in place after 2 years.
instead, having pulled in enough $millions from stockholders, it “intends” to “begin” something or other.
not begin it.
biotime asia:
very positive information for btx longs.
:”NMMI may increase its percentage ownership interest in BioTime Asia to up to 39% if”….
6 years out there is a $100mm gross in asia, or an ind in 2 years.
so…6 years from now (assuming 30% towards ebitda) biotime asia might be sending $30mm a year
back to alameda, for maybe 40 cents a share to the top line.
that would price biotime ~$6 —6 years from now.
an excellent reason to accumulate <2 net now.

now:
since however, btx is trading now at some proce or another, 2010’s actual numbers are the ones that count:
:”During 2010 … we spent $7,892,024,” on r&d.
:”Our net losses for the fiscal year ended December 31, 2010, … $10,103,872.
:”Future clinical trials of new therapeutic products will be very expensive and will take years to complete. ”
of course btx may find partners, tho it has a serious history of not being able to keep them.
but, very directly, to the extend there is partnership, there is reduced revenue upon success.
what is left to measure is btx’s ability to succeed on its own.
in what environment?
:”
Competing products are being manufactured and marketed by established pharmaceutical companies
“is a risk that our competitors may succeed at developing safer or more effective products that could render our products and technologies obsolete or noncompetitive.”
yup. indeed.
while mikey “intends to begin”, others are >>doing <<, using far better presuppositions and ontologival models, and are as a result in the marketplace.
:”
so???
:”It is likely that additional sales of equity or debt securities will be required to meet our short-term capital needs, unless we receive substantial revenues from the sale of our new products “…which, as noted, will not be happening anytime near today.

so… how long…how long, til that old train be gone??
:”At December 31, 2010, we had $33,324,924 of cash and cash equivalents on hand. ”

so, what is biotime “worth”"??

using the model i built a couple of weeks ago,
1x tangible book, plus
3x intangible >plus<
8x hex sales, >>>plus<<
50x stem sales
(and i cheerfully note that ben graham is rolling in his grave, but this is after all, a “story stock”)

$35mm
$<1mm
$5mm
—–
$41 mm
shares??? 40mm.

$1 a share.

so: a price range… $1-2. that’s all there is.

those who like this puppy, who buy the story for whatever corpsicle, stem cell, transhumanist reasons,
whatever personal health problems that might lead them to want biotime to succeed, that’s what’s there.

the rest is whore stock gaming, betting on ball games for the sake of the bet, blue devils vs. whatever.
there’s $$$ to be accumulated playing that game.
but that is >>not<< prudent speculation.
this is perhaps made utterly clear by looking at hextend, which works. hextend is a great product.

however, btx stock traded in the amex is not hextend. what does hextend do to prevent trauma in a portfolio?
hextend:
:”This change was made due to the fact that too much of the product was being distributed to ground troops for inclusion in field packs and was going unused beyond the expiration date, so a different pattern of distribution was deemed advisable. ”
since the >>primary<< benefit of hextend, the unique hypercalcemic electrolytes’ effect of trauma cascade is being deemed to be not cost efficient,
hextend is in trouble.
how come? assuming a cost per unit of <$18, and a seriously optimistic 6/1 waste ratio, the military is saying it sees < $126 worth of improved survivability and los in the product.
are there other indicators??
:”A Phase III clinical trial using Hextend in surgery, funded by Maruishi, was conducted in Japan, but work on the trial has not been completed. Due to the withdrawal of Maruishi “…
if the trials were at all favourable would maruishi have quit???
:”Summit will need to find a replacement sublicensee or other source of funding”
and >>>why<<< isn’t biotime paying for it???
the olny business based rational reason is that betting on a favourable outcome would generate less revenue than would be spent.
given this  week in tokyo, if hextend worked in surgery, would the japanese be desperate for it?
does the damage tally from japan show that the japanese are always willing to spend to ensure a better outcome in a crisis? clearly yes. the damage from the events is far less than it would have been in the usa, specificallly becuase of preventative spending over 60 years.

hextend revenues total world wide for 2010?
$1.2mm.. with the patent life on the serious downside.

biotime stock prospects?? about like hextend’s.

Posted under business

Rolling Stone, which has almost redeemed itself by paying attention to the economy for a change, had a recent article about the insiders from goldman-sachs taking a large bite out of the future faith and cresit of the government of the usa. sadly enough, as part of its maintaining its perpetual whininess, it describes some evil plot in which people who cannot put “credit default swap” into an intelligible sentence are being picked on by people who can.
my answer to those who complain that they do know what a toxic debenture is? learn or shut up. if people can be bothered to “research” the love lives of stevie nicks and lindsey buckingham, they can learn to keep track of how the economy works.

When the prudent speculator is testing a story stock, it is usually quite useful to look for so-called stock boards, like
http://messages.finance.yahoo.com/mb/BTIM.OB
where the legitimacy of the views being put forth by present holders can be tested.
another might be:
http://moneycentral.msn.com/community/message/topicsandtickers.asp?Symbol=BTIM
o. look. msn doesn’t bother with stocks kicked off the national exchanges and lurking around on bulletin boards.
john f. kennedy once said about lobbyists of varying kinds, “where there is smoke there is a smoke machine.”
on penny stocks there is an entire smoke industry (which oddly enough, does not ave an naics number). a way to hunt down the smoke from the fire is to look in filings for “investment services” being documented with transfers of stock or cash (sometimes both) t create “buzz.” that buzz will first go to preferred suckers on the phone, then to less preferred subscribers to “investment letters” and once that’s in place, then to whatever stock board or chat room somebody can post to.
a clue to such posters is that they generally refer to any discussion of th story or the fundamentals  as “paid bashing” by “evil shorts” etc.
the saddest cases happen when somebody who thinks equities trading is like football fandom becomes a brain dead cheerleader for the story, and continually hhypes about some future price, like..5, or 12..or “when the puppy is on the nasdaq national market” and offers that as the only dd he has. thirty years ago, when penn state et al were starting the snowball rolling, fleetwood mac sang about breaking a chain,  a story believed without due diligence.

Posted under business

someone suggested to me that i was paid to bash biotime (btim.ob). i replied that the paid bashing on the net was being done by steven seinberg, chief financial officer (cfo) of biotime, in posts to the securities and exchange commission.  it is of interest possibly to note that  some anonymous person publicly stated a day or 4 ago that biotime was about to receive a $5mm grant.  That’s the kind of world where bucket shops and boiler rooms thrive: people doing honest analysis must be “paid bashers” while people doing mindless and dishonest cheerleading to protect teir positions are considered “loyal shareholders.”
here’s an example f what i mean:

the 8k filed on 0417 describing what happened on 0415:

The maturity date of our Revolving Line of Credit has been extended to December 1, 2009 with respect to $2,669,282 in principal amount of loans. (a revolving line of credit for $2.669mm got a new date, 7 1/2 month away.)

“We repaid $223,834 of principal and accrued interest on loans that matured on April 15, 2009 and were not extended.
(some part of the credit line was shut off, and paid out. does biotime bother to be honest enough to say which part?)

” In addition, certain lenders exercised their right to exchange $572,404 of principal and accrued interest on loans for an aggregate of 473,131 of our common shares.”
Does biotime bother to say how much of the $572k was principal and how much interest?  some loans were at 12%.
if one speculates that 12% is the figure, and 1 year the time period, then the lender lost oportunity for 1 year on apx $511k, and then was traded for 473k shares, for a basis of 1 3/32 ish…. ($1.08).
And actually, its worse than that. How??
becuase, to use a term from aother world, biotime had to pay vigourish on the loan. it was forced to give for free  91,526 shares, based on a 6% iterest rate, to the lenders.
91,526 is therefore 6% of what? 6% of the $2mm comes to $160,156. and that converts to 91,256 shares how? on a basis of 1 3/4 ($1.75 a share).
does this sound like an invented number?
biotime identifies this number:
“Promissory notes that were exchangeable for our common shares at a price of $1.50 and Embryome Sciences common stock at $2.50 until April 15, 2009, may now be exchanged for our common shares at $1.75 per share”
and i offer that as evidence of the soundness of this analysis.

a coupl;e of days later 14ds were filed with the sec, and the movement from the dtc to the recipients had to cross the tape. it crossed it at prevailing prices f the moment, cuasing some to see a “rally” which they traded into and or out of.
However, the idea that the buyers actually paid anything more than is stated above is a fiction.
Biotime would, imho, have a moral and fiduciary duty to identify it as a fiction.
Did it?
ask the reporters who called (or were they called??) what the ceo, dr michael west said.
then the prudent speculator has a metric for the integrity of the “science” of biotime.

the “good news” in this 8 k is that the exchange price isn;t 16 cents.
the hoest news is that this is the 5th amendment to a credit agreement that is nowhere near being retired, and there is no evidence in the 10k as to how it ever will be.
bottom line?
people buying biotime stock are not buying equity in biotime, bcuase there is no equity except patents 1/2 way thru their life.  they are supporting the acquisition of biotime by al kingsley and neal bradshear, who are paying next to nothing for it.

” We may borrow up to an additional $830,718 under our revolving line of credit if we elect to do so and are able to obtain additional loan commitments from our current lender or from new lenders.”

notice how bio time cannot, unnder thee covenenants borrow $1 mm from somebody new.
notice how biotime evidently needs permission from the current creditors to eve look for financing, up to the $830 mark.

Posted under business

here are the highlights of the 10k–which came out amazingly “early”. of course that can have nothing to do with my woofing about the biotime habit of waiting til the last minute.
The number of common shares outstanding as of February 26, 2009 was 25,213,569
that’s a 3 million share increase.
“As of March 10, 2009, there were 6,676 holders of the common shares”
was that increase in authorised discussed at the last annual meeting?
when was the last annual meeting?
“We intend to submit that amendment to our shareholders for approval at our next annual meeting.”
:” Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.”
lolol…
for thoughts on accounting and filing with the sec, see
http://baltbear-on-finance.com/stock-market-speculating-is-a-hold-up-shoot-them-with-x-barrels

and  lookie lookie…some amusing info about “big al’s basis”. wunderbar:
:”We paid Greenbelt $90,000 in cash and issued 200,000 common shares for services rendered for the twelve months ending March 31, 2007.  Greenbelt permitted us to defer until October 2007 paying certain cash fees that otherwise would have been payable earlier in the year.  In return for allowing the deferral, we issued Greenbelt an additional 60,000 common shares.  For the 2008 calendar year, we agreed to pay Greenbelt $135,000 in cash and to issue 300,000 common shares.  Greenbelt permitted us to defer paying the entire $135,000 cash fee until January 2009.  In return for allowing the deferral, we issued Greenbelt an additional 60,000 common shares during January 2009.  We have agreed to file a registration statement, at our expense, to register Greenbelt’s shares for sale under the Securities Act of 1933, as amended, upon Greenbelt’s request.  We also agreed to indemnify Greenbelt and its officers, affiliates, employees, agents, assignees, and controlling person from any liabilities arising out of or in connection with actions taken on our behalf under the agreement.

ok, 620k share at a basis of…..zero.
zero.

and: $225,000 in cash.
so, here’s the algebra problem:
a train leaves the nasdaq at 9:30 in the morning with 620k shares which can be sold at any price at all, and bought back at any price less than sold for;
a train leaves park avenue with $225k cash
to buy stock at any price and sell it for any amount more than was paid for;
what is big al’s  basis?
the answer?? 0 on more and more of the shares in his control+ 9% profit after trip tickets are paid for+ $225,000 in cash.
extra credit question:
if late comers to biotime should have to pay 4x more than al pays, what should be their basis?

Since inception, we have primarily financed our operations through the sale of equity securities, licensing fees, royalties on product sales by our licensees, and borrowings.

our total research and development expenditures were approximately $1,700,000 and our administrative expenditures were approximately $2,600,000.
The Credit Agreement permits us to borrow up to $3,500,000, and as of March 6, 2009, BioTime had outstanding Credit Agreement loans of $3,330,000.

Current loans under the Credit Agreement bear interest at the rate of 12% per annum and will mature on April 15, 2009, at which time the outstanding principal balance of the loans plus accrued interest will be due and payable.

Currently, lenders may exchange their notes for our common shares at prices ranging from $1.25 to $1.50 per share,

and our ability to commence and complete the clinical trials that are required in order for us to obtain FDA and foreign regulatory approval of products, depend upon the amount of money we have.

so, taking “big al” lol..out of th equation, what is there for fair market price in the opinion of those who have access to serious due diligence???
1 1/4–1 1/2 ….divided by 1.12.

hmmmm.
that put’s a price amusingly close to 1 3/8..which got defended as a raw marker…
and verrry close to 1 5/32….right where the defense kicked in.

so, those who see that hextend >>>works<<< and give a dang aobut that;
who see that hetacool therefore >>might work<<;
who think that “dr west” matters one way or the other;
and who can overlook an over 20 year trip to the gorss receipts level, and overlook the r&d/g&a of this puppy;
now know what price to pay.
there are 2 ways to pay it:
call them up and ask when they are getting ready for the next level of dilution (which is alread oocurring by seling embryome stock)
or trade this puppy into accumulation s that u end up with shares closer to “big al’s” basis.
so..what is big al’s basis???

anybody notice what this burst of news, did for volume?? 9k thru 2 pm…another 7k tossed back and forth in the last 30 minutes to to create illusion?
http://finance.yahoo.com/echarts?s=BTIM.OB#chart2:symbol=btim.ob;range=1d;indicator=bollinger+ema(20,50,10)+psar+ke_it+volume+rsi+volumema(10);charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
anybody notice that the whole “sector” as a “story” play now rests on the spines of 8 rats?

Posted under finance