My concerns were conditional on the accuracy of the information on TSCN.
I have done a bit more research, the most informative was BLTI SEC filing:
edgar.whowhere.com
It appears that BLTI has indeed raised recently $4.4m through the sale
of convertible warrants totalling $5m (they have incurred $.6m in commissions and expenses ). They expect the capital to last through 1998 at the current burn rate. However the co. anticipates the need
to raise additional capital to support their filing expenses, clinical trials and increased marketing costs. No indication of how much they have in mind ( it will be raised through the eguity market ). Keep in
mind they currently have registered a total of 50,000 shares.
In the management discussion section they do confirm that the sales
in Germany have drastically declined, mostly in their laser products
department. The decline is explained by the BLTI attempt to restructure their marketing and distribution channels. Of course, the steep decline in sales combined with increase in marketing, filing and clinical trials expenses had a major impact on earnings and depletion
of working capital.
I still fail to see any insider activity.
However, I did see that CT base investment advisory firm has recently scouped up about $1.3m shares. Since 99% of the warrants have been already converted - not sure if it was a result of the conversion or they have purchased in the open market ( the stock was driven recently
to aover $5 - have to do more digging ).
Also, note the litigation proceedings, with the net result of BLTI patent being upheld, but they had to give up its applications in certain areas. Furthemore, the co makes a statement that they feel
their patent protection may be insufficient and competition may be able to design and build around their patents.
To sum it up, the current valuation must be factoring in BLTI success in at least some of the areas ( Laser brush, Germans, hard tissue ? )
At least in US, the obcession with fancy tooth brushes seems to be fading away if anything (judging by the advertising $ being spent,
# stores that carry them, etc. ).
Except, for 1 recent order, BLTI laser product sales in Germany ARE declining, and have been doing so for quite some time - a lot
longer than the recently announced distribution restructuring move.
FDA has never given an approval for laser hard tissue cutting, not
yet. Will BLTI be the first to get it ? Judging by the lawsuit they do
have at least some competition. Is there any research in the big Cos that we do not know about ?
On the bright side :
CT based investment advisory firm did get 1.3m of BLTI shares, although not clear how much they paid for it.
BLTI may have a market outside Germany and US even if they do not get FDA approval.
Laser Brush launch is definite and should give them a decent revenue
to keep them afloat for a while.
They also seem to have other products in the workings - like FlavorFlow TM, which they felt worthy being mentioned in their SEC filing. Mr. Skipard claims to be well informed directly by BLTI, why
was not FlavorFlow ever mentioned - is it too small a fish, or remote approval or too small a market or what ?
To sum it up:
the key to their success seems to be the FDA approvalfor hard tissue, at least that is where BLTI seems to be concentrating most of their effort and $.
For how long would the clinical trials have to run ? ( If all runs
smoothly and there no disappointing results ).
How much would they cost. (Even if approval is granted eventually and
the market turns out to big and no competition shows up, and no more
law suits, still there is a question of how much capital BLTI would need to raise in the meantime, what concessions to make to possible
partnerships, and how much the stock would suffer through dillution).
What are the prospects outside Germany and US ? |
