Bioelectronics Corp (OTCMKTS:BIEL) Drops After FDA Meeting
Last Wednesday Bioelectronics Corp (OTCMKTS:BIEL) had another meeting with the U.S. Food and Drug Administration regarding the marketing clearance of its ActiPatch device. The company announced the outcome of the meeting on Friday in a new company update on its official website. Although BIEL is making progress with the FDA accepting its knee and plantar fasciitis studies as well as agreeing to exclusively review the back pain data from BIEL‘s UK Registry studies some investors were clearly not thrilled by the development – at the end of Friday’s trading the stock of the company had fallen back down to $0.001 for a loss of 16.67%.
The crash is far from surprising – BIEL is simply riddled with red flags and if the marketing clearance is once again being pushed back in time these red flags could get even more serious. Let’s start with the financial state of the company at the end of first quarter of the year:
• $22 thousand cash
• $939 thousand total current assets
• $5.87 million total current liabilities
• $528 thousand sales
• $457 thousand net loss
While not that many pennystock companies can boast generating over half a million in quarterly sales this achievement is simply not enough to offset the rest of the numbers found on BIEL‘s balance sheet.
The limited cash position, staggering working capital deficit and sizable net loss are simply overshadowed by the mind-boggling dilution of the common stock. After issuing 332 million shares as conversion of debt owned by St. John’s LLC. and 63 million shares for consulting services during the three months ended March 31, 2016, BIEL‘s outstanding shares reached 11.1 BILLION out of the 15 billion authorized. The printing of fresh shares could continue for quite a while – the convertible notes owned by IBEX, LLC. were convertible into 12.3 billion shares at the end of March while another 8.4 billion shares could see the light of day through the other related party loans of BIEL.
When doing your due diligence on the company you shouldn’t ignore the fact that back in February the Securities and Exchange Commission filed a complaint against BIEL alleging “an illegal distribution of purportedly unrestricted securities involving the sale of hundreds of millions of BIEL shares” by the company, IBEX, LLC, and St. John’s LLC.
In early trading today BIEL is sitting flat at $0.001 per share.