Bioheart, Inc. (OTCMKTS:BHRT) Shows Signs of Serious Hesitation
Bioheart, Inc. (OTCMKTS:BHRT) is a development stage biomedical company listed on the OTC Markets and if the latest press releases are anything to go by, they seem to be moving forward.
On February 24, they said that the CEO, Michael Tomas, is recovering nicely from an emergency heart operation that he underwent in December. They also announced that he took part in an important event which should bring his company some much needed publicity. A week later, Mr. Tomas issued his own update, this time concerning BHRT‘s operations. Apparently, the six month results from the Phase I trial that they’re conducting in Mexico are quite impressive. The management team reckon that progress is good and they seem convinced that they will have no problem with securing the regulatory approvals in the future.
Needless to say, the market reacted. In a matter of just five sessions, BHRT managed to jump up my more than 200% and on Thursday, it closed the session at $0.06 after logging a 52-week high of $0.08 per share. Everyone was expecting an even stronger surge for the end of last week, but unfortunately, it wasn’t to be. On Friday, BHRT registered a loss of more than 27% and closed the day at just over $0.04 per share.
Looking at the message boards, we can see that there are some people who are understandably worried about their investments. Others, however, claim that everything is going to be alright and that Friday’s drop is simply a consolidation that will facilitate a longer run in the right direction. So, who should you trust?
As always, you need to decide for yourself. On the one hand, the news does indeed sound good. If everything goes according to plan BHRT might actually start generating revenues and they could even make a profit from what looks like a clever piece of technology.
Bear in mind, however, that patience should be one of your virtues in case you decide to go for it and invest in BHRT in the long run. The latest 10-Q reads that they have not yet generated any material revenues and do not expect to do it for the next “year or two, if ever“.
You should, of course, consider the financial statement as well and we should note that it paints a grim picture. Here’s a rundown of the most important figures as of September 30, 2013:
- cash: $6,684
- current assets: $15,579
- current liabilities: $13.4 million
- no quarterly revenue
- quarterly net loss: $1.1 million
BHRT are in a desperate need for cash if they are to even continue with the trials and that, in turn, leads to another problem – dilution.
They increased the authorized capital from 195 million to 950 million shares in February 2013 and during the five months between August and November, they printed more than 110 million new shares. Most of the stock was issued as a conversion of notes and carried some tasty discounts. There’s still quite a lot of convertible debt outstanding and, considering the severe lack of cash, we won’t be surprised to see some more stock issuance in the coming months. Be sure to keep this in mind while making your final investment decision.
BHRT wasn’t the only ticker to experience a serious drop at the end of last week. ZAP (OTCMKTS:ZAAP) plummeted and incinerated more than 40% of its value while shifting nearly $3.6 million worth of shares. Bitcoin Shop Inc (OTCMKTS:BTCS)’s faith was pretty similar. It wiped out 46% of its market cap while registering a dollar volume just shy of $1.1 million.
