BioMatrix Scientific Group (OTCMKTS:BMSN) Again the Preferred Sub-Penny Bet
For three months now, BioMatrix Scientific Group (OTCMKTS:BMSN) seems unable to leave the double-zero price levels, despite some promising runs. We can safely decide that for now, this ticker has turned into a rather active short-term debt. On Wednesday, BMSN added 24% to its price, jumping to $0.003. 
Recently, the company filed its new financial report, to show how well its drug development process is going: 
- $10,684 cash on hand, down 86% due to operational expenses
- $147,844 accounts payable, increased on operational costs
- Still zero revenues
- $941,488 net loss
The company has cited mistakes in its September 2012 financial report, but the new data are not really different, still showing underfunding for the all too ambitious aims of the drug company. So far, BMSN is growing only due to paid promotions, although it was just promotions that lifted the ticker to unsustainable positions, only to have it crash and drift sideways at its current levels, with almost no chance of recovery in the near future.
Among the most active penny stocks, it is easy to always find a selection below a cent, a price that promises very fast growth in a short time, although also presenting the danger of sharp corrections. For BMSN, this means it is best to trade if you have a good estimation of speed and risk, and not believe the company’s longer-term promises.
Just a few days ago, the preferred underpriced bet was US Energy Initiatives, Corp. (OTCMKTS:USEI), a ticker that was lifted to great heights intra-trade, but had significant net losses at the closing of the markets. Another competitor is the long-promoted Cereplast, Inc. (OTCMKTS:CERP), another ticker suffering from the pumps in the past, but moving around the penny level these days.
BMSN has enough red flags, it needs to put its financial information in order, and so far there are no real boosters from the FDA. At the beginning of the month, the company was sent questions regarding one of its treatment protocols, but so far there is no deadline for answers, or for a response from the Agency. Favorable responses generally boost the stock of drug developers, though for BMSN at the current levels the effect may be minimal.
Another red flag for this stock is the CEO, David Koos, who managed to run the stock of Entest Biomedical Inc. (OTCMKTS:ENTB), keeping it depressed below 10 cents for years. In the case of BMSN, the hope for a true recovery is slim, as the sub-penny levels are the preying ground of pumpers and day-traders. So stay away unless you can afford to have your investment slashed in half.
