August 20, 2021 5:21pm
What’s true, false, misleading, unresolved and unanswered issues with SLOPPY if any follow-through to date?
Critical issue: still subject to “Going Concern” label due to lack of financing, low cash position and “runway”
HUGE deficit to date: $70.2 million with NO clinical TRIAL initiation with a year and a one-half old approved IND … it’s NOT about COVID stoppage, there are NOT any clinical employees left and NO monies to initiate?
Current cash position: $451, 000.00 in cash
Total liabilities: $487,000.00
Total operating expenses: $918,000.00 in Q2/21
WHO are the auditors for this Q2/21 8-K and 10-Q or are these unaudited filings?
A failure to respond to legal proceedings of a terminal death suit against the company that initiated sanctions against it
A continued disclosure of ineffective financial controls and procedures
On-Going Legal issues - quotes:
On April 14, 2017, “representatives for the estate of an individual plaintiff filed a wrongful death complaint with the Suffolk Superior Court, in the County of Suffolk, Massachusetts (the “Court”), against the Company and other defendants, including Harvard Bioscience, Inc. (“Harvard Bioscience”), our former parent entity prior to the spin-off of the Company in 2013, as well as another third party.”
- “The complaint seeks payment for an unspecified amount of damages and alleges that the plaintiff sustained terminal injuries allegedly caused by products, including one synthetic trachea scaffold and two bioreactors, provided by certain of the named defendants and utilized in connection with surgeries performed by third parties in Europe in 2012 and 2013.”
- “This lawsuit relates to the Company’s first-generation trachea scaffold technology for which the (BSTG)Company discontinued development in 2014, and not to the Company’s current Celframe technology nor to its lead development Cellspan Esophageal Implant product candidate.”
Where did the management oversight FAIL?: Quote from 10-Q …
“On October 1, 2019, the Court entered an order granting plaintiffs’ motion to compel the defendants to produce discovery.”
“Subsequently, the plaintiff filed a motion for sanctions against the Company on January 6, 2020 claiming failure to produce the required discovery.”
“The Company’s counsel at the time, which had been selected for the case by its liability insurance carrier, never notified the Company of plaintiffs’ motion and never responded to plaintiff’ motion.”
WHO is steering this company …?
- “As a result of the failure of the Company’s (BSTG) former counsel to respond, on January 29, 2020, the Court entered an order allowing plaintiffs’ sanctions against the Company and the other defendants, which … establishes a sanction of admitted liability.”
“In June 2021, the Company (BSTG) was informed of these 2019 and 2020 court actions by … another i.e., new defense counsel appointed by its liability insurance carrier.”
- “On June 9, 2021, the Company, together with the other defendants, filed a motion to vacate the Court’s order allowing plaintiff’s motion for sanctions, and following a hearing on such motion, on August 6, 2021 the Court issued a ruling in our favor, vacating the sanctions.”
WHY was this material fact NOT disclosed to shareholders?
- WHERE is the current management’s OVERSIGHT and SUPERVISION on company issues; also, WHY have their “ADVISORS” not managed these critical legal issues especially since BSTG INDEMNIFIED their former parent, Harvard Bioscience (HBIO)?
BSTG believes “that receiving regulatory approval to treat pediatric esophageal atresia with our CEI may provide a shorter time to a commercial product and the greater overall potential value in the U.S. market. In addition to providing a novel solution for a great medical need, approval of our pediatric esophageal atresia product candidate may result in receipt of a priority review voucher, which if achieved, could potentially provide significant value and non-dilutive funding to Biostage in the future.”
BSTG has “continued to advance our CEI pediatric esophagus program and plan to file a protocol amendment with the FDA to update our CEI esophageal disease clinical program after the initial adult patients are treated in the esophageal disease trial, subject to FDA approval.”
- MISLEADING …
- According to the previous filed IND, multiple (4-6) patients must be tested even before … ANY subsequent pediatric IND could EVER be submitted. The words from the above paragraph … do NOT confirm the FDA approved procedures of clinical initiatives … that MUST be followed.
Evaluation of Disclosure Controls and Procedures:
“In connection with the preparation of this Quarterly Report on Form 10-Q, our management, under the supervision and with the participation of our President and Interim Vice President of Finance, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021.”
- “Based upon the evaluation described above, our President (Hong Yu) and Interim Vice President of Finance (Peter A. Pellegrino, Jr) have concluded that they believe our disclosure controls and procedures were … not effective as of the end of the period covered by this Quarterly Report on Form 10-Q due to the material weakness identified as of December 31, 2020 that … has not yet been remediated.”
WHY hasn’t BSTG IDENTIFIED the “not effective”, UNFIXED or “NON-REMEDIATED” the outstanding financial “issues”?
WHAT are they HIDING?