October 6, 2017 8:06am
BSTG has been delisted from NASDAQ effective 10/6/17 to trade on the OTCQB, Pecos investment is in the wind and that ain’t all, what a MESS!
Another nail in its cross of demise as CMO and President resigns while the company seeks any alternative ...
As previously disclosed, on November 18, 2016, BSTG received a notice from NASDAQ indicating it was not in compliance with NASDAQ's minimum bid price requirement, and on May 22, 2017, NASDAQ notified the Company that based noncompliance with that rule and with the $2.5 million minimum stockholders equity requirement, the Company's common stock would be subject to delisting.
BSTG requested a hearing with the Panel and, on July 10, 2017, BSTG announced that the Panel granted the Company's request for continued listing subject to a number of conditions, with the Panel's decision ultimately requiring that the Company evidence full compliance with all requirements for continued listing on The Nasdaq Capital Market by no later than November 13, 2017.
BSTG determined that as a result of the events described below, the Company could not regain compliance with The NASDAQ Capital Market listing standards by the deadline imposed by NASDAQ, and on October 4, 2017 the Company withdrew its appeal from the Panel.
BSTG has been advised by OTC Markets Group Inc. that its common stock will be immediately eligible for trading on the OTCQB marketplace effective with the open of business on October 6, 2017. The Company's common stock will continue to trade under the symbol "BSTG".
As previously disclosed in the Form 8-K filed by the Company on August 17, 2017, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with First Pecos, LLC ("Pecos") on August 11, 2017, pursuant to which the Company agreed to sell to Pecos, and Pecos agreed to purchase from the Company, shares of the Company's common stock, preferred stock and warrants for an aggregate purchase price of $3,055,500 (the "Purchase Price"). As of October 6, 2017, the Company has not received the Purchase Price from Pecos.
On October 5, 2017, the Company delivered a notice (the "Notice") to Pecos and its manager, Leon "Chip" Greenblatt III, stating that Pecos is in breach of the Purchase Agreement as a result of its failure to deliver the Purchase Price to the Company following satisfaction of all closing conditions in the Purchase Agreement.
None of the shares of common stock, shares of preferred stock or warrants that the Company would have issued under the Agreement were issued to Pecos, and the previously-reported appointment of Leon Greenblatt III of Pecos and Saverio La Francesca, MD, the Company's President and Chief Medical Officer, to the Company's Board of Directors did not become effective, as their appointment was conditioned upon consummation of the private placement pursuant to the Purchase Agreement.
On August 25, 2017, the last date on which Pecos should have delivered the Purchase Price, counsel to Pecos instead delivered a letter to the Company alleging that the Company was in breach of its obligations pursuant to the Agreement. Such notice requested that the Company agree to additional conditions to closing that were not included in the Purchase Agreement, including, among others, the appointment of Saverio La Francesca, MD as co-Chief Executive Officer of the Company.
BSTG believes that it is not, and was not, in breach of the Purchase Agreement, and that Pecos' notice was unjustified and without any legal merit or factual basis, and was delivered as a result of Pecos being either unwilling or unable to deliver the Purchase Price. However, in order to ensure receipt of the Purchase Price and preserve shareholder value, the Company notified counsel to Pecos in writing on September 1, 2017 that it intended to comply with the new conditions demanded by Pecos. Despite that, on September 29, 2017, Pecos requested that the Company enter into a Supplemental Agreement that introduced additional new demands. The Company again indicated its willingness to meet the new demands of Pecos.
The Bottom Line ...
Despite BSTG's timely efforts to meet each new demand of Pecos, Pecos has not met its obligation to deliver the Purchase Price.
BSTG believes that Pecos has acted in bad faith and, despite the satisfaction of all closing conditions, has no intention of delivering the Purchase Price as required by the Purchase Agreement. BSTG is reviewing all of its rights and remedies against Pecos that may be available to the Company.
As a result of Pecos' refusal to deliver the Purchase Price, BSTG is facing significant capital issues, as its current financial obligations exceed its cash on hand, and is exploring financing and other strategic alternatives.
BSTG is in discussions with its advisors regarding these alternatives and cannot provide any assurance that it will be able to obtain sufficient financing.
On October 5, 2017, Saverio La Francesca, MD resigned as President and Chief Medical Officer of the Company, effectively immediately – <it’s about time, he was the cause and correlation in my view of these troubles>.
I have MAINTAINED a SELL based on the erratic conditions within the company and its management team.