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MFLI, OPSY, BLKL, IOVE, BPAX, GETA, August 17 Daily Market Movers Digest Report from OTCPicks.com
(M2 PressWIRE Via Acquire Media NewsEdge) Our Stocks to Watch today include Muscle Flex Inc. (OTC: MFLI), Optical Systems Inc. (OTC: OPSY), Blink Logic Inc. (OTCBB: BLKL), The Italian Oven Inc. (OTC: IOVE), BioSante Pharmaceuticals Inc. (Nasdaq: BPAX) and Genta Inc. (OTCBB: GETA).
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MUSCLE FLEX INCORPORATED (OTC: MFLI) "Up 21.95% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/MFLI.php
Company Profile: http://www.otcpicks.com/muscle-flex-inc.htm
Muscle Flex Inc. brings new products to market using direct response TV infomercials specializing in the health, fitness, wellness and hygiene sectors. As well, Muscle Flex Inc. develops and creates general television content for network and cable television distribution. Muscle Flex's corporate strategy is to develop new and innovative products for sale and distribution via its proprietary direct response marketing system and the creation of television media and shows for general network and cable broadcast.
MFLI News:
August 17 - Muscle Flex Inc. Completes the Acquisition of the 'In the Raw ' Trademark After Successfully Defeating the WWE's 'Raw' Trademark Application 1,153,018 in Federal Appeals Court Ending a Multi-Year Dispute in Canada
Muscle Flex Inc. (OTC: MFLI) announced that it has completed the acquisition of the "In the Raw " registered trademark. The multi-year dispute between Muscle Flex's "In the Raw" and WWE's "Raw" trademark concluded in April of this year when Muscle Flex Inc. successfully defended its "In the Raw " trademark against WWE "Raw" trademark application 1,153,018 in a final Federal Court appeal by the WWE. Previously, on June 18, 2008, the Canadian Intellectual Property Office (CIPO) Opposition Board issued its final decision with respect to the WWE Canadian trademark application for "RAW." The ruling confirmed that certain wares listed in the RAW trademark application 1,153,018 were confusingly similar and thus lacked distinctiveness from the "In the Raw " registered trademark.
As part of its trademark victory, Muscle Flex Inc. is expediting the development of a diversified portfolio of "In the Raw " branded merchandise. Products include multiple lines of apparel, such as caps, T-shirts and workout wear, extreme sports, reality-based videos and related music. Future products will be marketed through direct response media as well as traditional retail distribution. Details of the Muscle Flex 'In the Raw' brand are expected to be released shortly.
"The defense of the 'In the Raw' trademark has lasted many years and our victory comes as no surprise," commented Danny Alex, CEO of Muscle Flex. "Now that the appeal process has concluded, Muscle Flex is beginning the process to monetize the many lucrative merchandising and future licensing opportunities of the 'In the Raw' brand that had to placed on hold during the time of the dispute. We also intend to vigorously enforce all of our rights to the Canadian 'In the Raw' trademark as well as seek damages and infringement on all unauthorized use of our brand in Canada."
Danny Alex, CEO of Muscle Flex Inc., continued, "We are now measuring the specific potential damages the WWE has caused over the years, including lost merchandising and licensing revenues of our 'In the Raw' brand in Canada and infringement. Muscle Flex is confident that its evidence proves undeniably that the WWE procured the sale and distribution of 'Raw' labeled products that infringed on the 'In the Raw ' wares and services over a period of many years. In 2002, we issued a Cease and Desist order that was ignored by the WWE as they continued to sell 'Raw' branded merchandise in Canada knowing that 'In the Raw' was a registered trademark in Canada and had been for many years prior. As well, there were many attempts to settle the case, all of which were routinely ignored."
In a press release date July 20, 2009, Muscle Flex Inc. disclosed that it was in possession of WWE "Raw" labeled items that it believes directly infringe on its 'In the Raw' trademark. Items include; various CDs, VHS tapes and a number of apparel items. According to the WWE's most recent reported financial quarter, combined sales of WWE's consumer products and digital media business segments produced $40 million in global revenues. In previous quarters, these numbers were even higher.
For additional information regarding the "In the Raw " trademark and details on the Federal Court and CIPO ruling, please visit our corporate website at www.MuscleFlexInc.com.
"Muscle Flex" and "Extreme Machine" are registered trademarks of Muscle Flex Inc., All Rights Reserved.
"In the Raw" is a Registered Trademark of Muscle Flex Inc. in Canada, All Rights Reserved.
OPTICAL SYSTEMS INCORPORATED (OTC: OPSY)
Detailed Quote: http://www.otcpicks.com/quotes/OPSY.php
Company Profile: http://www.otcpicks.com/optical-systems/optical-systems.htm
Optical Systems, Inc., through its operating subsidiary, Automotive Software Designers, Inc., develops technology and services for the automotive retail industry designed to maximize productivity and increase profits at auto dealerships. ASDI's flagship technology solution, Save-a-Deal, is a turnkey customer relationship management (CRM) tool for auto dealerships. Our business development center (BDC) provides a variety of services designed to help auto dealerships drive traffic to their showroom or Web site, retain customers and generate new streams of revenue.
OPSY News:
August 17 - Optical Systems, Inc. Hires Independent Auditors, Plans on Becoming a Fully Reporting Company
Optical Systems, Inc. (OTC: OPSY), a leading provider of software and services to the automotive retail industry, announced that the company has hired Gruber & Company, LLC to act as an independent auditor to the company, and to audit its financials for 2007 and 2008.
"Moving off of the pink sheets exchange and on to a higher, more recognized exchange is a top priority," said B.J. Grisaffi, Chairman and CEO of Optical Systems, Inc. "The audited financial information should allow us to create more visibility for our company, and more value for our shareholders."
The hiring of the firm coincides with Optical Systems' plans to become a fully reporting company and to list its shares for trading on the Over the Counter Bulletin Board.
Gruber & Company, LLC also provides a wide-range of advisory services on business subjects including: public and private mergers and acquisitions, due diligence, SOX policy design; internal controls procedures and systems, identifying financial risk and exposure; restructuring plans; and profitability studies.
"The listing of our stock on Over the Counter Bulletin Board represents the first of several building blocks to position Optical Systems for future growth," said Grisaffi.
BLINK LOGIC INCORPORATED (OTCBB: BLKL) "Up 311.76% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/BLKL.php
Blink Logic Inc. partners with ISVs to deliver SaaS Business Intelligence (BI) solutions to business executives in companies of all sizes. With the Blink Logic platform, ISVs can enhance their customer offerings to include powerful, yet easy-to-understand, reporting and analytics. Executives can leverage a full range of BI capabilities and actionable information to enable them to make better, faster, more informed decisions, in order to continuously increase revenue, customer satisfaction and profitability. Blink Logic is provided as a secure internet-based solution. By sharing the software, hardware, maintenance and support costs across tens of thousands of customers, Blink Logic delivers tremendous capability to its partners and their customers at a low monthly subscription price.
BLKL News:
August 14 - VistaComm Chooses Blink Logic as Platform for Their AG Retailer Information System (ARIS)
Blink Logic's Partnership with VistaComm Provides AG Industry with a Powerful Analytics and Reporting Engine to Measure KPIs
Blink Logic Inc., (OTCBB: BLKL), the innovation leader in Software as a Service (SaaS) Business Intelligence (BI) announced that it will power VistaComm's Ag Retailer Information System (ARIS) designed to help businesses identify, analyze and monitor sales and inventory KPIs. This dynamic, web-based system allows users to sort, query and segment individual product and services by customer as well as their respective profitability to their organization.
"By having 24/7 access to this type of information, our customers will be able to make intelligent and timely decisions that will help them become better operators and strengthen their customer relationships," states Troy Long, President of VistaComm. "Best of all, this system is designed and built based on requirements from each individual retailer, so it's all about what they want, when they want it."
With ARIS, retailers have a robust reporting and analytical engine, allowing them to slice and dice the data to take an in-depth look at sales and inventory in a myriad of ways. With Blink Logic's easy to use and intuitive dashboards, everyone from executives to operators can create their own views of the data in minutes.
"VistaComm and Blink Logic are providing a unique service to the Ag industry," says David Morris, CEO and President of Blink Logic. "Ag customers literally have volumes of reports they need to go through to measure performance. Now they can log-in and have all the information at their fingertips, saving them a tremendous amount of time and money. Being able to respond quickly to market changes, whether economical or environmental, is a key to success. It's a win-win for everyone."
ABOUT VISTACOMM LLC
VistaComm, LLC, through its AgriBusiness Division, is one of the leading Customer Retention Solutions Consultancy in the agricultural industry. VistaComm's staff - with over two centuries of experience in the agricultural industry - creating and applying solutions that encompass the latest in communication strategies and technologies. Its Ag Retailer Information System (ARIS)SM enables VistaComm to deliver custom relationship marketing and communication solutions to meet each client's needs. VistaComm provides turnkey publishing and technology solutions to 166 clients throughout the USA, and produces newsletters delivered to more than 260,000 mail boxes on behalf of its clients.
ITALIAN OVEN INCORPORATED (OTC: IOVE) "Up 41.38% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/IOVE.php
In February 1997, The Italian Oven, Inc. completed the sale of substantially all of its assets to the Italian Oven LLC, an affiliate of the Whitecliff Group, Inc., in connection with its filing for voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. Following the sale, The Italian Oven changed its name to Store Liquidation Company, Inc. Previously, The Italian Oven was engaged in the owning, operating, and franchising of Italian-style family-oriented casual dining restaurants in 16 states in the mid-Atlantic, midwest, southeast, and southwest regions of the United States; and in Australia.
IOVE News:
August 17 - An Unfortunate Natural Disaster Presents a Necessary Opportunity to The Italian Oven
The Italian Oven Inc. (OTC: IOVE) released information pursuant to Securities and Exchange Commission Regulation F.D. about its new subsidiary Richwood Eco Ventures, Inc.
Hurricane Felix devastated the coastlines of Nicaragua in late 2007 and destroyed over three-million acres of virgin rainforest, knocking over millions of trees. Initially, many companies and foreign governments vowed to come to the rescue. Time passed, but most did not step up to the plate.
The exception is a group of companies that already had a foothold in Nicaraguan timber and forest management including Rich Corporacion (created with support from the Ministry of Foreign Affairs of Denmark's DANIDA program), and TECA de Nicaragua (TEKNISA).
Rich Corporacion realized that the downtrodden trees needed to be harvested for wood and the land replanted. Rich Corporacion began projects to raise funds for local communities by harvesting the damaged trees and commercializing the wood. The projects included a partnership with Deutsche Gesellschaft fur Technische Zusammenarbeit GmbH (GTZ) of Germany to assist indigenous communities in the Tasabi Pri territory. Rainforest Alliance's Smartwood certification program will be utilized and full accountability implemented in accordance with Nicaraguan and international law.
The companies maintain a factory and showroom, two production warehouses, three storage warehouses, and a saw mill spanning twelve acres of property. Over 55 people are employed full time by the operation.
Nevertheless, millions of acres of damaged land remain uncorrected. To expand, Rich Corporacion turned to Italian Oven International for assistance. With IOVE's marketing and logistical expertise in both Europe and North America, it agreed to join with Rich Corporacion to establish additional exports. Hundreds of thousands of cubic meters of woods, such as mahogany, cedars, coralillo, pine, almond, Guapinol, nanciton, and coyote, are available. Examples of the wood can be seen at www.richwood.com.ni.
The Italian Oven and its subsidiaries formed Richwood Eco Ventures, Inc., and purchased capital stock in the Nicaraguan companies to establish a partnership protocol. As the majority of the Richwood timber is exported, REVI will directly market the wood throughout the world. The Italian Oven entities will own over 80% of REVI.
Additional information about this venture will be available on the Italian Oven's website at www.theitalianoveninc.com/richwood.html over the next two weeks.
BIOSANTE PHARMACEUTICALS INCORPORATED (NASDAQ: BPAX) "Up 12.76% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/BPAX.php BioSante is a specialty pharmaceutical company focused on developing products for female sexual health, menopause, contraception and male hypogonadism. BioSante's lead products include LibiGel (transdermal testosterone gel) in Phase III clinical development by BioSante under a U.S. Food and Drug Administration (FDA) SPA (Special Protocol Assessment) for the treatment of female sexual dysfunction (FSD), and Elestrin (estradiol gel) developed through FDA approval by BioSante, indicated for the treatment of moderate-to-severe vasomotor symptoms associated with menopause, currently marketed in the U.S. Also in development are Bio-T-Gel, a testosterone gel for male hypogonadism, and an oral contraceptive in Phase II clinical development using BioSante patented technology. The current market in the U.S. for estrogen and testosterone products is approximately $2.5 billion and for oral contraceptives approximately $3.0 billion. The company also is developing its calcium phosphate technology (CaP) for novel vaccines, drug delivery and aesthetic medicine (BioLook). Additional information is available online at www.biosantepharma.com.
BPAX News:
August 17 - BioSante Pharmaceuticals Reports 100% Protection From H1N1 Challenge When Using BioVant Adjuvanted Vaccine
BioSante Pharmaceuticals, Inc. (Nasdaq: BPAX) presented its H1N1 vaccine results at the Immunotherapeutics & Vaccine Summit in Providence, RI. BioSante's vaccine adjuvant, BioVant, increased the protective effect of vaccines for multiple flu strains, including a potential new vaccine against H1N1 (swine flu), which resulted in 100 percent protection from symptoms of illness, including weight loss, and death in animal studies.
The BioSante presentation, "BioVant Calcium Phosphate (CaP) Nanoparticles: An Effective & Safe Adjuvant for Influenza Vaccines including H1N1 and H5N1," showed that BioVant-adjuvant effectively enhanced the natural immune response to the swine flu, using a BioVant-adjuvanted matrix protein M1 vaccine, and to H5N1 (bird flu), using a BioVant-adjuvanted H5N1 vaccine delivered via intranasal administration.
The studies concluded that swine and bird flu vaccines using BioSante's BioVant may allow for availability of a greater number of lower-dose vaccines, due to its dose sparing characteristics, and intranasal administration could provide more convenient and wider distribution during a flu pandemic.
"The results of the BioVant-influenza studies suggest that BioVant can increase the efficacy of a potential adjuvant-enhanced H1N1 vaccine," said Michael Snabes, BioSante's vice president of clinical development. "The exciting prospect is that BioVant also may allow use of lower doses of H1N1 swine flu vaccines in order to stretch potentially limited vaccine supplies."
An adjuvant is a substance that, when added to a vaccine, increases the vaccine's effectiveness by enhancing the body's immune response. In multiple studies, BioVant has been shown to be safe and cause minimal dose-dependent inflammation at the injection site, and has been shown both to prevent the manifestation of allergic response, and, to effectively 'switch off' established Th2-T-cell-associated allergic reactions and potentially to be delivered via alternative routes of administration, e.g. intranasally.
GENTA INCORPORATED (OTCBB: GETA) "Up 6.41% in morning trading"
Detailed Quote: http://www.otcpicks.com/quotes/GETA.php
Genta Incorporated is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. Two major programs anchor the Company's research platform: DNA/RNA-based Medicines and Small Molecules. Genasense (oblimersen sodium) Injection is the Company's lead compound from its DNA/RNA Medicines program. The leading drug in Genta's Small Molecule program is Ganite (gallium nitrate injection), which the Company is exclusively marketing in the U.S. for treatment of symptomatic patients with cancer related hypercalcemia that is resistant to hydration. The Company has developed G4544, an oral formulation of the active ingredient in Ganite, which has recently entered clinical trials as a potential treatment for diseases associated with accelerated bone loss. The Company is also developing tesetaxel, a novel, orally absorbed, semi-synthetic taxane that is in the same class of drugs as paclitaxel and docetaxel. Ganite and Genasense are available on a "named-patient" basis in countries outside the United States.
GETA News:
August 14 - Genta Incorporated Announces Second Quarter 2009 Financial Results
* AGENDA Phase 3 trial in melanoma passes post-accrual futility analysis
* AGENDA results expected Fourth Quarter 2009
* Genasense in novel combination shows promising activity in melanoma
* Genasense 1-hour infusion initiated in melanoma
* Additional core patents issued for Genasense
* Tesetaxel trial shows early efficacy and safety
Genta Incorporated (OTCBB: GETA) announced financial results for the quarter ended June 30, 2009.
"The last several months have been extraordinarily important", said Dr. Raymond P. Warrell, Jr., Genta's Chief Executive Officer. "We now believe we will have sufficient financing that will enable release of primary data in our Phase 3 Genasense trial in melanoma. Certainly, past and recent studies of other drugs in melanoma have proved repeatedly disappointing. We believe our biomarker-directed approach, coupled with our uniquely targeted new drug, may transform the treatment of this illness and finally offer meaningful benefit for patients. We expect to release results from our Phase 3 study within the next 3 months, which if positive should comprise the basis for worldwide regulatory applications."
Genta management will host a conference call and live audio webcast to discuss the Company's financial results and recent corporate activities today at 8:00 am EST. Participants can access the live call by dialing (877) 634-8606 (U.S. and Canada) or (973) 200-3973 (International). The access code for the live call is Genta Incorporated. The call will also be webcast live at http:www.genta.com/investorrelation/events.html.
For investors unable to participate in the live call, a replay will be available approximately two hours after the completion of the call, and will be archived for 30 days. Access numbers for this replay are: (800) 642-1687 (U.S. and Canada) and (706) 645-9291 (International); conference ID number is: 22633873.
Highlights of the preceding quarter ended June 30, 2009 included the following:
AGENDA: Phase 3 Trial of Genasense in Advanced Melanoma
AGENDA is a Phase 3, randomized, double-blind trial that has completed accrual of 315 patients with advanced melanoma. The study is designed to confirm certain safety and efficacy results from a prior randomized trial of Genasense (oblimersen sodium) Injection combined with dacarbazine. AGENDA employs a biomarker to define patients who derived maximum benefit during the preceding study. Such patients are characterized by low-normal levels of lactate dehydrogenase (LDH), a tumor-derived enzyme that is readily detected in blood.
During the prior quarter, the Company released demographic information that showed good concordance of relevant patient characteristics between the prior trial and AGENDA. Moreover, the importance of LDH levels as a key factor associated with survival in advanced melanoma was independently confirmed by a publication from the leading European oncology cooperative group. An independent data monitoring committee completed its post-accrual analysis for safety and futility, and has recommended that AGENDA continue to completion.
Genasense Plus Novel Chemotherapy Yields Promising Activity in Melanoma
At the annual meeting of the American Society of Clinical Oncology (ASCO) in June 2009, investigators reported a high response rate and potentially extended survival in a pilot study of Genasense plus temozolomide and Abraxane (paclitaxel protein-bound particles for injectable suspension) (albumen bound). Of 18 patients with stage 4 melanoma and normal LDH, 7 (39%) had achieved major responses: one with complete response (CR) and 6 with partial response. Five other patients had maintained stable disease (SD) after at least 3 treatment cycles for a disease control rate of 68%. The most common side-effects were similar to those associated with the chemotherapy drugs used alone. Median survival was 14.7 months and 50% of patients had survived longer than 1 year. These data compared favorably with median survival reported in the prior Phase 3 trial of Genasense in melanoma with similar LDH criteria for dacarbazine alone (9.7 months) or dacarbazine plus Genasense (11.4 months).
This trial has recently been amended to incorporate the new 1-hour IV infusion schedule of Genasense administered twice weekly, instead of the 5-day continuous IV infusion schedule used in the Phase 3 trials. Initial results are expected in the Fourth Quarter 2009.
Genasense Market Protection Expected to Extend up to 10 Years from Launch
Assuming AGENDA results are both positive and sufficient to secure approval in Europe and the U.S., Genta currently expects to hold exclusive marketing positions for up to 10 years from potential anticipated launch dates. In the U.S., the Company expects to file for extensions of its core composition patent up to the maximum allowable times pursuant to Hatch-Waxman legislation. The Company has also filed and/or received patents or patent applications that are expected to raise additional barriers to entry for generic competitors. In addition to these patents, the Company expects to receive up to 10 years of market protection pursuant to applicable rules in Europe for new chemical entrants.
Tesetaxel Dosing Trial Confirms Preliminary Efficacy and Safety
Tesetaxel, the leading oral taxane in clinical development, is completing a confirmatory study of dosing on a once every 3-weeks schedule. Data presented at ASCO showed a favorable safety profile with a low incidence of serious adverse events, along with objective responses that have been observed at less than the maximally tolerated dose. The trial is expected to conclude accrual in the third quarter of 2009. Genta intends to explore additional dosing schedules while examining efficacy in diseases that are prioritized in the Company's clinical development plan.
Financial Information
For the second quarter of 2009, the Company reported a net loss of $43.1 million or $(0.63) per share, compared with a net loss of $738.4 million, or $(1,004.84) per share, for the second quarter of 2008. For the six months ended June 30, 2009, the Company reported a net loss of $54.1 million, or $(1.24) per share, compared with a net loss of $748.0 million, or ($1,060.69) per share, for the six months ended June 30, 2008. Net product sales of $69,000 and $131,000 for the second quarter and six months ended June 30, 2009 declined from their comparison period figures of $131,000 and $248,000, respectively, due to the continued absence of promotional support.
In June 2008 and in April 2009, the Company entered into convertible note and warrant transactions (described below). At the time of both transactions, the Company did not have sufficient authorized shares to allow for the conversion of the convertible notes and related warrants. The June 2008 transaction required that the Company seek stockholder approval to increase the number of authorized shares of common stock. The April 2009 transaction required that the Company effect a reverse stock split in order to accommodate the required number of shares. While the Company's stockholders approved an increase in the number of authorized shares of common stock in October 2008 and authorized a reverse stock split in April 2009, the results that are being reported today reflect that the Company was required to mark-to-market the liabilities for the conversion feature of its notes and warrants issued as part of the transactions up until the Company's stockholders approved the changes in the corporate structure. These liabilities change with the price of Genta's common stock, and these fluctuations have caused us to report significant expense in both reporting periods. All share and per share data included in this press release have been retroactively adjusted to account for the effect of a 1-for-50 reverse stock split for all periods presented prior to June 26, 2009.
Research and development expenses were $3.7 million for the second quarter of 2009, compared with $4.5 million for the second quarter of 2008. Expenses in 2009 declined primarily due to lower expenses on the AGENDA clinical trial and lower payroll costs, resulting from lower headcount as we reduced our workforce in April 2008 and May 2008 to conserve cash. Research and development expenses were $6.0 million for the six months ended June 30, 2009, compared with $10.9 million for the six months ended June 30, 2008. In March 2008, we entered into a worldwide license agreement for tesetaxel. Pursuant to this agreement, we recognized $2.5 million for license payments. Expenses in 2009 also declined primarily due to lower payroll costs, resulting from lower headcount, as well as lower expenses on the AGENDA clinical trial.
Selling, general and administrative expenses were $2.0 million for the second quarter of 2009 and $4.1 million for the six months ended June 30, 2009, compared with $2.6 million for the second quarter of 2008 and $6.2 million for the six months ended June 30, 2008. These decreases were primarily due to lower office rent, resulting from our termination of a lease for one floor of office space in May 2008 and lower payroll costs, resulting from the two reductions in workforce. In May 2008, to reduce its ongoing expenses, the Company reduced its office space. The Company's landlord received a termination payment of $1.3 million, comprised of security deposits, and will receive a future payment of $2.0 million on January 1, 2011. This agreement resulted in an incremental $3.3 million in expenses for the second quarter and six months ended June 30, 2008.
On April 2, 2009, the Company issued approximately $6 million of April 2009 Notes, and corresponding warrants to purchase common stock, issued our private placement agent a warrant and incurred financing fees of $0.7 million. The April 2009 Notes bear interest at an annual rate of 8% payable semi-annually in other senior secured convertible promissory notes to the holder, and are convertible into shares of the Company's common stock at a conversion rate of 10,000 shares of common stock for every $1,000.00 of principal amount outstanding. The deferred financing costs are being amortized over the term of the convertible notes. At the time the April 2009 Notes were issued, the Company recorded a debt discount (beneficial conversion) relating to the conversion feature in the amount equal to the proceeds of $6.0 million and is amortizing the resultant debt discount over the term of the notes through their maturity date.
On June 9, 2008, the Company issued $20 million of 2008 Notes, issued our private placement agent a warrant and incurred financing fees of $1.2 million. The 2008 Notes bear interest at an annual rate of 15% payable at quarterly intervals in notes of equivalent terms, and are presently convertible into shares of Genta common stock at a conversion rate of 10,000 shares of common stock for every $1,000 of principal. The deferred financing costs are being amortized over the term of the convertible notes. At the time the notes were issued, the Company recorded a debt discount (beneficial conversion) relating to the conversion feature in the amount of $20.0 million and is amortizing the resultant debt discount over the term of the notes through their maturity date.
On April 2, 2009, based upon a Black-Scholes valuation model, the Company calculated a fair value of the conversion feature of the April 2009 Notes of $67.8 million and expensed $61.8 million, the amount that exceeded the proceeds of the $6.0 million from the closing. With implementation of the reverse stock split, the Company had sufficient shares of common stock in order to permit conversion of all the April 2009 Notes. The Company re-measured the conversion feature liability at $25.0 million, resulting in expense for the second quarter of 2009 of $19.0 million and credited the conversion feature liability to permanent equity. On June 9, 2008, based upon a Black-Scholes valuation model, the Company had calculated a fair value of the conversion feature of the 2008 Notes of $380.0 million and expensed $360.0 million, the amount that exceeded the proceeds of the $20.0 million from the closing. On June 30, 2008, the Company expensed an additional $380.0 million to mark the conversion feature liability of the June 2008 Note to market, resulting in a total expense in June 2008 of $720.0 million.
The warrants that were issued with the 2008 Notes and the April 2009 Notes were also treated as liabilities, due to the insufficient number of authorized shares of common stock at the time that they were issued. On April 2, 2009, the Company calculated a fair value of $1.125 per warrant for the warrants issued with the April 2009 Notes, or a total of $20.8 million. With the reverse stock split, the Company re-measured the warrants at a fair value per warrant of $0.415 per warrant, or $7.7 million, resulting in expense of $7.7 million, and credited the warrant liability to permanent equity. The warrants issued with the 2008 Notes were initially recorded at a fair value of $7.6 million and were also re-measured, resulting in expense of $7.2 million in June 2008.
At June 30, 2009, Genta had cash and cash equivalents totaling $0.7 million compared with $4.9 million at December 31, 2008. During the first six months of 2009, cash used in operating activities was $9.5 million compared with $14.4 million for the same period in 2008, reflecting the reduced size of the Company.
On July 7, 2009, the Company entered into a securities purchase agreement with certain accredited institutional investors to place up to $10 million in aggregate principal amount of units consisting of (i) 70% unsecured subordinated convertible notes, or the July 2009 Notes, and (ii) 30% common stock. In connection with the sale of the units, the Company also issued to the investors two-year warrants to purchase common stock in an amount equal to 25% of the number of shares of common stock issuable upon conversion of the July 2009 Notes purchased by each investor. The Company closed on $3 million of such July 2009 Notes, common stock and warrants on July 7, 2009. On August 6, 2009, we entered into an amendment whereby, among other matters, certain accredited institutional investors who were parties to the July 2009 securities purchase agreement agreed to purchase $10 million of additional notes and warrants having the same terms of the July 2009 Notes, as well as shares of common stock, increasing their aggregate investment to $13 million. The terms of the April 2009 Notes enable those noteholders, at their option, to purchase additional notes with similar terms.
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Release of Liability: Through use of this website viewing or using you agree to hold OTCPicks.com, its operators owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. Neither the information presented nor any statement or expression of opinion, or any other matter herein, directly or indirectly constitutes a representation by the publisher nor a solicitation of the purchase or sale of any securities. OTCPicks.com has been compensated three thousand five hundred dollars from Dana Alex for MFLI advertising and promotional services. OTCPicks.com has been compensated one hundred thousand free trading shares by a third party for OPSY advertising and promotional services. OTCPicks.com has been compensated eight thousand dollars by the company for BLKL advertising and promotional services. For a complete list of disclosures go to http://www.otcpicks.com/disclosure-details.htm. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. The owner, publisher, editor and their associates are not responsible for errors and omissions. They may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. Any opinions expressed are subject to change without notice. OTCPicks.com encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and OTCPicks.com makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies or the information contained herein. OTCPicks.com and its affiliates are not registered investment advisors or a broker dealers. OTCPicks.com has been advised that the investments in companies profiled are considered to be high risk and use of the information provided is at the investor's sole risk. OTCPicks.com also advises that the purchase of such high risk securities may result in the loss of some or all of the investment. Investors should not rely solely on the information presented. Rather, investors should use the information provided by the profiled companies as a starting point for doing additional independent research on the profiled companies in order to allow the investor to form his or her own opinion regarding investing in the profiled companies. Factual statements made by the profiled companies are made as of the date stated and are subject to change without notice. Investing in micro-cap securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor's entire investment may be lost or impaired due to the speculative nature of the companies profiled. OTCPicks.com makes no recommendation that the securities of the companies profiled should be purchased, sold or held by individuals or entities that learn of the profiled companies through OTCPicks.com. OTCPicks.com owners may or may not hold positions in the companies that are profiled.
The information contained herein contains forward-looking information within the meaning of Section 27A of the Securities Act of 1993 and Section 21E of the Securities Exchange Act of 1934 including statements regarding expected continual growth of the company and the value of its securities. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 it is hereby noted that statements contained herein that look forward in time which include everything other than historical information, involve risk and uncertainties that may affect the company's actual results of operation. Factors that could cause actual results to differ include the size and growth of the market for the company's products, the company's ability to fund its capital requirements in the near term and in the long term, pricing pressures, unforeseen and/or unexpected circumstances in happenings, pricing pressures, etc. Investing in securities is speculative and carries risk. Past performance does not guarantee future results.
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