We have never mentioned Biostage Inc (NASDAQ:BSTG) (OTCMKTS:BSTG) on Street Register before, but caught notice of it today as the NASDAQ delisted its stock, and OTC Markets granted an immediate listing on the OTCQB. We’re witnessing a significant sell-off, and will be interested to see where it ultimately finds support.
Biostage is developing bioengineered organ implants based on the Company’s new Cellframe™ technology which combines a proprietary biocompatible scaffold with a patient’s own stem cells to create Cellspan organ implants. Cellspan implants are being developed to treat life-threatening conditions of the esophagus, bronchus or trachea.
It has been a busy week for Biostage Inc (NASDAQ:BSTG) (OTCMKTS:BSTG), and it certainly didn’t shape up to be an easy one. Not only has the company been relegated to a lower exchange, seeing a sharp drop-off in share price for the time being, but a key share purchase agreement seems to have fallen through, per the company’s most recent report, and is causing a note of confusion and uncertainty.
Saverio La Francesca, MD, began the week as President and Chief Medical Officer of Biostage and was set to present at the 2017 Cell & Gene Meeting on the Mesa on Thursday in La Jolla, CA. Instead, in the wake of this morning’s announcement, we are not sure if Dr. La Francesca provided a medical and scientific review on behalf of Biostage, as the plans called for earlier this week. Instead he gave his resignation over the following matters.
On August 11th, Biostage entered into a Securities Purchase Agreement with First Pecos, LLC on, 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. As of October 6, 2017, the Company had not received the Purchase Price from Pecos.
On October 5, 2017, the Company delivered a notice to Pecos and its manager, Leon 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. (Source: PR Newswire)
Dr. Francesca submitted his resignation as President and Chief Medical Officer of Biostage, presumably as a reaction to the falling through of the purchase agreement under the terms of which he would have become a board member. It was effective immediately on October 5th, the same date he was to present for Biostage at the conference we mentioned above. That’s why we are unable to ascertain if he indeed gave the presentation as indicated earlier.
At any rate, we’re mostly interested in BSTG as a potential bottom-bounce play. Once it finds support off of this sizable sell-off, there may be rebound opportunities there for the taking. We’ll stay up on any further developments with BSTG and pass them along to you! Stay locked on StreetRegister.com and be sure you’re signed up for our 100% free smallcap newsletter. It’s as easy as that! Simply submit your primary active email address in the box below. Subscribe now!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in BSTG stock, short or long.