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Advanced Cell defaults on debt

  • Holders of the Senior Secured Convertible Notes due June 30, 2015 send Advanced Cell Technology (ACTC) a notification of default citing the firm's failure to deliver shares of common stock to them within three days of a conversion event. The Event of Default gives the Note holders the right to the immediate repayment of the $1.2M balance.
  • The Notes were issued as part of a settlement agreement among the parties consummated on January 11, 2013 whereby the company granted a security interest in virtually all of the company's assets as a condition of the financing.
Comments (48)
  • MichaelJ8
    , contributor
    Comments (751) | Send Message
     
    and it begins
    21 Apr 2014, 05:43 PM Reply Like
  • eigenman
    , contributor
    Comments (131) | Send Message
     
    Fairly typical of how management has run this company over the years. My guess is that CAMOFI will be getting a whole lot more than $1.2MM in the form of a full ratchet anti dilution share give away. Next up is the Aronson Gorton law suit. But according to most ACTC shareholders that will be different for some reason. I'm not sure who is worse the management or the shareholders.
    21 Apr 2014, 05:45 PM Reply Like
  • MichaelJ8
    , contributor
    Comments (751) | Send Message
     
    well.. when you say management... you mean the old management right?

     

    I hope ACTC can hang in there. Bankruptcy is probably going to happen...
    21 Apr 2014, 05:52 PM Reply Like
  • eigenman
    , contributor
    Comments (131) | Send Message
     
    Well this management seems to have forgotten to pay CAMOFI, so I stand by my original statement. These guys are the Keystone cops of Regenerative Medicine. CAMOFI now owns ACT's IP. They can hold it hostage as long as they like and will no doubt get a King's ransom for it.
    21 Apr 2014, 08:17 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    BK won't happen if Lincoln Park thinks its investment will pay off in the long run. They'll simply loan the 1.2M and be done with it. If that financing drys up, it's over, unless they can file CH13, but they still need capital to finish their trials.

     

    And, also, fine, they successfully sue ACTC and cause it to BK, and they get nothing because the company is worthless. All trials stop. No publications. They would then liquidate any patents, and then the creditors may get some money back, in years, and years, and years of litigation.

     

    On the other hand, it might be best. Once ACTC is BKed, and all of the patents sold off, the trials can start again with another company. I can see it now, "XYZ BioCorp buys all patents to ACTC MD technology, publishes all trial results in nature. MD virtually cured!" The very next day, XYZ opens at $15.00. Everyone involved gets rich, except share holders of ACTC, who lose everything.
    21 Apr 2014, 07:54 PM Reply Like
  • toosmarttofail
    , contributor
    Comments (618) | Send Message
     
    By itself, this means very little. It's a $1.2m payment they can easily make.

     

    If you're not in the stock already, tomorrow's your chance to get in cheap. If you are in already, you can cut bait with 50-75 percent of your money, or ride it out. I don't see the stock dropping below 4 or 5 cents, and I do see it rallying as this mess is cleaned up.

     

    Oddly, one *good* thing about this "default" (more like a missed payment) is that ACTC's intellectual property is tied to these notes, and I somehow don't think the company is going to give that up. Were the debts not secured this way, bankruptcy would be a much greater option.

     

    Whether or not this was "strategic," it's still bush-league, and management should be fired immediately for this. Yes, this is a risky stock, and yes, investments carry risk, but what they're doing to investors is horrible. Other public companies have been sued by shareholders for doing much less.
    21 Apr 2014, 08:13 PM Reply Like
  • Dudeman1
    , contributor
    Comments (3) | Send Message
     
    Eigenman-Why do you continue to bash this company when you completely sold out?
    21 Apr 2014, 08:24 PM Reply Like
  • jrg1951@aol.com
    , contributor
    Comments (19) | Send Message
     
    Stay in or get out Dr Lanza is the man he will make this stock work!
    21 Apr 2014, 08:59 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Dr. Lanza doesn't even have a contract with them. He can walk over to the competition, which buys the patents, anytime he wants.
    22 Apr 2014, 09:42 AM Reply Like
  • Diluted Kool Aid
    , contributor
    Comments (3) | Send Message
     
    Ouch.

     

    (1/11/13 10-K)

     

    "If an event of default occurs under a Debenture, at the election of the Holder of such Debenture, such Debenture may be declared accelerated, in which case the greater of the amounts calculated in accordance with the following formulas shall become immediately due and payable: (a) 120% of the principal amount of the Debenture to be prepaid plus 100% of the accrued and unpaid interest; or (b) the principal amount of the Debenture to be prepaid divided by the Conversion Price (calculated either on the date acceleration is demanded or due or the date the accelerated amount is paid in full, whichever is less) multiplied by the closing price of the common stock (calculated either on the date the acceleration is demanded or due or the date the accelerated amount is paid in full, whichever is greater). Commencing 5 days after the occurrence of any event of default that results in the eventual acceleration of the Debenture, the interest rate on the Debenture will accrue at 18% per annum. For purposes of the Debentures, an event of default includes certain events that are customary for debt instruments of this type (including certain cure periods as set forth in the Debenture) including the failure to pay any amounts due under the Debenture when due, the failure to observe covenants and obligations under the Debenture, default under other debt instruments in an amount exceeding $150,000, the cessation of the quoting of the Common Stock on a trading market, the occurrence of a change of control transaction or other certain substantial transactions, the institution of bankruptcy or similar proceedings or the failure to have a registration statement covering the common stock underlying the Debentures effective within 180 days after the Closing (in accordance with the registration rights agreement described below)."
    21 Apr 2014, 08:26 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    " For purposes of the Debentures, an event of default includes certain events that are customary for debt instruments of this type . . .the cessation of the quoting of the Common Stock on a trading market"

     

    They have 5 days or OTC may stop listing them. The 8K was filed on the 17th. Today is the 5th day. Could be a black screen tomorrow. Given that, I'd not be surprised to see a massive, and I mean massive sell off today. This should have been disclosed in the last announcement too. It was far too important to leave out.

     

    Down around 13% from yesterday's close. :(
    22 Apr 2014, 09:50 AM Reply Like
  • dawndale
    , contributor
    Comments (33) | Send Message
     
    My investment, at 0.06 per share, is small, but my interest has been in what they were trying to accomplish without destroying embryos. R & D is always with risk and if somehow their efforts will one day help others, then it is worth it. Where would the world be if people like Salk hadn't tried? Or those who made the first heart valve? Yes, I invest in some of the well known, but there is value in supporting the little guys.
    21 Apr 2014, 08:27 PM Reply Like
  • iamaverb
    , contributor
    Comments (17) | Send Message
     
    We registered and set aside 250,000,000 shares at the time of the settlement for the settlement. There is a grand plan which we are not privy to.

     

    People like eigman need to get a grip on themselves. He has stated over and over he no longer has a dog in this fight and only stalks the boards Yahoo style.
    21 Apr 2014, 08:32 PM Reply Like
  • toosmarttofail
    , contributor
    Comments (618) | Send Message
     
    "Grand plans we are not privy to" don't belong in publicly-traded companies that had to miss a debt payment. The purpose of the SEC and the publicly-traded markets is to avoid this garbage. If I want that type of chicanery, I know where the racetrack is.
    21 Apr 2014, 09:23 PM Reply Like
  • iamaverb
    , contributor
    Comments (17) | Send Message
     
    It would be a matter of posturing yourself to win the battle with A/G before you step into the court room.
    22 Apr 2014, 01:38 AM Reply Like
  • Noreika
    , contributor
    Comments (485) | Send Message
     
    You guys can say what you will about Eigenman, but he made some decent points over the years calling the January ACTC pumps. We've been seeing that trend for some time. (Of course my average buy-in is 9 cents because I can never time anything).

     

    I'm hoping the stock drops to a nickel so I can finally take a nice, full position. As the die hard longs say, 'I believe in the science.'

     

    Good luck longs.
    21 Apr 2014, 09:08 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Nor,

     

    Please don't do that. It's not the science you're investing in. It's the company. And currently, they may delisted and or file Chapter 13. I'd for sure wait a few days to see what shakes out.

     

    Hint: The longer it goes without any sort of information, the worse it is. I say that because if they have a solution, it will need to be filed through a 8k or similar report.

     

    I've seen this sort of similar thing before about holding because of whatever notion, when the company goes dark and releases no information. That's because they are busy getting their ducks in order to file BK. If we don't hear anything today or tomorrow, well, it may be because the Fat Lady is singing, and I hope I'm wrong, but it is what it is.
    22 Apr 2014, 09:56 AM Reply Like
  • Noreika
    , contributor
    Comments (485) | Send Message
     
    I appreciate the words of caution DW. I'm definitely a watcher at this point though. It will be interesting to see if it breaks a nickel.
    22 Apr 2014, 06:28 PM Reply Like
  • Loerke
    , contributor
    Comments (12) | Send Message
     
    Just from personal opinions is it worth it to continue to stay long? I've read so much about the science behind this company and I believe what they're trying to do will eventually help many people that are looking for cures. SO i jsut need a nudge from other investors on whether it's wise to stay in? i enjoy investing in high risk comapnies...hopefulyl that didn't jsut answer my question...
    21 Apr 2014, 09:27 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Loe

     

    It's holding at it's near open for now. It's down 11% from yesterday's close. Also, if they do file ch13, there will be a dead cat bounce, most likely. And, that bounce may only last a few minutes, so that would be the final time to get out. Nerve wracking, I'm sorry to say. Good luck.
    22 Apr 2014, 10:00 AM Reply Like
  • EasyBiz Miles Logger
    , contributor
    Comment (1) | Send Message
     
    Something is off. The directors hold the largest share/ risk in this company in which recent rumors point to an intentional delay of payment to settle in cash at a later date. This obviously is not a get rich quick stock which too many investors are looking for. New management inherited a lot of junk that will take time to work itself out. With trial results coming up I highly doubt this is the end of Lanza's legacy with ACTC. If you are in this stock for the research I think you will see a great "buy" opportunity with the sell off based on the default in regards to investors purely hoping to ride a penny stock to riches. Technical trading I saw .6 as my marker and anything below I plan to average in.
    21 Apr 2014, 10:30 PM Reply Like
  • toosmarttofail
    , contributor
    Comments (618) | Send Message
     
    ACTC shareholders can't afford any more buying opportunities.
    22 Apr 2014, 02:08 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Easy

     

    "With trial results coming up"

     

    They are not coming up at all. If you check the trial dates, both dates final completion are not December 2014,and then they have to publish. It will be next year before any trial results are released. I've been writing about that in threads all over SA for days now. The primary trial end dates are not even until Aug. 2014--they aren't even finished according to the dates.
    22 Apr 2014, 10:02 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Too

     

    Best thing you ever said about ACTC Too.
    22 Apr 2014, 10:02 AM Reply Like
  • toosmarttofail
    , contributor
    Comments (618) | Send Message
     
    This is my ALL-IN stock for any fellow horseplayers.

     

    I've said ignore the business side and stay invested until the science lets you down, and also to load up more when the stock gets hit.

     

    Put in an order at $0.04 at the opening and you might get lucky. I see a tmeporary dip here, then a total rebound after the matter is cleared up. It's going to take a lot more than this to grind ACTC to a halt. They may simply be conserving cash and have elected to exploit their contract with CAMOFI by paying the penalty. Time value of money for them is extreme right now.

     

    I'm not picking any other stocks from now on, but will just rise or fall with this one. It hasn't risen yet, and it hasn't fallen yet, but something's going to give very soon.
    22 Apr 2014, 02:14 AM Reply Like
  • TheBigPayback
    , contributor
    Comments (319) | Send Message
     
    Wake up true-believers! The likely case is that one day you will wake up and be wiped-out as common shareholders, which is generally the case for stocks trading where ACTC is trading right at the moment. Now if you can accept that and want to gamble, then gamble, just don't call it "investing" at this stage.

     

    Or another scenario is going from .06 to .04 and then .04 to .02 and so on...

     

    ...you think you're good enough to trade in and out? Tell that to the people who bought in at .09 to .25 cents...

     

    What happens when they can't make payroll?

     

    Sometimes a company may have really great assets, but other business factors come into play to take control.

     

    Take for example Six Flags: here is a company doing well worth billions but went bankrupt in the recent years to reset things.

     

    I'm not trying to scare anyone, just have both eyes open at this stage, especially if you've got taken in by the various pumpers...
    22 Apr 2014, 07:40 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Too

     

    Paying the 1.2M would be the best they could do for ACTC, but they don't have the money,or at least we have no information on that.
    22 Apr 2014, 10:04 AM Reply Like
  • toosmarttofail
    , contributor
    Comments (618) | Send Message
     
    The company will either hit it big or it won't. The key for any "true believer" is to just bet it and forget it. I'd rather lose a small investment in ACTC than miss a life-changing payout. If the stock fails, then wait for the science to turn up with another company and buy them, or even options.

     

    Other than this company I wouldn't touch anything on Wall Street right now anyway.
    22 Apr 2014, 10:15 AM Reply Like
  • Rocco Spaccio
    , contributor
    Comments (11) | Send Message
     
    My bet is they want to close out the deal for $1.2 million...they do not want to give the shares because they are too valuable...a deal is definitely in the works....
    22 Apr 2014, 08:29 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    I also think that is a very real scenario, but they need 1.2M and do not have it, yet, or ever.
    22 Apr 2014, 10:05 AM Reply Like
  • csymalla
    , contributor
    Comments (210) | Send Message
     
    That makes no sense that the shares are too valuable. Why would you pay cash when you have tons of shares to give, especially when they only have about $5 mil cash to their name?
    22 Apr 2014, 10:56 AM Reply Like
  • Genoregrets
    , contributor
    Comments (45) | Send Message
     
    The way this opened and where it is now leads me to believe that article was a set up for a big buy this morning from someone who wanted it to go down big . An investigation should be done
    22 Apr 2014, 10:55 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Gen

     

    Way out in conspiracy field. Look at Time and Sales. Stock is down 9% since yesterday's close. The "article" was an SEC 8K. Geeze.
    22 Apr 2014, 10:58 AM Reply Like
  • Genoregrets
    , contributor
    Comments (45) | Send Message
     
    Notice no author on the article?
    22 Apr 2014, 10:56 AM Reply Like
  • Genoregrets
    , contributor
    Comments (45) | Send Message
     
    Haven't you seen the Wolf of Wall Street
    22 Apr 2014, 11:00 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    It's in the 8K!!!!!!!!!!!!! The WoW dowsn't file 8Ks.
    22 Apr 2014, 11:04 AM Reply Like
  • Scrying Biotech
    , contributor
    Comments (2004) | Send Message
     
    I gotta admit - that's hilarious! Cue the X-Files Intro - Call the SEC - And find out WHO is driving down this stock.

     

    Thanks for the laugh Geno!
    29 Apr 2014, 06:00 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    Interesting. Still gaining from yesterdays sell off after news. But the spread is large for this stock. Looks like the exchanges don't want people selling off.
    22 Apr 2014, 11:11 AM Reply Like
  • MoneyGrubber13
    , contributor
    Comments (283) | Send Message
     
    Besides management, I think investors in ACTC have been asleep at the wheel, so the reaction is delayed. I'm guessing the sell off will play out over the next few days... assuming it's still on the OTC.

     

    If it drops to .03 I'll throw in a dime.
    22 Apr 2014, 11:36 AM Reply Like
  • Esekla
    , contributor
    Comments (3939) | Send Message
     
    I've commented on the event in my article. It's too bad that SA discourages linking to that directly. Much of the commentary here is misinformation.
    22 Apr 2014, 12:45 PM Reply Like
  • Genoregrets
    , contributor
    Comments (45) | Send Message
     
    Eskela , Finally a Voice of reason.
    22 Apr 2014, 08:21 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    On this news there was large volume and a sell off. That looks to be over now and volume is increasing on increasing price.

     

    0.0585 8,312,383
    0.059 6,622,671
    0.058 12,643,276
    0.058 31,138,590 Start of sell off
    0.064 9,282,582 Day before sell off.

     

    Lowest it went on close was .0580
    27 Apr 2014, 05:44 PM Reply Like
  • Hal44
    , contributor
    Comments (596) | Send Message
     
    Please keep us posted as to how this all works out and who in all likelihood, gets ACTC's assets and technology/patents. Also, if anyone knows what direction Dr. Lanza will be pursing, that would be welcomed as well. Thanks
    29 Apr 2014, 04:06 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    ACTC gets to keep their technology and patents until ACTC files chapter 11. Then, there will be bids for it and the highest bidder will get them. Until then, it's all theirs, and they have enough cash for another 2 QQs yet.

     

    Lanza is still with ACTC until he leaves them. The direction he will pursue will be the same as it has been with ACTC, since he is still with them, until he leaves them. There is currently no information that he is leaving.
    29 Apr 2014, 08:40 PM Reply Like
  • SnPJedi
    , contributor
    Comments (93) | Send Message
     
    ACTC will be keeping all of their assets. This was a calculated decision. They could have simply made the payment in shares as requested. However they decided they would pay cash instead. The creditor has said that this constitutes default. By the nature of default the borrow has the right to "cure" the default or give up the designated collateral. With enough cash on had to "cure" the default. It is highly unlikely that ACTC would allow all of their hard fought IP to go down the drain for a $1.2 mil payment they have cash on hand to pay.

     

    The real question is why might they choose to go the default route? Can you think of any reasons they would not want to further dilute? I can, like maybe they are entering the later stages of JV negotiations and the two entities agree that it is better to just pay cash than shares.

     

    I certainly do not know why they chose default, but I do know that this is not an accident! It isn't like they didn't have the shares available to make the payment.
    29 Apr 2014, 09:22 PM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    They may need to default legally before they can pay the 1.2M and get out of the contract. You know, it might be a technical thing. You can't foreclose on your house, for instance, until you default. I have no idea, but just thinking.
    3 May 2014, 06:51 PM Reply Like
  • csymalla
    , contributor
    Comments (210) | Send Message
     
    Possible, but when one considers that @ 7 cents per share, diluting 2.7 billion shares with an additional 17 million or .6% of the float sounds extremely risky especially when $1.2 million is a months worth of operating costs.

     

    The only purpose of doing so would be to reduce the share price. Notice a penny decline in share price = $27.8 million in Market Cap, which provides much better value to a JV than not having a .6% dilution event.
    5 May 2014, 10:51 AM Reply Like
  • DWD Investing
    , contributor
    Comments (10789) | Send Message
     
    csy

     

    Good point, for sure,with good reasoning. However, if they are actively trying to decrease share price, that's a felony,and the SEC will be all over it.

     

    Also, to reduce SP by 1 cent, which is roughly 15% @ current SP, dilution at current float levels would take a lot of dilution.

     

    More likely that they simply don't want to give up the patents, and want to buy the company out. Once the company is paid off, they can publish interim reports because then future profits won't be subject to the old deal.
    5 May 2014, 02:29 PM Reply Like
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