BRTXQ is a name that we have gotten many emails and inquiries from our subscribers. Q stocks in general are names that are to be avoided. Even the SEC definition scares most investors.
According to the SEC, when a company is involved in bankruptcy proceedings, the letter “Q” is added to the end of the company’s stock ticker symbol. In most cases, when a company emerges from bankruptcy, the reorganization plan will cancel the existing equity stock and the old shares will be worthless. Given that risk, before purchasing stock in a bankrupt company, investors should read the company’s proposed plan of reorganization.
So that means investors shouldn’t own BRTXQ?
No, on the contrary, it’s one name to own.
BioRestorative filed for bankruptcy protection in March but has partnered on a new bankruptcy reorganization plan with one of its creditors Auctus Capital in which the Company would emerge from bankruptcy with the common shares intact, ready to begin their phase 2 trials and get BioRestorative back on a national stock exchange.
What does this mean?
The reorganization plan has been agreed upon. Now, shareholders are just waiting on Bankruptcy Judge Grossman to approve the plan.
In this article, we take a close look at BRTXQ and why shares represent a winning lotto ticket. Investors just need to patient.
First up, here’s a little background info for those not familiar with BRTXQ. BioRestorative Therapies, Inc. develops therapeutic products using cell and tissue protocols, primarily involving adult stem cells. The company’s two core programs, as described below, relate to the treatment of disc/spine disease and metabolic disorders.
Disc/Spine Program (brtxDISC™)
Its lead cell therapy candidate, BRTX-100, is a product formulated from autologous (or a person’s own) cultured mesenchymal stem cells collected from the patient’s bone marrow. The product will be used for the non-surgical treatment of painful lumbosacral disc disorders. The BRTX-100 production process utilizes proprietary technology and involves collecting a patient’s bone marrow, isolating, and culturing stem cells from the bone marrow and cryopreserving the cells. In an outpatient procedure, BRTX-100 is to be injected by a physician into the patient’s damaged disc. The treatment is intended for patients whose pain has not been alleviated by non-invasive procedures and who potentially face the prospect of surgery. BRTXQ received authorization from the Food and Drug Administration to commence a Phase 2 clinical trial using BRTX-100 to treat persistent lower back pain due to painful degenerative discs.
Metabolic Program (ThermoStem®)
BRTXQ is developing a cell-based therapy to target obesity and metabolic disorders using brown adipose (fat) derived stem cells to generate brown adipose tissue (“BAT”). BAT is intended to mimic naturally occurring brown adipose depots that regulate metabolic homeostasis in humans. Initial preclinical research indicates that increased amounts of brown fat in the body may be responsible for additional caloric burning as well as reduced glucose and lipid levels. Researchers have found that people with higher levels of brown fat may have a reduced risk for obesity and diabetes.
How Did BioRestorative Therapies End Up In Bankruptcy?
BRTXQ failed to raise between $10 million and $12 million for a clinical trial of its stem-cell therapy for bulging spinal discs, executives said in the filings. The trial was authorized by the U.S. Food and Drug Administration three years ago.
Board member and intellectual property attorney John M. Desmarais loaned the company $1.3 million, including interest, in 2016-17. Desmarais bid $500,000 through another business he owns, Phoenix Cell Group Holdings LLC. Phoenix was also providing $1.4 million to keep BioRestorative operating, the filings stated.
What Was Desmarais Game Plan?
His plan was to get the intellectual property owned by BRTXQ on the cheap. Basically, he thought he could steal the company. After all, he is a patent attorney and was a board member. He knows the true value of the patents!
Actus Fund and BRTXQ
Seeing what was happening, Actus Fund stepped in and partnered with the company to fund the company through bankruptcy and complete the FDA trials. In the U.S. and Europe, over 100 million people suffer from chronic back pain. Spinal fusion surgery costs $110,000. Discectomy costs anywhere from $20,000 to $50,000 and disk replacement surgery is $80,000 to $150,000. Compare this to what BRTXQ costs!
This is a multi-billion-dollar opportunity for BRTXQ. All that is required is $10 million to $12 million for the trial and $2 million to $3 million in debtor financing. This is what Actus Fund realizes and why they have partnered with the company.
BRTXQ Bottom Line
Right now, all that is required is for Judge Grossman to say one word – EFFECTIVE. We don’t know when that will happen. A lot depends on his schedule with holidays, COVID-19, and a logjam of cases on the docket. Interested shareholders can monitor the developments on PACER. We at Insider Financial will also be following along and updating our subscribers.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in OTCMKTS:BRTXQ, or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.