US Stem Cell Inc (OTCMKTS:USRM) is a penny player in the stem cell space that recently caught some major air off the pattern lows. We looked at this stock a couple weeks ago, and suggested some theories about the movement, finding no clear signs that USRM stock was being openly pushed by investor awareness activity. Instead, we hypothesized that the blast off was related to the potential amicable settlement of a legal matter with NorthStar Biotech.
At this point, shares are consolidating the recent advance, and the company has come out with some news clarifying things a bit, recently announcing that Greg Knutson, the Manager of NorthStar Biotech, LLC, has joined the Board of Directors of U.S. Stem Cell, Inc. That is particularly interesting given our hypothesis in our last piece. It would appear this announcement suggests we were correct in our framing.
US Stem Cell Inc (OTCMKTS:USRM) trumpets itself as a company committed to the development of effective cell technologies to treat a variety of diseases and injuries. By harnessing the body’s own healing potential, we may be able to reverse damaged tissue to normal function.
U.S. Stem Cell’s discoveries include multiple cell therapies in various stages of development that repair damaged tissues throughout the body due to injury or disease so that patients may return to a normal lifestyle.
U.S Stem Cell is focused on regenerative medicine. While most stem cell companies use one particular cell type to treat a variety of diseases, U.S Stem Cell utilizes various cell types to treat different diseases. It is our belief that the unique qualities within the various cell types make them more advantageous to treat a particular disease.
According to company materials, “US Stem Cell, Inc. (formerly Bioheart, Inc.) is an emerging enterprise in the regenerative medicine / cellular therapy industry. We are focused on the discovery, development and commercialization of cell based therapeutics that prevent, treat or cure disease by repairing and replacing damaged or aged tissue, cells and organs and restoring their normal function. We believe that regenerative medicine / cellular therapeutics will play a large role in positively changing the natural history of diseases ultimately, we contend, lessening patient burdens as well as reducing the associated economic impact disease imposes upon modern society.”
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As we noted last time, there is very little clear information out there to be found on the details of the legal matter between NorthStar Biotech, LLC, and US Stem Cell Inc. However, management’s perspective on things offers at least some clue as to how this development fits into the larger picture.
“We are very pleased that Greg Knutson, a longtime supporter of the U.S. Stem Cell family of companies, has agreed to join our Board and assist us to continue with our recent technological advances and financial accomplishments,” said Mike Tomas, President and CEO of U.S. Stem Cell, Inc. A longtime U.S. Stem Cell shareholder and supporter, Knutson brings more than 30 years of business and financial experience to the organization. During his entrepreneurial career, Knutson founded Concrete Specialists, Inc. and continues to serve as its President; is the founder and current President of Sunwood Properties; and is the founder and Managing Partner of G&G Land Development, LLC.
The release continues to state matters more plainly: “Demonstrating a progressive step forward, Knutson joins the Board of Directors just as the two companies amicably settled a legal dispute related to NorthStar’s preferred shares.”
We’ve witnessed in excess of 550% piled on for shareholders of the listing during the trailing month, a bounce that has taken root amid largely bearish action over the larger time frame. The situation may be worth watching. USRM has a history of dramatic rallies. Moreover, the listing has benefitted from a jump in recent trading volume to the tune of approaching 500% over the long run average.
US Stem Cell has a chunk ($246K) of cash on the books. But that total must be weighed against a mountain of about $3.3M in total current liabilities. One should also note that debt has been steadily growing over recent quarters. USRM is pulling in trailing 12-month revenues of $2.7M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 30.9%. Given the volume and volatility now involved, this may be a very interesting story and we will look forward to updating it again soon. For continuing coverage on shares of $USRM stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!