Biocoral (NASDAQOTH:BCRA)

CAPS Rating: No stars

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Member Avatar spundun (23.93) Submitted: 11/23/2009 5:37:54 PM : Underperform Start Price: $32.00 BCRA Score: +176.66

tsif smashy

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Member Avatar SirCharms (< 20) Submitted: 6/10/2009 5:40:17 PM : Underperform Start Price: $38.00 BCRA Score: +201.59

I could be misreading things here, but from their 10-K, it sure looks like this is a company valued at $438M that is doing several $100K worth of business. Let's see if there's a good reason:
"In addition, where our reliance on an outside manufacturer to produce our autologous fibrin glue resulted in the failure of this product, we have now commenced a lawsuit against this manufacturer [for 110M Euro]"
In short, their entire market cap is devoted to a big lawsuit and trying to redeploy a (single) medical product that was defective the first time around. I'm not saying it won't happen, just that I like my odds here.

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Member Avatar LarryRicardo (99.96) Submitted: 3/26/2009 1:03:50 AM : Underperform Start Price: $38.00 BCRA Score: +201.59

First off, thanks to TMFSmashy for a great blog a few weeks ago. I forgot how it got on my watchlist, so I accidentally did a bit of homework. Here are some highlights:

Its auditors recently resigned: http://biz.yahoo.com/e/090126/bcra.ob8-k.html

And, that auditor had the following comments in its own 2005 audit: "The inspection team identified matters that it considered to be audit deficiencies. The deficiencies identified in both of the audits reviewed included deficiencies of such significance that it appeared to the inspection team that the Firm did not obtain sufficient competent evidential matter to support its opinion on the issuer's financial statements. Those deficiencies included the failure to perform and document, in both of the audits reviewed, an evaluation as to whether there was substantial doubt regarding the ability of the issuer to continue as a going concern."

http://www.pcaobus.org/Inspections/Public_Reports/2005/Moore_and_Associates_Chartered.pdf

The good news is they recently found a new auditor:

http://biz.yahoo.com/e/090217/bcra.ob8-k.html

But, the bad news is this auditor seems to be worse than the last one. Here's an excerpt from the auditors own 2006 audit: "The inspection team identified matters that it considered to be audit deficiencies. The deficiencies identified in two of the audits reviewed included deficiencies of such significance that it appeared to the inspection team that the Firm did not obtain sufficient competent evidential matter to support its opinion on the issuer's financial statements. Those deficiencies included –
(1) the failure to perform and document sufficient audit procedures related to the valuation of intangible assets;
(2) the failure to perform and document sufficient audit procedures related to the valuation of certain equity transactions;
(3) the failure to perform and document an appropriate evaluation of an issuer's ability to continue as a going concern; and
(4) the failure to perform and document sufficient audit procedures related to cash balances.

And of course, the stock itself hasn't traded since January. I'll let readers review the financial statements themselves. But they are pretty unbelievable, given the market cap. I wouldn't be surprised if the next trade is down 80%, which would make it unplayable in Caps. That would be a shame...

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