NeoStem, Buying a falling knife, dead money of an atrophying model @ Scimitar Equity Blog (NBS)

NeoStem, Inc. (Amex: NBS) is a leader in the development and manufacture of cellular therapies. NeoStem has a  strategic combination of revenues, including that which is derived from the contract manufacturing services performed by Progenitor Cell Therapy, LLC, a NeoStem company.

At Scimitar Equity Blog, Founder and Director of Research Henry McCusker wrote an article discussing his concerns about NeoStem's financial state. He references a recent NeoStem announcement, which stated that "as of 3/31/12, between its US and China operations consolidated cash and cash equivalents of $21.8M, and an additional $2.5M in cash held in escrow." He then poses the question: "Are they TRUE and legal statements or is 'management fiddling as NBS burns'?

He continues,

"What is the true or real US cash position…in my additions and subtractions and rate of spending (using the KISS principle) NBS (approximating) had Plus (+) or minus (-) $1M in cash pre the recent $6.8M raise through Maxim. If NBS is spending $5M a quarter with April and May gone by, I would project a range of $3-4M as a current balance and NBS should be out of money by July end. Are the Erye pre-sale announcements a desperate 'screen' to prolong a further decline in the share pricing, or are they waiting for a 'miracle'?"

Read more at ScimitarEquity.com.