In the last week there has been a surge of new readers here at BuyersStrike!, many of whom may not be familiar with the reanimated corpse of a company called Echo Therapeutics (ECTE).
Read about Echo‘s beginnings as a venture backed company in the mid 1990s and its subsequent fall from grace into the seedy underbelly of reverse mergers here, read about their rehashed device and recycled 510k submission here, and read about LifeTech Capital, the bucket shop staffed with D. Blech & Co alumni, which recently raised money for them right here.
In that last deal, the bulk of the financing for ECTE came from a group called Platinum-Montaur. On Jan 5th 2011, the date of the Platinum-Montaur investment, ECTE stock was trading at $1.49 a share. Platinum bought convertible preferred stock plus warrants. The convertible preferred has an conversion price of $1. A massive 33% discount to market.
So, for their $1mm investment, Platinum already had stock worth $1.49mm. But Platinum also got two series of warrants. Today, with the stock at $3.36 the value of their first $1mm tranche is approximately $4.72mm.
1mm shares @ 3.36 = 3.36mm
500k warrants worth a minimum of 1.86 each (3.36 – 1.50 * 500k) = 930k
500k warrants worth a minimum of 0.86 each (3.36 – 2.50 * 500k) = 430k
These lucky chaps have securities worth $4.72mm on a $1mm investment. A massive return.
The face of Platinum-Montaur is a gentleman named Uri Landesman, who never misses a chance to hawk his motley collection of rag tag Pink Sheet and OTCBB junk with every media outlet who will book him. Whether it is CNBC, or Pimm Fox’s show on Bloomberg, Uri will be there, pumping away. But Uri is just a pretty face who only joined Platinum in May 2010. Who is the real man behind Platinum?
That person is a New Yorker named Meir “Mark” Nordlicht. According to Institutional Investor magazine Nordlicht and Landesman have been friends for a while, but the article left out some important points about Nordlicht and his buddies.
Nordlicht, as some may remember, was the founder of one of the biggest stock collapses of early 2007. A little OTC-BB gem called Optionable (OPBL). Optionable trades for 2 cents a share today, but in March 2007 peaked at $9.10. OPBL imploded when it was discovered that the CEO and co-founder Kevin Cassidy was a two time felon, having served time for credit card fraud (30 months starting in 1997) and tax evasion (6 months in 1993), and that the company had been hiding massive commodities trading losses.
Optionable was founded not long after Kevin’s second release from prison, but clearly that did not bother his partner Mark. After all, Mark’s dad Jules Nordlicht had his own run in with the law in 1978, pleading guilty to a conspiracy count in regards to a plan to manipulate the oil futures market. You can read about that here.
Mark personally cleared over $18mm from OPBL share sales before the implosion, but he just may have been out-conned. Turns out that Platinum was a huge investor in South Florida’s own Madoff-like Ponzi scheme. Platinum sunk $50mm into Scott Rothstein’s $1.2bn structured settlement con. The Sun Sentinel has detailed coverage of that story, read it here.
But hope springs eternal, and recently Mark has had an amazing string of luck with some true dreck. Platinum has huge positions in ECTE, 14mm market cap OTCBB wonder DLYT, 17mm market cap Pink Sheet darling IMSC and the current hot stock among the retail crowd Neoprobe (NEOP).
Like ECTE, NEOP spoke at a LifeTech Capital event in mid November 2010. And, like ECTE, NEOP did a placement with two series of warrants attached. Although NEOP did manage to corral a banker a rung (but only one rung) higher on the ladder, Rodman, than ECTE could manage.
Given the amazing froth building in NEOP, and the same large player involved, is it reasonable to wonder if NEOP is about to pull an ECTE (or an OPBL) and collapse?
See http://advancedduediligence.blogspot.com/ for facts about Neoprobe and its stellar radiopharmaceutical Lymphoseek, then come to your own conclusions.
[@Joe – The conclusions are pretty simple. NEOP is not a company the author would invest in. Lymphoseek appears to be a solution searching for a problem. – Editor]
Lymphoseek finds the sentinel lymph nodes at least as well as currently used sulfur colloid compounds and blue dye but lacks the nasty side effects, has no similar safety issues, and has many advantages. The final breast and melanoma trial results will be out soon, and there is a good possibility Lymphoseek will prove superiority over those, which are now being used off-label.
Rigscan CR completed all three phases of trials in the late 1990s, met all endpoints, but was not approved [Emphasis – Editor] because the FDA wanted proof that patients’ survival was improved, which wasn’t part of the trial protocols. Since then, an independent third party gathered the survival data which showed much-improved survival and recurrence benefits to those who did not get Rigscan CR [I’m sure the NEOP tout-bot did not really mean this – Editor]. Dr. Mark Pykett, the EVP who joined Neoprobe last November, is leading the initiative and has been working with the FDA to get a special protocol assessment approved for a final Rigscan CR trial to begin in 2012. Once approved, the SPA would be a binding contract with the FDA. [Here we go again with the “binding contracts” – Editor]
Total market potential sales are estimated to be $450M for Lymphoseek and $3B for Rigscan CR. [By whom? – Editor]
The facts about Lymphoseek do not support your belief that it is a solution seeking a problem.
[@Joe – Perhaps a future post will go into examining Neoprobe (NEOP) in further detail, and why SPAs are not “binding contracts”, something the MELA-morons are learning the hard way. – Editor]
We have been doing research on these three companies and their ties to Platinum Partners (who we believe is operating a billion ponzi scheme out of New York).
Platinum is “supposedly” a billion credit fund out new york, but has made investments in these three start up companies / public funds totally $590 million…. This does not even come close to adding up.
Platinum made such investments in connection with Jett Capital, which they have also made numerous smaller investments over in Australia with really hairy structures and announcements.
The common occurrence is all the companies and investments are tied together and often moving money between all parties and companies.
Platinum “supposedly” invested $200+ million in asiasons and then months later sold their fledgling oil and gas company (Black Elk) to them at a hugely inflated value. We believe they did this to cover up massive losses at their fund. Prior to the sale Black Elk was months away from filing bankruptcy after a major well explosion in the gulf at one of their sites. Black elk has lawsuits totally multiple times their asset value yet this Singapore listed company paid a valuation over $400 million to buy it off Platinum right after Platinum made an investment in the Singapore company itself.
We have proof they are trying to do it again with a bankrupt asset in Indiana (the landree mine).
Platinum and these Singapore listed companies in the header are running a massive pump and dump game, which we believe is to cover up ponzi schemes at Platinum and the three listed companies.
I don’t invest in the stock market and would prefer the news just get out to stop people from getting hurt and am not looking for any monetary profit myself. Just looking for this to be exposed to protect more people from getting hurt from these antics these guys are playing.
There are multiple links in the public domain that describe what they are doing.
Also Platinum operates out of 100’s of aliases in their investments to cover up their affiliation. Basically any money ever invested in these companies are wholly owned affiliates of platinum. They did this to try to cover up what they are doing, with hopes of the stock being pumped.
Why are you researching Platinum? I was asked to evaluate this fund many years ago and have come to the same conclusion. Although back then they haven’t made an investment in Black Elk yet. Various news (Black Elk, some China stuff, etc.) have only firmed up my belief. I’m pretty sure this is a fraud and ponzi scheme.
I’m just a curious reader wondering who else out there thinks/knows this is a fraud.
Dose platinum own landree?
Nordlicht vs Soh Chee Wan. Who is a bigger con artist ?