Things we’re still waiting to see. (CAAS, ECTE, FSIN, SBAY)

Since the beginning of the year, there are many things that the folks here at BuyersStrike! HQ have been anticipating. Some, like the mythical short squeeze promised by the Yahooligans enamored with James T. Crane‘s former home, Subaye (SBAY) will clearly never happen.

Others, like word from the FDA on the 510(k) submission of Echo Therapeutics (ECTE) ‘s rehashed ultrasonic lidocaine machine, are perennial “any day now” stories. Echo, a favourite of Florida bucket shops and Meir “Mark” Nordlicht’s Platinum-Montaur, submitted its 510(k) for the new version of its old, failed, product, in the middle of November 2010. Here is what ECTE had to say last November:

FRANKLIN, Mass., Nov. 11, 2010 /PRNewswire/ — Echo Therapeutics, Inc. (OTC Bulletin Board: ECTE), a company developing its needle-free Symphony™ tCGM System as a non-invasive, wireless, transdermal continuous glucose monitoring system and its Prelude™ SkinPrep System for transdermal drug delivery, today announced that a 510(k) premarket notification has been submitted to the US Food and Drug Administration (FDA) for its Prelude SkinPrep System and 4% lidocaine cream.  Market clearance is expected to take ninety (90) days.

The 510(k) process is the simplest standard for obtaining marketing approval from the FDA. One need only show that a device is “substantially equivalent” to an existing, cleared (or grandfathered) medical device. Considering that the previous generation of Echo‘s device was cleared, see the submission here, the review should have been completed and a decision issued around the 12th of February at the latest. It is now 4 months past the original due date, and over 7 months since the original submission. One can only imagine how deficient the filing must have been for such a delay. Perhaps Echo chose its regulatory consultants and lawyers as well as it chose its bankers?

Then there is the case of China Automotive (CAAS), for which we eagerly await both the 1Q2011 10Q and the 2010 10K which was due in March. We looked at CAAS, along with a gaggle of other fine Chinese reverse-merger companies, here. All of the firms on that list, except for CAAS, have managed to file (it should be noted that one of the firms, Advanced Battery Technologies (ABAT) has a serious disclosure issue, see here). It is now the third week of June. And yet CAAS continues to trade.

One easy fix to the CAAS problem, that the exchanges should immediately implement, is to return to the old rule of adding an “E” to the tickers of any firms late in their filings. The NASDAQ could so very easily warn investors that a company is delinquent in filing its required financial statements. This small change would not require any government agency to beg Congress for more funding, and it is a proactive step towards true investor protection. Does anyone at the NASDAQ or NYSE actually care? (Yes, certain blog subscribers who work at those exchanges, your author is pleading with you to do the right thing.)

Another development we eagerly await concerns Fushi Copperweld (FSIN). No doubt some readers have picked up on the tantalizing easter eggs that have been in several posts concerning C-Wang’s FSIN. In November of 2010 the company announced that its Chairman and Co-CEO, Fu Li, made an offer to acquire the company. The world still waits. But there is another development at FSIN that your author is anticipating. So, here is a Buyersstrike! prediction. Sometime around the 17th of July there should be a series of mysterious ownership filings, covering over 6mm shares, in FSIN. The filer? Likely an outfit called HAP Trading. The price HAP will pay for the stock? 12.5 cents per share. Yes, you read that correctly, twelve and one half cents per share. The seller? Unknown, but given the holders list, from the most recent filings, the only owner of that many shares is FSIN’s own Chairman and Co-CEO Fu Li. The very same Fu Li who supposedly since November 2010 is trying to take the company private! Just what is going on at FSIN? Stay tuned.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

4 comments

  1. Re: Echo, these types of delays are typical. When you submit a 510(k), the FDA has 90 days to respond – respond in any form, not necessarily a clear/not clear decision. I’m under the impression that over half of submissions get requests for additional information (AI letters), and those are usually sent at the 90-day mark, at which point the FDA can say it’s meeting its deadlines and the ball is back in the sponsor’s court. So the 90-day limit is a bit sneaky and misleading. That says nothing about the quality of Echo’s submission, but I wouldn’t necessarily ding them for the FDA delay alone.

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