3D Bioprinting with Rainbow Coral Corp
Many disruptive technologies attract the attention of investors and consequently, many companies will seek to attach themselves to these technologies. In a previous article, we highlighted 6 over-the-counter companies which quickly latched onto “nanotechnology” when it became a hot topic in 2004-2005. An investor during this time who would have would have invested $5,000 in each of these six companies would have exactly 80 cents today. An article on Azonano yesterday highlighted an over-the-counter (OTC) company, Rainbow Coral Corp, that claims to be “preparing to capitalize with groundbreaking new products for the 3D marketplace”.
About Rainbow Coral Corp
Florida based Rainbow Coral Corp (OTCBB:RBCC) was incorporated in 2010 and formed to build a coral farm facility to develop and grow live coral. Anyone who invested in this venture when the stock began trading in 2011 would have already lost 98.99% of their investment.
In 2011, RBCC also formed a subsidiary, Rainbow Biosciences, to “look into opportunities within the bioscience market”. The company stated in January 2014 that they have “joined forces with Nano3D Biosciences to develop and market the BiO Assay, a new automated toxicity assay system based on magnetic 3D bioprinting” and that the technology is “faster and more affordable than competing bioprinting tech made by competitors such as Organovo“.
Investors may be interested to read some of the correspondence on March 4, 2013, between SEC Branch Chief Lyn Shenk and RBCC regarding their claims. An excerpt can be seen below:
We note from your press releases and the website of your subsidiary Rainbow Biosciences, LLC that you believe Nano3D Biosciences, Inc., in which you hold an equity interest, is an “emerging biotech game-changer,” whose “incredible new product, the Bio-Assembler, will soon allow researchers to dramatically shorten the development timeline for advanced new drugs and treatments while generating massive returns to investors. However, based on your disclosure in note 5 to your financial statements, we note that you actually wrote-off the investment due to uncertainty about whether the carrying amount was recoverable. We also note that your investment at March 31, 2012 appears to have consisted of only 36 shares in Nano3D Biosciences, which represented less than one-third of one percent of their outstanding shares on the date of the agreement.
The full question and response from RBCC along with 11 other points of clarification can be read in the original correspondence letter. The fact that the SEC is concerned about statements the company is making about the potential of the Nano3D Biosciences “equity investment”, not to mention having to request 10 other clarifications, should be a huge red flag to investors.
In a press release a few days ago, the statement was made that RBCC (Market Cap $4 million) is looking to market and develop new medical and research technology innovations to compete with companies such as Biogen (Market Cap $70 billion) Abbot (Market Cap $56 billion) and Amgen (Market Cap $89 billion). It remains to be seen how the business of growing coral will compliment this lofty aspiration.
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