Entropin has gone through some changes since you last asked about them
in September 2003.
For an investor, the change in the stock price can't have been too
much fun. Entropin was trading in the 50-60 cent per share range back
in September, but by November the share price had dropped to around 20
cents per share, where it has stayed ever since. The stock is traded
more actively now, then last year, averaging about 120,000 shares per
day, and peaking in February 2004 at over a million shares. There
have been a few hefty trading days in June as well, topping out at a
bit over 600,000 shares.
You can see an overview of Entropin's trading history for the past
year at this Yahoo Finance link:
There have been several news stories pertaining to Entropin, and
recently, there has been some news of significance. Yahoo Finance
also covers recent news stories for stocks, and the news headlines for
Entropin can be seen here:
Here are a few items of particular note:
Entropin, Inc. Implements Investor/Public Relations Program
Monday June 21
Entropin, Inc....a development stage pharmaceutical company focused on
the pain therapy market, is pleased to announce that it has retained
Barry Kaplan Associates, of Fair Haven, New Jersey, to implement a
nationwide investor/public relations program...
The program's objectives will be to expand Entropin's presence in the
marketplace through effective communications with market makers,
retail brokers, analysts, investment advisors, financial media, and
other interested stock market professionals...
Court Dismisses Class Action Suit Against Entropin
Monday June 14
Entropin, Inc...announced today that the Superior Court of the State
of California for the County of Riverside granted the Company's motion
for summary judgment. The Court will enter a judgment in favor of the
Company dismissing the class action suit against the Company as well
as the officer and the director of the Company who were included in
the suit as defendants. The class action suit was filed in late
January of 2003...
Entropin Begins Refinement of Topical ENT-103 Formulation and
Progresses Toward Human Clinical Trials
Friday May 28
Entropin...announced today that its collaborators at RTI International
have successfully synthesized radio labeled ENT-103. This achievement
sets the stage for the Company to evaluate a variety of enhanced
topical formulations of ENT-103. The Company intends to select the
best of the topical formulations as its candidate for initial human
So, from the looks of things:
--Entropin is mounting a public relations campaign to increase its market presence;
--It's making progress with R&D on its topical formulation product,
and hopes to move towards a human clinical trial.
--It's legal troubles -- which I wrote about last time -- have eased,
but not before considerable effort and expenses had been laid out. (I
wouldn't be surprised if the dismissal of the class action suit was
one of the factors leading to a spike in ETOP.OB trading volumes in
Entropin has also filed several reports with the SEC since your
question last September, and I have had a look at these as well.
March 11, 2004
ENTROPIN REPORTS SUCCESSFUL SECONDARY OFFERING AND YEAR-END
2003 FINANCIAL RESULTS
The Company recently completed a stock offering with gross proceeds of
approximately $3,470,000 (including a 10% over-allotment) through the
sale of approximately 17,350,000 shares of its common stock... The
Company intends to use the offering proceeds to:
o develop additional formulations of the Company's proprietary ENT-103 compound;
o complete additional preclinical studies on ENT-103;
o prepare and file an investigational new drug application for ENT-103;
o explore licensing agreement(s) with third party pharmaceutical companies;
o commence a Phase I clinical trial for ENT-103 in early 2005.
--During the first quarter of 2004, the Company completed the
offering, raising net proceeds of approximately $3.4 million, net of
offering costs of approximately $444,000 (including non-cash costs of
approximately $19,000 related to a warrant issuance). The Company
believes that the net proceeds of this offering, along with its other
available cash balances, will be sufficient to permit it to operate
into early 2005, and to complete its preclinical studies, file an IND
and complete its Phase I human trials for ENT-103. Although these
estimates reflect the Company?s current expectations, it is possible
that the Company?s actual expenditures could exceed these estimates,
which would shorten the time during which it could fund its
--In January 2004, the Company issued a warrant to acquire 1,000,000
shares of the Company?s common stock to Navidec, Inc., a consulting
organization retained to provide business and financial advisory
services to the Company. The warrant became exercisable with respect
to 500,000 of the underlying shares on January 31, 2004 and became
exercisable with respect to the remaining 500,000 shares on March 31,
2004. The warrant is exercisable at a price of $0.25 per share until
its expiration on January 28, 2009. The fair value of warrant was
estimated at $152,500 on the date of grant...
--We need to raise additional funds to support our operations. If we
are unable to raise these funds, we will be unable to complete our
product development and will need to reduce or cease our
operations...Our independent auditors? opinion on our 2002 and 2003
financial statements includes an explanatory paragraph indicating
substantial doubt about our ability to continue as a going concern...
--During the first quarter of 2004, we completed a secondary offering
of our common stock in which we raised net proceeds of approximately
$3.4 million. We believe that the net proceeds of this offering will
be sufficient to permit us to operate until early 2005, and to
complete our preclinical studies, file an Investigational New Drug
application (?IND?) and complete our Phase I human trials for ENT-103.
Although these estimates reflect our current expectations, it is
possible that our actual expenditures could exceed these estimates,
which would shorten the time during which we could fund our
operations. In addition, any delay in the completion of our
preclinical studies, IND filing or Phase I human trials, could
significantly harm our prospects given our limited remaining funds.
--We will need to raise significant additional funds to continue the
development of ENT-103 (topical and injectable formulations) and
complete the FDA approval process, which we expect will cost
approximately $45 million beyond our total expenditures to date and
will take at least an additional four to five years...
--If we fail to obtain regulatory approval to commercialize ENT-103,
or if approval is delayed, it will increase the cost of development,
and will likely prevent or delay our ability to sell ENT-103 and
generate revenue...Our sole current drug candidate, ENT-103, has
undergone only limited preclinical development and we do not
anticipate beginning human clinical trials with ENT-103 until early
2005, although we can give no assurances as to the results of or the
time to complete the preclinical studies. We have not yet filed an
application to commence human clinical trials, known as an
Investigational New Drug, or IND, application, nor have we requested
or received regulatory approval from the FDA for marketing products
DEFINITIVE PROXY STATEMENT FOR ENTROPIN
--Annual Meeting of Stockholders of Entropin, Inc....on Tuesday, June 29, 2004
--SECURITY OWNERSHIP BY CERTAIN BENEFICIAL HOLDERS
...beneficial ownership of our common stock as of April 15, 2004, by:
? each person known by us to own beneficially 5% or more of our common stock,
? each of our executive officers, directors and director nominees...
Higgins D. Bailey..............1,301,316..........253,334
Randall L. Carpenter...............1,334...........40,000
Joseph R. Ianelli.................10,000..........123,334
Patricia G. Kriss.................35,100...........73,250
Paul V. Maier..................... 6,003...........40,000
Bruce R. Manning..................10,000...........36,667
Dennis K. Metzler..................5,000.......... 25,000
Thomas G. Tachovsky...............29,000..........245,200
The overall picture appears to be one of a company actively engaged in
trying to keep a positive cash flow, so that it can continue the
expenses involved in testing its one key product, ENT-103, and
hopefully bringing it to market. It's an all-the-eggs-in-one-basket
sort of company, at least at the moment.
merlyn-ga, I hope this information meets your need for an update on Entropin.
But before rating this answer, please let me know if there's anything
else you would like me to explore. I'm more than willing to dig as
deep as I can on this. Just post a Request for Clarification if you
would like additional information, and let me know how I can help you.
Clarification of Answer by
27 Jun 2004 14:46 PDT
Thanks for getting back to me so quickly. Let me take your follow-up
comments one at a time.
>>The new information was the number of new shares issued which is more
than enough for some one or straw man or company to have effectivally
gained control of the company behind a veil? Can you find out who has
these shares, or large portions there of? What I am looking for is who
really runs the show. <<
I would say the answer has to be the Chairman of the Board, Higgins
Bailey, who is the largest shareholder of record. Howver, there are
definitely a few other power players in the wings.
Let's look at the specifics.
First, let's check the Share Statistics for ETOP.OB, which can be found here:
All together, Entropin has issued 30.8 million shares of common stock.
Of these, 14.92% are held by insiders. No shares are reported held
The original answer to your question (above) included a list of all
major shareholders in Entropin as well as all significant insider
shareholders who are executives in the company.
As can be seen from that list, Higgins D. Bailey holds 1.3 million
shares, and options for another quarter million shares, for total
control over 1.55 million shares, or just over 5% of the total of 30.8
million shares outstanding. He certainly appears to be the biggest
fish in the pond...the next largest shareholder on the list is Thomas
G. Tachovsky, with control over a bit more than a quarter of a million
As mentioned above, there are no institutional holdings in the
company. From what I can tell, there is no sign of a
man-behind-the-curtains pulling the strings here.
>>What happened to Tom Andersons Shares? <<
Having said that, it certainly looks as if Thomas Anderson has
signifcant sway at the company.
According to Entropin's January 15, 2004 proxy amendment filed with the SEC:
they mention Anderson in this context:
We sublease 800 square feet of office space in Indio, California from one
of our principal stockholders, Thomas T. Anderson, for a monthly rent of
$800 on a month-to-month basis. We believe this lease is at or below market
prices for comparable office space. We believe that our current space
is adequate for our current and identified future needs.
In the same filing, they offer a brief biography of Higgins D. Bailey,
which also mentions Anderson:
HIGGINS D. BAILEY, ED.D., joined us as an officer and director in July
1992 and is currently our Chairman of the Board. From July 1995 to
December 1996, Dr. Bailey was President and Chief Executive Officer
for the Pharmaceutical Educational and Development Foundation at the
Medical University of South Carolina, Charleston, South Carolina,
which formulates and manufactures pharmaceutical products. Since 1991,
he has served as the business manager for Thomas T. Anderson Law Firm,
Indio, California. Thomas T. Anderson is one of our principal
stockholders. Dr. Bailey currently serves as Chairman of the Board for
Criticare Systems, Inc., a public company that manufacturers and sells
vital signs medical monitoring equipment. Dr. Bailey received a B.A.
degree in biology from Eastern Washington University, an M.S. degree
in program planning and personnel and an Ed.D. degree in
administration and management from the University of California,
Lastly, the January 15, 2004 filing lists Anderson as owning 1,394,093
shares. At the time, this holding represented 12% of the company's
Since that report, however, they have offered additional shares, as I
mentioned above, so that Anderson's holdings no longer bring him above
the 5% mark, and so are not reported in subsequent documents.
If Anderson held more than 5% of company stock, I believe his holdings
would have to be listed in SEC filings. However, he clearly is in a
position of influence as both a "principal stockholder" as well as the
landlord for Entropin, and as someone with a close business
relationship to Higgins Bailey.
>>The new information was the number of shares out there. Where are they?<<
Presumably, in the hands of relatively small shareholders, as there
are no reports of institutional investors, or of any 5%-or-more
shareholders other than Higgins Bailey.
However, two warrants to obtain shares in the future were issued and
The Navidec Financial Services Company has a warrant to purchase up to
one million shares of the company's stock at $0.25 per share.
You can see the actual warrant here:
Navidec is providing financial consulting services to Entropin,
according to Entropin's 2003 Annual Report, so presumably, Navidec may
also have considerable influence over the operating decisions of the
A second, smaller warrant was also issued to Investlinc:
In 2004, the Registrant issued a warrant to acquire 119,000 shares of
the Registrant?s common stock to InvestLinc Securities, Inc., pursuant
to the Amended and Restated Investment Banking Agreement, dated
December 11, 2003 between the parties. The warrant is exercisable at a
price of $0.20 per share until its expiration on January 28, 2009. The
warrant contains a cashless exercise provision and provides certain
registration rights to the holder. The issuance of the warrant was
made in reliance upon the exemption from registration provided by
Section 4(2) of the 1933 Act for this transaction. No broker/dealers
were involved in the sale and no commissions were paid. The warrant
will be impressed with a restrictive legend advising that the shares
represented by the certificate may not be sold, transferred, pledged
or hypothecated without having first been registered or the
availability of an exemption from registration established.
You can see the Annual Report, and a discussion of both warrants, here:
Both Navidec and Investlinc helped steer Entropin's public offering of
additional shares of stock. It appears that the relationship between
these firms may be ongoing.
I hope this gives you some additional insights to the company. If
there's anything else I can do for you, please don't hesitate to let