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CYTX Financial performance development

TOPIC: Rights Offering

Rights Offering 06 Apr 2016 16:33 #6780

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04/06/2016

Dear Stockholders,

Over the past 18 months Cytori has undergone a considerable transformation. Driving that transformation is a fresh, experienced team that is focused on getting the job done, quickly and efficiently.

Over that time, we have enhanced the company’s path to a U.S. approval by repositioning our clinical program from a single expensive development program for heart failure to a broader pipeline of later stage indications that are cost effective to develop while still targeting very attractive commercial opportunities and unmet patient needs. The U.S. phase III trial in our lead indication, scleroderma, should be fully enrolled in mid-2016 with a planned evaluation and potential FDA approval by 2018.

Simultaneously, we have taken a number of actions to strengthen our financial position and continue to reduce our financing requirements. Specifically, we reduced a substantial amount of the company’s debt and key liabilities and we have reduced our operating cash burn by over 40% year-over-year while increasing our investment in research and development with an emphasis on late-stage clinical programs. In addition, we are focusing on three key revenue-producing activities: our BARDA program, our Japan therapeutic sales and our recently launched European managed access program. These combined initiatives are part of our plan to become financially self-sustaining, while in the meantime, allow greater flexibility and discretion in when and how we access capital with the goal of minimizing dilution to current shareholders.

As we approach a number of important milestones, the board and management seek to address the existing capital needs of the company in a manner that best recognizes and includes our stockholders. We believe this stockholder rights offering will provide sufficient capital to allow the company to complete enrollment and announce the data from our US phase III scleroderma trial and move the company ever closer to our larger goal of enhancing lives through novel cellular therapies.

Thank you for your support of the company and confidence in our technology and team.

Sincerely,
marc_hedrick_sig
Dr. Marc H. Hedrick
President & CEO
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Rights Offering 06 Apr 2016 16:40 #6781

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What offering?

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Rights Offering 06 Apr 2016 16:44 #6782

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See Investor Relations on their website for the Investor Note and the SEC Filing.

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Rights Offering 06 Apr 2016 16:48 #6783

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Rights Offering 06 Apr 2016 17:07 #6784

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Cutting through the formal announcements and just getting to what shareholders want to hear would sound so much better-

"Dear shareholders, in an effort to save this precious company and increase operating capital for R&D, I am taking a 60% pay cut. My fellow board members are welcome to join me."
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Rights Offering 06 Apr 2016 18:10 #6785

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We are on the "repeat" cycle now.

More warrants to go out to be converted to shares (later) to be front-sold to the sheep so Mark can eat well...

RS is coming, shorts are seeing $$$, but offshore sharks might want to send a head-fake before selling... beautiful game that leaves a trail of blood or :nice: soon...

Which one will you be?

:cry: :nice: :KO: :evil: :vegas:

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Rights Offering 06 Apr 2016 21:10 #6786

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Potential pluses and minuses but all we know for sure is Maxim gets paid again.
rothco....maybe they want to make you happy after all...LOL !

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Rights Offering 06 Apr 2016 22:33 #6787

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Hedge, your right about Maxim being paid again :evil: :puke: . Maxim are most aware of where all the shares issued during the previous capital raisings are bedded down (not to mention the warrant conversion shares).

However the fact that they are not underwriting a dilutive toxic capital raise at the expense of the current shareholders is a welcome changel. These sorts af rights offerings are not very common in the USA and I have NEVER seen one undertaken in the listed biotech market. I for one was always in favour of the existing shareholders being given preference over the arbitrageur, hedge fund traders who ALWAYS had an opportunity to front run the news at OUR expense.

Ideally I would have liked to have seen some form of non dilutive partnership deal that would have provided the capital necessary until scleroderma, OA and BARDA data was available. It is what it is :cry: Having said that I am happy that the existing shareholders are provided with the opportunity to participate rather than being diluted while standing on the sidelines.

It is no doubt very hard to commit new funds after having had so much capital decimated ( I am talking to all the old guard investors who are not traders).. My take on this development is "In for a penny, in for a pound" as they used to say in NZ. I am awaiting the specific terms with interest.

Good luck to all who choose to participate ......... and to those who choose to hold. :vegas: :bye:

.

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Rights Offering 06 Apr 2016 22:46 #6788

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There is a parable that goes something like this:

An older working gentleman who had put together a nice life for his family realizes the young son is having drug problems and was stealing the stuff around the house and was selling to pawn shops for pennies.

So he tells the kid, son please don't go selling my stuff for pennies, this is my life savings... I will pay you the small amount pawn shop sharks offer you... So the kid says "dad, how much for that chair you are sitting on?"

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Rights Offering 06 Apr 2016 22:51 #6789

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myownhedgefund wrote: Potential pluses and minuses but all we know for sure is Maxim gets paid again.
rothco....maybe they want to make you happy after all...LOL !



I love it... CYTXW.... Marc you cruel :evil:

Oh memories... :cry:

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Rights Offering 07 Apr 2016 04:04 #6790

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Wow.....

What a surprise. :whistle:

Many many things go through ones mind when you read this, main things being,

1. this is what we wanted 18 months ago and not now
2. we started than at 75 Mio shares and added 120 Mio- we still do not know who added the bulk of those shares and since Cytori is a unique- and rare Company, the number of conspiracy thoughts are just accumulating.
3. do we really have to cough up again for undeserved bonuses instead of the required cash coming from a partner deal?

Anyway- having gotten the negativity out of the way- I do welcome VIOLENTLY-, WHOLEHEARTEDLY- and UNCONDITIONALLY any shareholders involvement in financing if this has to be. I unfortunately cannot judge, whether "it has to be" and one is suspect again, that the self-serving masters of the Cytori Universe screwed up again in their partnering efforts. :whistle:

Anyway- this is my first reaction- will have to read the S-1 filing first before writing more..just this bit out of the CC in March as a reminder...

Our next question comes from Brian Matthews with Payden & Rygel.
Brian Matthews
Thank you. Hi, guys. Really good call. Very encouraging. So I have two comments and financing question. So regarding the reverse split or your Plan B, as you call it, it’s obviously not something as I would call as rational, but it is the right thing to be prepared to do. I think that’s a no-brainer. And if you need to do it, I think giving the Board some flexibility on the split ratio is exactly the right thing to do. Regarding operational performance, really impressed with the improvement, keep it up.
So my question is about financing needs. Have you considered a rights offering? I mean, if your capital needs are limited, what it now seems to be and you’re getting real close to put the ball in the end zone, why would you let existing shareholders participate at these levels as opposed to doing anything else for capital? Thanks. I will get back in queue now, and again nice job guys.
Marc Hedrick
Hi, Brian. I appreciate the comments and the question. Is the rights offering a possibility? The answer to that question directly, it is a possibility. It’s one of the portfolio of things we’ve looked out over the last year or two as an opportunity. We have had some interest consumer that you have articulated. There are some good things and bad things about it. The good things are that it’s non-dilutive to participants, it’s basically the most democratic way of doing an offering. Of course, we just - we spent so much work cleaning up our capital structure at the end of the year, it is one thing that maintains that clean capital structure and then allows existing shareholders to benefit from where we are today. So I guess I would agree that maybe a company like ours where I think we have an increasingly defined gap between where we are today and getting to profitability as we execute on the strategy. It could be a good alternative for us. So no decisions. I think we will take a deeper look at that. I think we are open-minded, but I think right now, we are just going to focus on the execution, be the sales and maintain the cost controls.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Rights Offering 07 Apr 2016 07:04 #6791

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rongside Only stock I remember with a rights offering is BTX (BTIM at the time) I believe they did several over the years. WARNING: Make sure your virus software is up to date as my computer blocked a few issues embedded in links while searching info on this.

cytxer...I chuckled at the reemergence of the CYTXW ticker as well.

Fas...Had to know when Rickey bought no partner was coming anytime soon although the rules on that can be a bit vague. Maybe even bozos get tired of be taken to the cleaners with those old deals. Maybe the realized no one else really wants the shares and the ATM would be dumping stock into a black hole. Maybe rothco's threats had a impact. All I know is I doubt get more $ out of me. This is where the R/S gets interesting. Will they under fund again or will there be real demand for the rights that they can raise some real money. I know DOV talks about the $20 million area needed but why not go for something more and take another chunk out of the debt and/or have a better cash cushion for those just in case issues that ALWAYS pop up with this company. Is Cytori management growing a pair ? Would demand support it ?

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Rights Offering 07 Apr 2016 08:32 #6792

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An interesting aspect is that the rights are not tradeable. My feeling is that this has two implications. It helps to keep these rights out of the hands of arbitrageurs who would short the stock as a hedged trade but it will also make it harder to raise funding. Although they are not tradeable, I suspect they can be sold in a private transaction but whether anyone would bother with these small numbers is questionable. IMHO, no real partner wants to pay up for the autologous model even when the scleroderma data look great. The other wild card is the pending ReGrow legislation that could see allogeneic therapies get conditional approval on Phase II data. It is too early to predict the odds on whether it moves forward but, it could hurt any approved autologous therapy by lowering the bar to off-the-shelf therapies which would be more desirable for obvious reasons, IMHO.

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Rights Offering 07 Apr 2016 08:53 #6793

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Based on CYTX history , this appears to be a CYA move and indicates to me R/S is coming. This way it will appear that shareholders are being taken into consideration and offered the opportunity to participate. No dates of offering and therefore if they are to R/S then would we be able to participate on shares we currently hold or our reduced amount. I am not impressed or swayed. This comes on the heels of increase in free shares to management. Pretty transparent move to me, lets see what the offering is. Surely a partnership announcement prior would give shareholders a bit more confidence that they are just not being offered the opportunity to throw good money after bad. Let's see the terms and what transpires. There better be more to this then what meets the eye. We shall see.

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Rights Offering 08 Apr 2016 11:04 #6794

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rothco619 wrote: Based on CYTX history , this appears to be a CYA move and indicates to me R/S is coming. This way it will appear that shareholders are being taken into consideration and offered the opportunity to participate. No dates of offering and therefore if they are to R/S then would we be able to participate on shares we currently hold or our reduced amount. I am not impressed or swayed. This comes on the heels of increase in free shares to management. Pretty transparent move to me, lets see what the offering is. Surely a partnership announcement prior would give shareholders a bit more confidence that they are just not being offered the opportunity to throw good money after bad. Let's see the terms and what transpires. There better be more to this then what meets the eye. We shall see.


Roth,

Basically this offering allows only existing shareholders to purchase shares at a reduced cost?

So if / when cytori BOD do the reverse split to get us above $1pps, then we can still purchase shares at a reduced cost? If it means I can drop another $50k on $0.25 shares, then I'm ok with it but it's likely not that dreamy.

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Rights Offering 11 Apr 2016 07:41 #6795

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I spoke with Tiago last Thursday. Here are a few bullet points:


It takes about two months for a rights offering to go through the approval process

If a partnership is not signed in time to provide non-dilutive cash, then this is the next best way to raise money

There will be some press releases in the next few weeks, but no one knows how the stock will react and it is best to be prepared

$10 million was chosen because that is the amount needed to get them through to the one year STAR results in mid 2017

Early indications are that Cytori will have no problem raising $10 million from existing stockholders

This method prevents Sabby and others to manipulate the stock. Only true believers will participate and the stock will not hit the market

If a partner purchases more than 20% of Cytori, the benefits from the SME program are withdrawn (just a side note and hoping any partnership will not involve an equity interest in Cytori)

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Rights Offering 11 Apr 2016 09:02 #6796

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Dov,
Other then being paid lip service, with many more promises, what tangible evidence do you see that would make you participate. I believe with others your prior warrants expired with 0 value. Management has yet to deliver, and it now appears that rather then letting results increase the PPS, a reverse split will be the chosen course of action. This of course is an easy way out that requires no execution just once again demonstrates the contempt that management hold for stockholders. The compensation , bonuses, and free shares continue to be bestowed upon this team and accepted while meeting 0 benchmarks. To think our president and CEO believes that 2015 was a great year for the company says it all. Why would they have difficulty raising 10 million from existing shareholders, when the majority of the shares are in the hands of off shore investors who in all likely hood have made millions shorting the stock and will now take those ill gotten gains and gobble up more of the company. When do you think this deception will end ? :evil: :puke:

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Rights Offering 11 Apr 2016 09:27 #6797

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RothCo-

The tangible evidence is clearly the discounted value of two pivotal Phase III clinics and that the "new inflection point" plan seems to make sense. I agree with virtually all other things you have written though as it concerns contempt towards shareholders. There is however little one can do though and turning back the clock for two years when Hedrick/Girao sold out to the hedge funds is also impossible. :cry:

I have put my family on budget control in order to participate in a maximum way depending on the terms. :whistle:

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Rights Offering 11 Apr 2016 09:36 #6798

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Thanks DOV
...but once again they are playing the balance sheet by the skin of their teeth. Same mistake over and over again !!!!!!!!!! They should be floating 10 million shares after a 1:20 split raising in the $40 million area instead of inviting the same old problems to return where something doesn't work out quite as planned or timing of events is a bit slower than anticipated. They could also throw extra funds at the debt, especially if things work in their favor.
From your comments it seems Cytori believes Sabby is now gone but one could still openly short and push the PPS around....just not from a position of nice protection.

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Rights Offering 11 Apr 2016 09:44 #6799

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Fas,
When RZ and I met with Marc and Tiago, we did discuss the topic of why they did not come to shareholders with the opportunity for funding. Tiago responded, that we would not like the terms. Perhaps that is why specifics have yet to be disclosed. I really can't understand why without solid evidence and just on the words of those who have done nothing but deceive us for years that you would be willing to take this risk . I guess the answer lies in your last words "depending on the terms". I need to see a hell of a lot more then that.

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