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TOPIC: Cytori Going Concern issues summarized

Cytori Going Concern issues summarized 07 Oct 2018 06:17 #12284

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As stated before at various occasions, this last quarter of 2018 should bring us clarity whether Cytori can continue as a Going Concern and will be able to meet its obligations or simply goes bust or gets sold.
The below is an overview of where we are today and what needs to happen to continue the development of the two technology fields- i.e. nanomedicine and CCT.
Cash available-
At Q2 end Cytori had 3 Mio in the bank and raised net 5.7 Mio from the Rights Offering in the ensuing Juli period. Total 8.7 Mio therefore, which clearly should be enough to operate until year-end 2018, since first half 2018 cash-flow was 6.8 Mio and included some big non-recurring payments like the rental settlement of 0.5 Mio and others. Also, the minimum required bank balance in the Oxford agreement of 1.5 Mio, should not become an issue.
Fund raising facilities established
On June 1 closed an ATM arrangement with Riley to sell shares on the market for up to 6.5 Mio based on Cytori requests at prevailing market prices. Surprisingly Cytori elected not to use this facility in June although PPS was- pre-RO announcement- considerably higher (5x) than after this announcement, since the PPS tanked considerably as could have been expected. Note- the Cowens ATM has been terminated on the same date.
On September 21 Cytori sold 3.7 Mio shares to Lincoln Park which should raise an anticipated 5 Mio. Obviously the math at present PPS is quite sobering and cannot raise anything substantial at current prices, so should be viewed as a future financing facility. It should however be noted that approx. 10% of the shares sold, will go to Lincoln on the effective date of the facility. Last Friday- October 5- Cytori filed the prospectus with the SEC- so one can expect the effective declaration later this week. Both facilities require adherence to the so called Nasdaq Exchange Cap restrictions.
The "Oxford" debt of 13+ Mio
Recently Cytori managed to extend the interest "only" period on this debt to January 1 2019 on the condition that 7 Mio as redemption is due from a deal closed (basically anything except fund raising) or due from Cytori at year-end if a deal is NOT closed.
Conclusion
Most likely, the fund raising facilities do not allow Cytori to raise sufficient funds to full fill the 7 Mio repayment obligation, so something- a partner deal with upfront cash or a sale of part or a sale of the whole business is required in order not to forfeit on its assets, inclusive IP. As stated before, we are at crossroads- make or break of a Company who I still believe has a lot of valuable assets and still a bright future, assuming the cash issues can be resolved.
Time will tell and that time is relatively short i.e. less than 3 months.
Later on- after visiting my fitness studio- I will post some observations of the last couple of months.
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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:

Cytori Going Concern issues summarized 08 Oct 2018 12:24 #12285

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fas wrote: As stated before at various occasions, this last quarter of 2018 should bring us clarity whether Cytori can continue as a Going Concern and will be able to meet its obligations or simply goes bust or gets sold.
The below is an overview of where we are today and what needs to happen to continue the development of the two technology fields- i.e. nanomedicine and CCT.
Cash available-
At Q2 end Cytori had 3 Mio in the bank and raised net 5.7 Mio from the Rights Offering in the ensuing Juli period. Total 8.7 Mio therefore, which clearly should be enough to operate until year-end 2018, since first half 2018 cash-flow was 6.8 Mio and included some big non-recurring payments like the rental settlement of 0.5 Mio and others. Also, the minimum required bank balance in the Oxford agreement of 1.5 Mio, should not become an issue.
Fund raising facilities established
On June 1 closed an ATM arrangement with Riley to sell shares on the market for up to 6.5 Mio based on Cytori requests at prevailing market prices. Surprisingly Cytori elected not to use this facility in June although PPS was- pre-RO announcement- considerably higher (5x) than after this announcement, since the PPS tanked considerably as could have been expected. Note- the Cowens ATM has been terminated on the same date.
On September 21 Cytori sold 3.7 Mio shares to Lincoln Park which should raise an anticipated 5 Mio. Obviously the math at present PPS is quite sobering and cannot raise anything substantial at current prices, so should be viewed as a future financing facility. It should however be noted that approx. 10% of the shares sold, will go to Lincoln on the effective date of the facility. Last Friday- October 5- Cytori filed the prospectus with the SEC- so one can expect the effective declaration later this week. Both facilities require adherence to the so called Nasdaq Exchange Cap restrictions.
The "Oxford" debt of 13+ Mio
Recently Cytori managed to extend the interest "only" period on this debt to January 1 2019 on the condition that 7 Mio as redemption is due from a deal closed (basically anything except fund raising) or due from Cytori at year-end if a deal is NOT closed.
Conclusion
Most likely, the fund raising facilities do not allow Cytori to raise sufficient funds to full fill the 7 Mio repayment obligation, so something- a partner deal with upfront cash or a sale of part or a sale of the whole business is required in order not to forfeit on its assets, inclusive IP. As stated before, we are at crossroads- make or break of a Company who I still believe has a lot of valuable assets and still a bright future, assuming the cash issues can be resolved.
Time will tell and that time is relatively short i.e. less than 3 months.
Later on- after visiting my fitness studio- I will post some observations of the last couple of months.


Fas, likely a double or triple before y/e imo - otherwise BK.

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Cytori Going Concern issues summarized 08 Oct 2018 13:54 #12286

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Most likely, the fund raising facilities do not allow Cytori to raise sufficient funds to full fill the 7 Mio repayment obligation, so something- a partner deal with upfront cash or a sale of part or a sale of the whole business is required in order not to forfeit on its assets, inclusive IP.


I think even the most ardent Cytori believers realize no white knight partner will materialize. If there was one to be had, it would have come soon after the Azaya deal as promised. All that deal did was hasten Cytori's demise by increasing overhead. Sad situation yet the CEO never even took a paycut. It's a wonder the board let him stay on this long although there can't be many candidates who would step into the quicksand that Cytori has become.

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Cytori Going Concern issues summarized 09 Oct 2018 10:27 #12287

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I think it’s riding on the forthcoming French data, good data could provide a fresh shot of adrenaline and pps support, bad data, game over.

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Cytori Going Concern issues summarized 09 Oct 2018 13:52 #12288

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b767cpt wrote: I think it’s riding on the forthcoming French data, good data could provide a fresh shot of adrenaline and pps support, bad data, game over.


Yeah- I think that is one of the possibilities, but there are others too.

just a few observations on the money raising of the past two years - take it for whatever you think its worth-

1. As stated in my post above- I was quite surprised to read in the Q2 (18) report that no funds were raised through the Riley facility in June 18. They know that the stock tanks on filing bad news (S-1 later in June)- negligence? or did they really think the RO # 3 would raise more than 12 Mio????? - they have shown different -see 3.

2. I still believe the Maxim secondary in April 17, which raised 9,5 Mio and was made at a deep deep discount to market at 1.1$ per share with prevailing market of >1.8$ was done since they knew the 24 weeks primary endpoint of STAR, which failed as was announced on July 24th 2017. Why do this secondary when you think your PPS shoots sky-high a few weeks later because of STAR?

3. Similarly, on December 22 2016, they did the first Lincoln Park deal (which was paid for with shares- lol). That facility was hard used in the first half of 2017 (see 2.) Only 103K pre-split shares sold to Lincoln. However - in the period Juli 1 until July 24th (STAR results) they sold 1.9 Mio pre-split shares to Lincoln and raised a quick 1.7 Mio $ in no-time.

4. From the above (3) it is clear that Lincoln Park cannot have been happy campers with their December 16 deal. They were stuck with a lot of pretty worthless shares (as of now still 68K+ post-split, so >680K pre-split and must have lost a lot of money on CYTX. So- why would they do a second deal as announced on September 21 2018?

5. Probably because the primary endpoint, which is 12 weeks Cochin, which was statistically significant in STAR, is the same in SCLERADEC II and Cytori already knows that as they did with the failure on STAR at 24 weeks. Could be something different too, but this is obviously the most likely one. It is also clear that if the stock tanks on Scleradec II results, the facility will not help at all in meeting the obligations to Oxford, so the 100K$ spent on the deal a waste of money.

6. The presentation filed in June 2018 for the RO #3 kind of "demotes" the scleroderma opportunity to the very back-end i.e. like it is not relevant any longer- see filing below- which would speak for something else to happen. Whatever- we will know soon enough.:grin:

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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:

Cytori Going Concern issues summarized 01 Nov 2018 07:25 #12324

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fas wrote: 6. The presentation filed in June 2018 for the RO #3 kind of "demotes" the scleroderma opportunity to the very back-end i.e. like it is not relevant any longer- see filing below- which would speak for something else to happen. Whatever- we will know soon enough.:grin:
[/attachment]


Than again- in respect of the milestones anticipated for the "future", it is still listed on top.... :whistle: -anyway- looking at the list- they did get the Puregraft royalty payment right..:grin:

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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:
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