Given ARTE's current scenario, what are their options to raise more cash? Let's please have an intelligent discussion without the kindergarten non-sense and inane blabber.
The question is who would put more of their assets onto the deck of the Titanic? I know this space. I have spent a large amount of time assessing products and their place in the market. Artes' product has a place in the market but it is a very small portion of a niche market. Their production overhead is way too large for the amount of sales potential they have. By the time they unwind all of this I'm afraid it will be too late. They will burn through what little cash they have.
It would seem that the only 2 realistic options are 1.A second round of shares being sold. 2. Another private loan.
The first option seems unlikely due to the current share price, the dilution would be huge. The second option would I imagine be dependant on their sales performance over the coming months. This makes this option highly unlikely also. To hit even their low estimate for the year they now have to generate about 3.5 million in sales for each of the next 3 qtrs. They have not even come close to this number in any qtr so far and it seems highly umlikely that they will suddenly perform to this degree for 3 qtrs in a row. I suppose a massive reverse split to reduce the number of shares outstanding and then a second placement of shares to raise more money seems the most likely option, so lets call that option #3. The reality is that they simply cannot seem to generate any meaningful sales volume despite a steady increase in Physicians trained.
I also wonder why they are conducting these studies to show that the product is safe and superior to its competition. Is it because they are getting feedback from the Physicians that the Users are nervous about using it or is it because the FDA has told them that they must conduct these studies to provide data that would persuade the FDA to allow them to remove the skin test?
1,000 people in the study tell 10 friends = 10,000 tell 10 friends = 100,000 tell 10 friends = 1,000,000 tell 10 friends = 10,000,000 (and so on...) And if just a small percentage of these friends try the product, it is a success...
The viral loop...
Since the product doesn't sell anyway, they can afford to give it away for now in exchange for intangibles. I, for one, wouldn't seek out a clinical trial for cosmetic surgery, neither would the vast majority of people. What ARTE is trying to do (I think) is come up with some great before/after results, get the physician's acquainted with the procedure and get some buzz out there.
Frankly I don't really get the current strategy. On the one hand they have initiated more marketing and increased the sales force to increase sales. On the other hand they are giving out free Artefill treatment to about 1000 people who are willing to enroll in this safety study. Seems to me that this study is simply screwing the increased sales effort. Why would you pay to be treated if you can sinply enroll in the study??
ARTE needs capital. This sales push, that cost Goosetree her job, was long overdue and isn't enough. Unless some big players, either venture capitalists or perhaps Allergan et al. sees unrealized potential in Artefill, ARTE is toast. They've brought in a CFO who specializes in taking troubled companies into bankruptcy. That is his area of expertise and it tells you where Reinhard's head is at. He's been trying to sell ARTE's potential for years and it just isn't working out. So Goosetree takes the fall and let's start over again.
Yes, they are trying to get the buzz out there, BUT they are going bankrupt doing so. They definately did NOT have a clear plan as to how they were going to market the product to the consumers and doctors. The trials to show how safe the product is a great idea and is working, but they should of made the total number of patients to recieve this lower.
Please do not forget that doctors & consumers are constantly bombarded with empty promises, especially in the vanity marketplace. The ability to demonstrate quantifiable, scientific results is paramount to the long term positioning of ARTE. This includes operating as an ongoing concern or selling the technology/company.
While it does little in the short term, these studies are the correct thing to do and will directly determine the types of claims that ARTE can make in its marketing and sales efforts in future. This has the potential to become a key differentiator down the road.