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Cytori Therapeutics, Inc. Message Board

  • crkenmore crkenmore Oct 1, 2012 10:13 AM Flag

    Cytori: Anticipated Funding Needs , The Real Reasons for the Stocks Decline?

    Dov’s analysis is an important and compelling contribution to understanding the long term value and opportunity for Cytori. My concern is the near term. Cytori does indeed have a very real C/F challenge. Cytori Therapeutics may have resumed it’s share price decline due to Cash Flow concerns, and the reasonable likelihood that the firm will need to raise capital via a secondary. YE 2011 had negative C/F from operations of $ 35.3 million. Cytx financed its operations via $15.9 million in new stock issuance, and $ 4.9 million in new debt. At YE they had $ 36.9 million in useable cash, and negative operating income of - $ 29.4 million plus interest expense of $ 2.8 million. Result is approx. $ 5 million in useable cash.Unless either revenues or gross margins dramatically increase, Cytori will need to increase debt or issue stock to meet C/F operating requirements. Since the debt load is already high at $ 24.8 million, new stock issuance may be the only alternative. Stock could drop to $ 2.42- $ 2.82. Let's look at facts and then conjecture. The new BARDA contract is an important vote of confidence in the Cytori technology, but actual funding from any government entity is uncertain until the key players in the executive and legislatives branches of government resolve the $ 1.2 Trillion budget deficit or conversely realize the results of the sequester of funding, including all new awards. Citori may be vulnerable to significant near term share price retrenchment until they solve their C/F problem. Cytori is in a weak cash position and likely needs funding soon. A near term partnership may be in the offing, this is conjecture and difficult to dimension until and if it happens. The best partnerships outcomes are negotiated from a position of strength. The reality of Cytori funding needs, will be known to prospective partners, and that weakness will be reflected in the final deal. The uncertain status of the strategic partnership with Olympus also adds to uncertainty.

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    • the cash flow deficit is curing at a rapid pace: 1.BARDA reduces projected cash needs by a significant percent because much of the admin and clinical expenses can now be allocated against this contract (proportional accounting), 2.Okyanos revenues start to kick in Q4 and ramps in 2013, which produces cash from product gross margin that offsets operating expenses, and 3.the two more strategic deals expected to be announced before year end (as stated by management) - even if they are collectively half the size of BARDA, will more than offset most near term cash needs --

      bottomline -- all signs point to 2013 and beyond to be a lot less dilutive than prior years - this little company is maturing (thanks to BARDA et al)

    • The fact of the matter is that there are many short term traders still in this stock because it has provided many short term trading opportunities. I hope today's decline IS related to concerns about a possible secondary because, personally, I now feel very confident that it is NOT going to happen. Chris Calhoun opened the call talking about other transactions still in the works and the successful completion of this terrific BARDA transaction turns the tide a bit in favor of Cytori's negotiating position. These guys KNOW that shareholders don't want further dilution and the balance sheet is type priority. It wouldn't even surprise me, given the much reduced risk profile of Cytori in light of the $106,000,000 (that's a lot of zeros for a small company) contract, that the GE credit line could easily be pushed out further if necessary.

      Bottom line, even though the BARDA deal didn't solve the balance sheet problem, it greatly improved the odds of a shareholder friendly near term solution, IMHO. Due your own DD.

      WST

      Sentiment: Strong Buy

    • Also, im not opposed to a split. 3 for 2 or 5 for 1.
      I wouldnt mind encouraging more investors to come intot his stock. Its going to hit $50pps nomatter what. Its all relative.

    • Also, im not opposed to a split. 3 for 2 or 5 for 1.
      I wouldnt mind encouraging more investors to come intot his stock. Its going to hit $50pps nomatter what. Its all relative.

    • "but actual funding from any government entity is uncertain until the key players in the executive and legislatives branches of government resolve the $ 1.2 Trillion budget deficit or conversely realize the results of the sequester of funding"

      LOL. You do realize O'Romney or Rombama is being elected and therefore the Federal Reserve will never be reeled in. PRINT PRINT PRINT. Also the STOCK (stop trading on congressional knowledge) ACT is stalled.

      Therefore welcome to the PLUTOCRACY disguised as a democracy. If Tel Aviv has its way, Cytori will be treating a lot of radiation burns very soon. LAVON AFFAIR x 1000

      Sentiment: Strong Buy

    • The real reason for the stock fall today is that over 80% of the stock is in the hands of retail investors (us). This is not acceptable to the hedge funds and their market making cronies. Our shares must be taken away from us, and they will try every trick in the book. This tree is going to be shaken hard and often. DO NOT BUY ON MARGIN.

      Being under $5 we are still under the radar of most institutional investors . The professionals will not drive the stock up against themselves. They know that most individual investors who are overweight a stock cannot handle the volatility. Lets face it most of us regulars are probably overweight CYTX ....... nothing wrong with that so long as you can sleep at night.

      Good advice from JP Morgan: "Sell to the sleeping point".

      With regard to the Olympus-Cytori Joint Venture:

      "The Joint Venture currently has exclusive access to our Celution System device technology for the development, manufacture, and supply of such systems to us. Once a second generation Celution System is developed and approved by regulatory agencies, the Joint Venture will exclusively supply us with these systems at a formula-based transfer price. We have retained all marketing rights (subject to our various distribution agreements) to sell the Celution System devices for all therapeutic applications of adipose stem and regenerative cells. "

      CYTX retains the right to sell the Celution device. The joint venture sells it to CYTX. I do not believe that Olympus can block CYTX from distributing a CelutionTwo device. In any case there are approximately 5200 hospitals in the USA, if each one had 5 devices at $10K apiece then the total infrastructure cost would be $260M. The revenue and profits are disposables driven. If Olympus wants to play in regenerative medicine then it will be by partnering in fistula etc.
      They know the potential ......... unfortunately for them their past transgressions have been expensive in more ways than one.

      Sentiment: Strong Buy

    • ***The uncertain status of the strategic partnership with Olympus also adds to uncertainty.***

      Not to me !!!!!!!!!!!!!
      I like it !!!!!!!!!!!!!!

    • GIVE IT UP SHORTY -- DOV already responded to you, although I don't know why he was naive enough not to recognize you for what you are, SHORTY!

      Sentiment: Strong Buy

      • 1 Reply to cytecchio
      • First, let's get the record straight. I am not nor do I have any intention in shorting CYTX. My interest is long, however I do not want to contemplate taking on additional exposure in a volatile market where unpredictable externalities that weigh on the overall market are compounded by Cytori specific uncertainties. The near term funding shortfall is real, the status of the Olympus strategic relationship is unclear, the promise of new partnerships is as yet unrealized. I would rather add positions at a higher price when the 2013 funding issue is in the rear view window, than take the possible pain of a Q-4 stock price decline that could reach recent August levels of $ 2.40 to $ 3.00. IMO the question of Cytori's long term prospects are not in question.

 
CYTX
2.07+0.02(+0.98%)Aug 1 4:00 PMEDT

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