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Cytori Therapeutics, Inc. Message Board

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  • eyesandears51 eyesandears51 Oct 29, 2012 2:56 PM Flag

    Business Partnership Update

    Folks, here's how sequestration works. Only entitlement programs that are enshrined in law and outside of the budgeting process, are exempted, that is Social Security, Medicare......et al. Beyond that there is a prescribed allocation of cuts between existing DOD and non-DOD programs. Unless the BARDA program is enacted by congress and signed by the president to be classified as an entitlement it is not exempt from the sequester. Most current contractors, or in Cytori's case, new contractors, to the federal government are understandably concerned about the impending impact. Will their program be cut permanently or temporarily, will they re-reimbursed if work is continued retroactively when a budget is passed? With a $1.2 trillion budget gap that will be closed by spending cuts, higher taxes, or a combination of both, everything is on the table. To believe otherwise is providential hope, not an actionable plan. Cytori, may ultimately get it's funding, the question is when. For a small company with rapidly depleting cash, this could be a real problem. As an current investor, I can not rely on BARDA because it's impact on Cytori is inherently unknowable until the federal budget is clarified either through sequestration, or preferably by passing a budget. Cytori management has few if any options to impact BARDA, what they can affect is funded commercial partnerships that will address their near term cash flow shortfall and strategically position the company for accelerated future growth.

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