So I actually read through the 10-K and I'll be completely honest... I have no idea what to make of it, good or bad. On the one hand I expect tons of language stating the obvious - this is a new company on the bleeding edge of technology and has a very uncertain future. I get it. On the other hand, I'm not sure how this report will move PPS one way or another on Monday. They're reporting last year... we sort of knew they'd be racking up debt, continuing their research, and pushing possible business ventures to market what they've got. Which of you smart guys has been in this situation before (in the shoes of ONVO's current management staff)? If I had to guess, I'd say no one. This is a very unique thing happening. Comes with the territory I guess. Never forget - when dealing with speculative stocks, always play with the house's money after you take your initial investment out. ;)
I will try my best to analyze the company's 2012 operations. With a company like ONVO, it is important to remember that financials don't tell the whole story. The progress of the technology (through collaborations) and market exposure are of greater significance.
With that said, a quick look at the 10k did not bring up many unknowns. The company increased revenues by approx 23.5%. The increase is a positive sign, though nothing substantial. I believe the upcoming quarters will show greater revenue growth with the Knight Cancer Institute collaboration. Also, investors must keep in mind the launch of the first company product in 2014 (liver cell based assay) This should bring in substantial revenues.
The balance sheet has been cleared with the warrants being exercised which also added cash in exchange for Warrant Liability. Though there is still a great amount of warrant liability (20.6), the company should have that cleared up by 1Q 2013 as the stock price was trading at $2.50 for the required duration. This will add further cash/capital in exchange for liability elimination. Aside from the warrant liabilities (which are non cash- this is important), the company carries no other significant liabilities approx (1mill). Their cash position is very strong at 14.8 mill with more coming in Q1 due to more exercised warrants.
Overall, results aren't earth shattering nor disappointing. Pretty much in line with whatever expectations there were, if any. I will give them a closer look soon and post whatever I am able to find. Patience will be a virtue that investors must be willing to deal with for returns in ONVO
If you have a chance to take an accounting or finance class at your local community college it will make you a better investor/trader, you will understand the statements a little better.
`` In November 2012 we executed an additional agreement with United Therapeutics describing additional research scope and providing for additional collaborative research funding, in an expansion of the original agreement from October 2011.``
Looks like the agreement with United Therapeutics was renewed. This is a good sign as it shows the technology is for real and that United Therapeutics liked what its seen thus far to give it an extension.
``We disclosed in 2012 that we had delivered constructs to Pfizer for internal evaluation as partial completion of the collaboration agreement; we additionally have delivered a study report to complete the scope of work in the original collaboration agreement. Constructs delivered by Organovo are currently being evaluated in the collaborator’s laboratory, and we anticipate that an additional agreement or agreements will be arrived at to utilize Organovo tissues in its future research efforts, although we can give no assurance that future agreements will be arrived at.``
Looks like they are waiting for Pfizer to evaluate the results before they move forward. Investors should keep an eye on this to see if an agreement in renewed.
Thank-You for the translation. Question, the warrants were shares given in place of monetary payment and can be exercised (cashed in) after the share price stayed above $2.50 for a specific duration, and how many shares are we talking? Was this last downturn in share price due to these warrants being cashed in and can we expect the same to happen again when the balance of these warrants are exercised?