Everything was going well with Guided Therapeutics Inc (OTCBB:GTHP, GTHP message board), until the company published its disastrous announcement on Tuesday.
Needless to say that all GTHP enthusiasts were eagerly expecting the FDA's approval of the company's product. There was only one possible reaction from said investors when they were slapped with the announcement that said approval was not given.
In spite of GTHP's reassuring words that the FDA simply wants more data “before granting approval”, many investors abandoned ship – and who could really blame them?
Put simply - a lot depended on this approval. It was a crucial step on GTHP's road to profit, and now it has been delayed for who knows how long. Now, medical companies run into that sort of thing all the time, and to be honest, this turn of events would not be all that big of a deal, if the company's latest financial report didn't look like this:
Cash and cash equivalents - $18 thousand
Total current assets – $1.5 million
Total current liabilities – $5.1 million
Sales - $127 thousand
Net loss - $1.2 million
With so little cash on hand, GTHP can ill afford to wait any amount of time at all. By all accounts, it looks like it may be forced to rely on selling more stock to fund its operations, so prudent investors should probably look out for more dilution.
The silver lining in this whole situation is that the other part of the report is actually not that disastrous – especially if you consider the fact that $714 thousand of the $1.2 million reported under “net loss” can be attributed to Change in fair value of warrants.
It's up to investors to decide what to make of all these facts, but a word of warning is probably in order here. GTHP seems to be walking on thin ice, and with this latest delay, it now seems like said perilous walk just got extended – perhaps drastically.
Yes sales "any day now" according to Gene. Oops he said that 6 months ago and we are still waiting for orders. He even double production capacity ahead of those "large orders"in the fall of 2014. Well we have the manufacturing capacity....
Sale the company to Imhoff or a private investor for @25 cents and call it a day. Let's see what Gene says tomorrow. We are down to the sample data is too small but another PMA will take too long IMHO. Curious what Gene will say about other paths to approval.
Me too. Personally think an approval with "conditions" (best case) ahead of financing you might see 50 cents. 75 cents would be max IMHO. FDA next week but no one is adding here. Show me stock. Well we need good FDA move or stock dilution will make GTHP a sub 10 cents stock. I bought because of the product so I am hoping for good FDA news. FDA is on the brink of killing this company. What a shame.
I believe GTHP paid the interest in the preferred shares with stock instead of cash.
Sadly it very true. It is a FDA flip of the coin. They need path forward to approval to get decent financing. I am hoping for a conditional approval. I expect for the FDA to request a follow-up study. They can use the data they are gathering in Peru. It would be devastating if the FDA requested for GTHP to refile with the results from the new study. The only reason I am in the stock is because the balance and fair option is for the FDA to give GTHP an approval with conditions. Under that scenario the stock moves back to 50 cents and they can secure financing at favorable terms. Then it is up to Gene to start closing sales. I hope his last year at GTHP has taught him how to be more effective.
I am long GTHP. However, I am not blind to the repeated underperformance by Mr. Cartwright. He lacks experience (first time CEO) and has failed to deliver repeatedly. Numerous mistakes (doubling production) and inability to meet his own guidance regarding many tasks. We can discuss the facts regarding the "performance" of Mr. Cartwright. I do not care how many shares you have or not. I am open to discuss Mr. Cartwright's performance with you anytime. That is the real issue. I believe I am factual regarding the facts that indicate Mr. Cartwright's tenure so far is a complete failure.
Cartwright hyped Bangladesh and Kenya. After 6/7 months of hearing "any day now", GTHP announced the sale of 1 machine to Kenya. Now we have to wait at least 45-60 days to find out if we will get a follow-up order of any size. Wondering about Bangladesh. After all that hype are we going to get an order for 1 machine as well? Where are the large orders GTHP has repeatedly promised to investors? At the end of the day, we never seem to receive that large order from Kenya, Bangladesh, Nigeria or Mexico. Expect Cartwright to hype those territories during the conference call, but do not expect any orders of any significance. That is the pattern. Q1 will pretty horrible with sales declining sequentially quarter over quarter. So, no sales or orders but we get a FDA update it seems. FDA "Any day now" for sure and sales in late 2015... Imagine that it sounds like 2014... just keep moving when you will receive those orders and everything will be fine Gene. Hey, maybe it is time to double production again. We can borrow money from Toniquent at 18% or given them shares in case by some miracle we get a path forward from the FDA.
Add the numerous pumpers as another negative to the list. No thought whatsoever just BS posts claiming the stock will move higher.
Agree. That is the reason I am lending the money to Larry unless GTHP gets FDA approval then he can pay me with GTHP stock priced at 25 cents :-). The mgmt of GTHP makes this company a very difficult hold. I am hoping for a good FDA outcome because without it GTHP is worthless IMHO.
Larry, I have money I want to lend you at 18% unless GTHP gets FDA approval and then I can get GTHP stock at 25 cents. Seems fair :-)! I will that for you... My pal.
First time CEO. He has no idea how to manage expectations. I am still amazed the guy double production in the Fall despite having no orders, deposits or commitments. Not even a first time CEO should be that reckless. Worse part he doubled production during a cash crunch. Now all the capacity is idle and we are paying 18% for the Tonaquint loan and they can convert at 25 cents if we get FDA approval. Wow!
Just announced Tonaquint amending when note will be due to July 10. I guess they are desperate since GTHP does not have the money. It seems the rate is at 18 percent (credit card rate here) or they can convert at LESSER of 25 cents or 5 days weighted average before conversion. Translation, they can get all the upside of a good FDA announcement but no risk because they just collect 18% on the note instead. More dilution. Good for Tonaquint. bad for GTHP shareholders.
I am changing the name of Gene Cartwright from "Any day now" Gene to "One machine" Gene. He does not seems to be able to sale more 1 machine at the time.
Do I need to post the PR from late 2014 clearly stating they expected FDA announcement by the end of January 2015? How about the PR in February..... a couple more weeks? Oops maybe a couple more months? Do you think this mgmt team has any credibility?
In 2014 GTHP they wrote a PR saying FDA by the end of January. In February they told us a couple more weeks. Now they are saying May. Same issue with orders. Cartwright wrote and talk about a large order from Kenya and Bangladesh last year. In Nov/Dec he was talking " any day now" for Kenya. Finally this week we get an order for 1 machine. Follow-up order maybe 45 days from now? The same pattern over and over again. Another PR release saying refiling of PMA to be completed by end of June. They repeated the same guidance at two investors conference only to refile more than 30 days late. Is does not matter if you are discussing orders, FDA, or refiling a PMA. Same story. Over promise and grossly under deliver. Those are the facts. Gene should not be providing guidance and timetables if we does not have a clue. His worse yet was doubling production in the fall of 2014, spending money they do not have, for orders that were never received. You double production and you do not have any orders, commitments or deposits? Is this guy a first time CEO or something? Oops, he is.
Agree. Did you decide to buy back GTHP? A lot people pumping the stock. I am sure I will receive a ton of thumbs down but no intelligent replies.
In my opinion there are several factors pushing GTHP lower:
1. Investors, as "guided" by Mr. Cartwright, were expecting an announcement of the Kenya order this month. The expectations were for a large order. Instead GTHP announced the purchased of 1 machine. Follow-up orders are at least 45 days away. As a result, the possibility of a pop from another order ahead of earnings or FDA is no longer available.
2. The current sales forecast for Q2 is what mgmt was expecting to Q4. Q1 will be reported next week. Q1 sales will decline sequentially for the second quarter.
3. This is the third time Cartwright has indicated the FDA is close to a decision. FDA is only a trading event because of the lack of orders.
4. Financing is looming again. If there is no path forward with the FDA dilution will take GTHP to @ 5-10 cents. A pop from FDA will last only until the new financing is announced. Expect Cartwright to sale shares at a discount again.
In conclusion, we have a mgmt team that has over promised and under deliver, no possible orders in the pipeline for the next 45 days, and financing regardless of FDA.
During the conference call I am sure Gene will discount the Q1 disaster and talk about the second half of 2015. Please remember this is similar to 2014 when sales were suppose to ramp up in the second half. The company even double production ahead of these orders. If FDA does not provide some type of path forward the shares are basically worthless.