cytx-8k_20161109.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

Current Report 

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  November 9, 2016

 

CYTORI THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

001-34375

33-0827593

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification Number)

 

 

3020 Callan Road, San Diego, California 92121

(Address of principal executive offices, with zip code)

 

(858) 458-0900

(Registrant's telephone number, including area code)

 

n/a

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 □

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 □

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 □

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 □

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 2.02Results of Operations and Financial Condition

 

On November 9, 2016, Cytori Therapeutics, Inc. (Company) issued a press release announcing its financial results for the third quarter ended September 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information disclosed under this Item 2.02 in this report, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as expressly set forth in such filing.

 

Item 9.01Financial Statements and Exhibits

 

(d)Exhibits

 

Exhibit No.     

Description

99.1

Cytori Therapeutics, Inc. Press Release, dated November 9, 2016 *

 

*

Exhibit 99.1 hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as expressly set forth in such filing.

 

 


 


 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

CYTORI THERAPEUTICS, INC.

 

 

Date:  November 09, 2016

By: /s/ Tiago Girao

 

Tiago Girao

 

VP Finance and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 


 


 

Exhibit Index

 

Exhibit No.     

Description

99.1

Cytori Therapeutics, Inc. Press Release, dated November 9, 2016 *

 

 

cytx-ex991_6.htm

 

Exhibit 99.1

 

 

Cytori Therapeutics contact

Tiago Girao

+1.858.458.0900

ir@cytori.com

 

 

 

 

Cytori Reports Third Quarter 2016 Business and Financial Results

SAN DIEGO, November 9, 2016—Cytori Therapeutics (NASDAQ: CYTX) (“Cytori” or the “Company”) today announced its third quarter financial results and provided updates on its corporate activity and clinical development.

 

Third quarter 2016 net loss allocable to common stockholders was $5.4 million and $0.26 per share. Operating cash burn was approximately $4.6 million in the third quarter 2016. Cytori ended the third quarter of 2016 with approximately $15 million of cash and cash equivalents.

 

Selected Recent Highlights:

 

BARDA, a division of the U.S. Department of Health & Human Services, increased its contract funding to Cytori

 

Completed enrollment in its of US STAR phase III trial for scleroderma hand dysfunction

 

Reported 48-week follow up data from US pilot/phase II ACT-OA trial

Additional limited regulatory approvals received by Cytori customers in Japan for use at their clinics of Cytori® Cell Therapy™ for osteoarthritis of the knee

 

Q3 and Year-to-date 2016 Financial Performance

 

 

Q3 2016 and year-to-date operating cash burn was $4.6 million and $15.4 million, compared to $6.2 million and $15.9 million for the same periods in 2015, respectively

 

Q3 2016 and year-to-date total revenues were $2.6 million and $8.4 million, compared to $2.5 million and $8.3 million for the same periods in 2015, respectively

 

Cash and debt principal balances at September 30, 2016 were approximately $15 million and $17.7 million, respectively

 

Q3 2016 net loss allocable to common stockholders was $5.4 million or $0.26 per share, compared to a net income of $1.5 million or $0.15 per share (or a net loss of $5.8 million and $0.56 per share when excluding a non-cash credit charge of $7.3 million related to the change in fair value of warrant liabilities) for the same period in 2015

 

Year-to-date net loss allocable to common stockholders was $17.1 million or $1.06 per share, compared to $16.6 million or $1.87 per share (or a net loss of $21 million or $2.36 per share, which excludes a non-cash charge of $5.0 million related to the change in fair value of warrant liabilities and a beneficial conversion feature charge for convertible preferred stock of $0.7 million) for the same period in 2015

“In Q3, we continued our focus on operational efficiency and maintaining momentum in our clinical development programs, we reduced our quarterly net losses by 7% and our operating cash burn by 25% from Q3’15 to Q3’16, respectively,” said Tiago Girao, VP of Finance and CFO of Cytori Therapeutics. “Our forecasts indicate that cash on hand coupled with efficient management of expenses, projected revenue growth, and modest influx of capital from a combination of business development activities and potential use of our ATM facility, will fund operations through mid 2017 and to important future milestones.”

 

Anticipated Forthcoming Milestones:

 

IDE approval for thermal burn trial related to our contract with BARDA

 

Report of 48-week US pivotal/phase III trial data for scleroderma hand dysfunction

 

Complete enrollment on Japanese phase III for urinary incontinence

 

Expansion of the Japanese osteoarthritis treatment centers

 

 


 

Updated 2016 Financial Guidance

The Company expects full year 2016 combined product and contract revenues to be lower than prior expectations based on the Company’s third quarter 2016 revenue results and the Company’s revised forecasts for the Managed Access Program fourth quarter 2016 product revenue.

 

Combined product and contract revenues anticipated to be within a range of $11 million to $13 million

 

Operating cash burn anticipated to be within a range of $19 million to $20 million

 

Management Conference Call Webcast

Cytori will host a management conference call at 5:30 p.m. Eastern Time today to further discuss the Company's progress. The webcast will be available live and by replay two hours after the call and may be accessed under "Webcasts" in the Investor Relations section of Cytori's website. If you are unable to access the webcast, you may dial in to the call at +1.877.402.3914, Conference ID: 9218454.

About Cytori

Cytori Therapeutics is a late stage cell therapy company developing autologous cell therapies from adipose tissue to treat a variety of medical conditions.  Data from preclinical studies and clinical trials suggest that Cytori Cell Therapy™ acts principally by improving blood flow, modulating the immune system, and facilitating wound repair.  As a result, Cytori Cell Therapy™ may provide benefits across multiple disease states and can be made available to the physician and patient at the point-of-care through Cytori’s proprietary technologies and products.  For more information: visit www.cytori.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements that involve known and unknown risks and uncertainties. All statements, other than historical facts are forward looking statements. Such statements, including, without limitation, statements regarding having forecasted cash on hand sufficient to fund operations through 2017 (based upon expected expense containment, revenue growth and modest ATM usage), anticipated FDA approval of Cytori’s IDE submission for a thermal burn trial, anticipated receipt and disclosure of 48-week STAR data, completion of enrollment of the Cytori-supported, investigator-initiated Phase III ADRESU trial (male stress urinary incontinence), expected expansion in the number of clinic in Japan that apply for and receive regulatory approval to use Cytori Cell Therapy for knee osteoarthritis, and reiterated financial guidance (projected operating cash burn and total revenues for FY 2016), are subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks include clinical, pre-clinical and regulatory uncertainties, such as those associated with conduct and completion of the Company-sponsored ACT-OA and STAR trials and proposed BARDA would trial, as well as the Company-supported, investigator-initiated SCLERADEC-II and ADRESU trials. Specifically, the Company faces risks relating to failure to achieve full enrollment of SCLERADEC II and ADRESU trials, risks in the collection and results of ACT-OA, STAR, SCLERADEC II, ADRESU and other clinical data and related final clinical outcomes (including the risk that clinical data from one or more of these clinical trials will fail to demonstrate safety or efficacy of the Cytori Cell Therapy, and risks that insufficiently positive clinical data will adversely affect the regulatory approval pathways and commercial prospects for ECCS-50, CCO-50, DCCT-10 and the Company’s other potential products.  Some of these risks also include risks relating to regulatory challenges the Company faces (including the U.S,, EU, China, Japan and its other key geographies) due to a number of factors including novelty of the Company’s technology and product offerings, changes in and /or evolution of regulatory approaches to cellular therapeutics like the Company’s in its key geographies, and similar matters. The Company also face risks relating to achievement of the Company’s financial goals (including 2016 operating cash burn and 2016 total revenues), dependence on third party performance and approvals (including performance of investigator-initiated trials, and outcome of FDA review of the Company’s proposed burn wound trial pursuant to its contract with BARDA), performance and acceptance of the Company’s products in clinical studies/trials and in the marketplace (including the Company’s ability to successfully implement and conduct its EU managed access program, commercial acceptance of the Company’s products in Japan and other markets where are products are commercially available, and similar risks), material changes in the marketplace that could adversely impact revenue projections (including changes in market perceptions of the Company’s products, and introduction of competitive products), unexpected costs and expenses that could adversely impact liquidity and shorten the Company’s current liquidity projections (which could in turn require the Company to seek additional debt or equity capital sooner than currently anticipated), the Company’s reliance on key personnel, the Company’s ability to identify and develop new programs or assets to expand the Company’s clinical pipeline, the right of the U.S. government (BARDA) to cut or terminate further support of the thermal burn injury program (including any decision by BARDA not to proceed with a wound trial in 2016, assuming FDA approval of the Company’s IDE submission), the Company’s abilities to capitalize on its internal restructuring and achieve break-even or profitability (or to continue to reduce our operating losses), and other risks and uncertainties described under the "Risk Factors" in Cytori's Securities and Exchange Commission Filings, included in the Company’s annual and quarterly reports.

There may be events in the future that the Company is unable to predict, or over which it has no control, and its business, financial condition, results of operations and prospects may change in the future. The Company assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made unless the Company has an obligation under U.S. Federal securities laws to do so.

 


 

CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

 

 

 

As of September 30,

2016

 

 

As of December 31,

2015

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,924,000

 

 

$

14,338,000

 

Accounts receivable, net of reserves of $173,000 and $797,000 in 2016 and 2015,

   Respectively

 

 

918,000

 

 

 

1,052,000

 

Inventories, net

 

 

3,946,000

 

 

 

4,298,000

 

Other current assets

 

 

1,253,000

 

 

 

1,555,000

 

Total current assets

 

 

21,041,000

 

 

 

21,243,000

 

Property and equipment, net

 

 

1,292,000

 

 

 

1,631,000

 

Restricted cash and cash equivalents

 

 

350,000

 

 

 

350,000

 

Other assets

 

 

1,474,000

 

 

 

1,521,000

 

Intangibles, net

 

 

8,763,000

 

 

 

9,031,000

 

Goodwill

 

 

3,922,000

 

 

 

3,922,000

 

Total assets

 

$

36,842,000

 

 

$

37,698,000

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

5,637,000

 

 

$

6,687,000

 

Current portion of long-term obligations, net of discount

 

 

5,267,000

 

 

 

 

Joint venture purchase obligation

 

 

 

 

 

1,750,000

 

Total current liabilities

 

 

10,904,000

 

 

 

8,437,000

 

Deferred revenues

 

 

97,000

 

 

 

105,000

 

Long-term deferred rent and other

 

 

41,000

 

 

 

269,000

 

Long-term obligations, net of discount, less current portion

 

 

12,130,000

 

 

 

16,681,000

 

Total liabilities

 

 

23,172,000

 

 

 

25,492,000

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Series A 3.6% convertible preferred stock, $0.001 par value; 5,000,000 shares

   authorized; 13,500 shares issued; no shares outstanding in 2016 and 2015

 

 

 

 

 

 

Common stock, $0.001 par value; 75,000,000 shares authorized; 20,495,069 and

   13,003,893 shares issued and outstanding in 2016 and 2015, respectively

 

 

20,000

 

 

 

13,000

 

Additional paid-in capital

 

 

387,119,000

 

 

 

368,214,000

 

Accumulated other comprehensive income

 

 

675,000

 

 

 

996,000

 

Accumulated deficit

 

 

(374,144,000

)

 

 

(357,017,000

)

Total stockholders’ equity

 

 

13,670,000

 

 

 

12,206,000

 

Total liabilities and stockholders’ equity

 

$

36,842,000

 

 

$

37,698,000

 

 

 

 


 


 

CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Product revenues

 

$

731,000

 

 

$

766,000

 

 

$

3,190,000

 

 

$

3,281,000

 

Cost of product revenues

 

 

618,000

 

 

 

502,000

 

 

 

1,770,000

 

 

 

2,395,000

 

Gross profit

 

 

113,000

 

 

 

264,000

 

 

 

1,420,000

 

 

 

886,000

 

Development revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government contracts and other

 

 

1,879,000

 

 

 

1,711,000

 

 

 

5,163,000

 

 

 

5,002,000

 

 

 

 

1,879,000

 

 

 

1,711,000

 

 

 

5,163,000

 

 

 

5,002,000

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,960,000

 

 

 

4,352,000

 

 

 

13,334,000

 

 

 

14,363,000

 

Sales and marketing

 

 

818,000

 

 

 

566,000

 

 

 

2,742,000

 

 

 

2,059,000

 

General and administrative

 

 

2,011,000

 

 

 

2,370,000

 

 

 

6,625,000

 

 

 

7,662,000

 

Change in fair value of warrant liabilities

 

 

 

 

 

(7,310,000

)

 

 

 

 

 

(4,988,000

)

Total operating expenses

 

 

6,789,000

 

 

 

(22,000

)

 

 

22,701,000

 

 

 

19,096,000

 

Operating (loss) income

 

 

(4,797,000

)

 

 

1,997,000

 

 

 

(16,118,000

)

 

 

(13,208,000

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) on asset disposal

 

 

 

 

 

(3,000

)

 

 

2,000

 

 

 

6,000

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

(260,000

)

Interest income

 

 

4,000

 

 

 

3,000

 

 

 

8,000

 

 

 

6,000

 

Interest expense

 

 

(645,000

)

 

 

(669,000

)

 

 

(1,947,000

)

 

 

(2,677,000

)

Other income, net

 

 

54,000

 

 

 

199,000

 

 

 

928,000

 

 

 

152,000

 

Total other expense

 

 

(587,000

)

 

 

(470,000

)

 

 

(1,009,000

)

 

 

(2,773,000

)

Net (loss) income

 

$

(5,384,000

)

 

$

1,527,000

 

 

$

(17,127,000

)

 

$

(15,981,000

)

Beneficial conversion feature for convertible preferred stock

 

 

 

 

 

 

 

 

 

 

 

(661,000

)

Net (loss) income allocable to common stockholders

 

$

(5,384,000

)

 

$

1,527,000

 

 

$

(17,127,000

)

 

$

(16,642,000

)

Net income (loss) per share allocable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.26

)

 

$

0.15

 

 

$

(1.06

)

 

$

(1.87

)

Diluted

 

$

(0.26

)

 

$

0.15

 

 

$

(1.06

)

 

$

(1.87

)

Weighted average shares used in calculating net income (loss) per

   share allocable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,493,840

 

 

 

10,253,231

 

 

 

16,147,042

 

 

 

8,878,276

 

Diluted

 

 

20,493,840

 

 

 

10,531,264

 

 

 

16,147,042

 

 

 

8,878,276

 

Comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(5,384,000

)

 

$

1,527,000

 

 

$

(17,127,000

)

 

$

(15,981,000

)

Other comprehensive (loss) income – foreign currency translation

   adjustments

 

 

58,000

 

 

 

110,000

 

 

 

(321,000

)

 

 

361,000

 

Comprehensive (loss) income

 

$

(5,326,000

)

 

$

1,637,000

 

 

$

(17,448,000

)

 

$

(15,620,000

)

 

 


 


 

CYTORI THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

For the Nine Months Ended

September 30,

 

 

 

2016

 

 

2015

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(17,127,000

)

 

$

(15,981,000

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

794,000

 

 

 

761,000

 

Amortization of deferred financing costs and debt discount

 

 

714,000

 

 

 

714,000

 

Joint Venture acquisition obligation accretion

 

 

24,000

 

 

 

340,000

 

Provision for expired inventory

 

 

26,000

 

 

 

 

Change in fair value of warrants

 

 

 

 

 

(4,988,000

)

Stock-based compensation expense

 

 

925,000

 

 

 

1,617,000

 

Loss on asset disposal

 

 

2,000

 

 

 

5,000

 

Loss on debt extinguishment

 

 

 

 

 

260,000

 

Increases (decreases) in cash caused by changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

91,000

 

 

 

131,000

 

Inventories

 

 

190,000

 

 

 

(10,000

)

Other current assets

 

 

205,000

 

 

 

(258,000

)

Other assets

 

 

32,000

 

 

 

762,000

 

Accounts payable and accrued expenses

 

 

(1,013,000

)

 

 

870,000

 

Deferred revenues

 

 

(8,000

)

 

 

41,000

 

Long-term deferred rent

 

 

(227,000

)

 

 

(210,000

)

Net cash used in operating activities

 

 

(15,372,000

)

 

 

(15,946,000

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(110,000

)

 

 

(544,000

)

Expenditures for intellectual property

 

 

 

 

 

(13,000

)

Net cash used in investing activities

 

 

(110,000

)

 

 

(557,000

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal payments on long-term obligations

 

 

 

 

 

(25,032,000

)

Proceeds from long-term obligations

 

 

 

 

 

17,700,000

 

Debt issuance costs and loan fees

 

 

 

 

 

(1,854,000

)

Joint Venture purchase payments

 

 

(1,774,000

)

 

 

(1,623,000

)

Proceeds from exercise of employee stock options and warrants

 

 

 

 

 

4,986,000

 

Proceeds from sale of common stock, net

 

 

17,702,000

 

 

 

26,749,000

 

Dividends paid on preferred stock

 

 

 

 

 

(75,000

)

Net cash provided by financing activities

 

 

15,928,000

 

 

 

20,851,000

 

Effect of exchange rate changes on cash and cash equivalents

 

 

140,000

 

 

 

 

Net increase in cash and cash equivalents

 

 

586,000

 

 

 

4,348,000

 

Cash and cash equivalents at beginning of period

 

 

14,338,000

 

 

 

14,622,000

 

Cash and cash equivalents at end of period

 

$

14,924,000

 

 

$

18,970,000