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): August 8,
2008
CYTORI THERAPEUTICS,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-32501
|
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):
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
2.02 Results
of Operations and Financial Condition
On August
8, 2008, Cytori Therapeutics, Inc. issued a press release announcing its
financial results for the second quarter ended June 30, 2008. 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
9.01 Financial
Statements and Exhibits
(d) Exhibits
Exhibit
No. Description
99.1 Cytori Therapeutics, Inc. Press
Release, dated August 8, 2008*
* 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.
2
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: August 8, 2008 | By: /s/ Mark E. Saad |
| Mark E. Saad | |
| Chief Financial Officer |
3
Exhibit 99.1
Cytori
Reports Second Quarter Financial Results;
Strong
Growth in Product Orders and Celution®
Revenue
San Diego, CA, August 8, 2008
- -- Cytori Therapeutics (NASDAQ:CYTX) reports financial results for the quarter
ended June 30, 2008.
During
the second quarter, there was continued demand for Cytori’s Celution® System
in Europe and Asia among plastic and reconstructive surgeons. System sales in
the first half of 2008 accomplished the Company’s initial goal of installing
devices at key surgical centers and with luminary surgeons. Cytori anticipates
significant revenue growth for the remainder of 2008, resulting from
StemSource® Cell
Bank orders and Celution System and related consumable sales into the European
and Asia Pacific cosmetic and reconstructive surgery market. We received our
first two purchase commitments for StemSource® Cell
Banks during the third quarter. Based on current visibility, Cytori reaffirms
its $10 to $12 million revenue guidance for 2008.
Product
revenue increased to $1.4 million in the second quarter of 2008 from $153,000 in
the first quarter of 2008. Because this is the first year Cytori is recognizing
Celution System-based product revenues, the second quarter of 2007 is not a
comparable period. Cytori’s second quarter product revenue related entirely to
Cytori’s cosmetic and reconstructive surgery (CRS) business, which includes the
Celution System, related single procedure consumables, surgical instruments, and
a proprietary enzyme solution. Cytori also received orders late in the second
quarter for an additional $880,000 in CRS related products, which will be
shipped and likely recognized in the third quarter. Subsequent to the end of the
second quarter, Cytori entered purchase commitments for two StemSource Cell
Banks for an aggregate purchase price in excess of $2.5 million. The Company
expects these banks to be installed in the second half of 2008.
Total
operating expenses for the quarter ended June 30, 2008 were $9.1 million
compared to $8.2 million in the same period in 2007. The increase in operating
expenses was due in part to increased sales and marketing to support
commercialization activity offset by a decline in general and administrative
expenses. Cytori ended the second quarter of 2008 with cash and cash equivalents
and accounts receivable of $6.4 million. The
Company will receive an additional $17 million in gross proceeds from the sale
of 2.83 million unregistered shares to Olympus Corporation and select
institutional investors from agreements entered into on August 7 and 8,
2008.
Year-to-Date
Highlights
Cytori
achieved progress across multiple areas of its business during and subsequent to
the end of the second quarter, which will support its near-term
commercialization activities and product development pipeline.
CRS
Business: Cytori initiated its Celution® System
post-marketing study in Europe, RESTORE II, for breast reconstruction following
partial mastectomy during the second quarter. The RESTORE II study will enroll
up to 70 patients and is intended to support reimbursement and to provide
additional clinical data. Patient enrollment has started, and several patients
have already been enrolled at clinical trial centers. In addition, the Company
was informed that enrollment in an independent investigator-initiated Celution
System study in Japan for breast augmentation was completed. Early results from
the first three patients show that an increase in breast volume was maintained
at three months. Cytori was also invited by Nagasaki University to participate
in a research consortium investigating cell-enhanced reconstruction in HIV
therapy-induced facial wasting, a potentially new and promising application for
the Celution System.
StemSource®: Cytori entered into its
first two purchase commitments during the third quarter for StemSource Cell
Banks. Our first sale was to a leading tissue and cell banking company in
Europe, BioHellenika. Our second purchase commitment is in the form of a binding
letter of intent with a medical group in Singapore. Cytori has also recently
expanded its commercialization partnership with Green Hospital Supply, who will
market the cell banking product in Korea, Taiwan and Thailand, in addition to
Japan.
Intellectual
property: Cytori was issued a key
patent in June 2008, which Cytori
believes provides
market protection for commercialization of the Celution System in the United
States. The newly issued patent specifically protects Cytori's device technology
that processes adipose tissue to obtain a diverse and mixed population of cells.
The Company’s intellectual property position was bolstered by its receipt of a
Notice of Allowance in July 2008 from the U.S. Patent & Trademark Office for
a patent application that covers methods of creating a cell-enhanced graft using
a closed system to process adipose-derived stem and regenerative cells. This
patent is expected to specifically protect Cytori's Celution System-based
devices and methods essential in novel cosmetic and reconstructive surgery
procedures.
Product
Pipeline: Cytori continued to enroll patients in the Company’s chronic
heart disease and heart attack clinical trials in Europe. To accelerate
enrollment, the Company is working to open additional trial centers. In
addition, Cytori formed a collaboration with the Fraunhofer Institute for Cell
Therapy and Immunology to develop adipose-derived stem and regenerative
cell-based treatments for ischemic stroke. The Fraunhofer Society is expected to
commit $425,000 over two years in support of Cytori's already planned research
and development. The goal of the collaboration is to advance adipose-derived
stem and regenerative cells into clinical trials for ischemic
stroke.
Management
Discussion
Cytori's
management will host a conference call at 10:00 a.m. Eastern Daylight Time today
to discuss these results. The audio webcast of the conference call may be
accessed under "Events & Webcasts" in the Investor Relations section of the
Company's website at www.cytoritx.com. The
webcast will be available live and by replay two hours after the call on the
company's website and archived for 90 days. A telephone replay will be available
for one week. To access the replay, please call +1 (303) 590-3000 (PIN:
11116771#).
About
Cytori
Cytori’s
(NASDAQ: CYTX) goal is to be the global leader in regenerative medicine. The
company is dedicated to providing patients with new options for reconstructive
surgery, developing treatments for cardiovascular disease, and banking patients'
adult stem and regenerative cells. The Celution® 800
System is being introduced in Europe and Asia Pacific into the reconstructive
surgery market while the Celution® 900
System is being commercialized globally for cryopreserving a patient's own stem
and regenerative cells. Clinical trials are ongoing in cardiovascular disease
and planned for spinal disc degeneration, gastrointestinal disorders, and other
unmet medical needs. www.cytoritx.com
Cautionary
Statement Regarding Forward-Looking Statements
This
press release includes forward-looking statements regarding events, trends and
business prospects, which may affect our future operating results and financial
position. Such statements are subject to risks and uncertainties that could
cause our actual results and financial position to differ materially. Some of
these risks and uncertainties include, but are not limited to, statements
regarding (a) securing sufficient operating capital, (b) the need for further
financing, (c) our history of operating losses, (d) our anticipated revenue
growth from StemSource Cell Bank orders, (e) our revenue guidance for 2008, (f)
protection of our intellectual property rights, (g) our collaboration with the
Fraunhofer Society and the related clinical trials, and other risks and
uncertainties described under the "Risk Factors" in Cytori’s Securities and
Exchange Commission Filings. We assume no responsibility to update or revise any
forward-looking statements to reflect events, trends or circumstances after the
date they are made.
###
Consolidated Condensed Balance Sheets
(Unaudited)
|
As
of
June
30, 2008
|
As
of
December
31, 2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 5,328,000 | $ | 11,465,000 | ||||
|
Accounts
receivable, net of allowance for doubtful accounts of $62,000 and $1,000
in 2008 and
2007, respectively
|
1,073,000 | 9,000 | ||||||
|
Inventories,
net
|
932,000 | — | ||||||
|
Other
current assets
|
741,000 | 764,000 | ||||||
|
Total
current assets
|
8,074,000 | 12,238,000 | ||||||
|
Property
and equipment, net
|
3,062,000 | 3,432,000 | ||||||
|
Investment
in joint venture
|
352,000 | 369,000 | ||||||
|
Other
assets
|
553,000 | 468,000 | ||||||
|
Intangibles,
net
|
967,000 | 1,078,000 | ||||||
|
Goodwill
|
3,922,000 | 3,922,000 | ||||||
|
Total
assets
|
$ | 16,930,000 | $ | 21,507,000 | ||||
|
Liabilities
and Stockholders’ Deficit
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 6,837,000 | $ | 7,349,000 | ||||
|
Current
portion of long-term obligations
|
483,000 | 721,000 | ||||||
|
Total
current liabilities
|
7,320,000 | 8,070,000 | ||||||
|
Deferred
revenues, related party
|
17,974,000 | 18,748,000 | ||||||
|
Deferred
revenues
|
2,379,000 | 2,379,000 | ||||||
|
Option
liability
|
1,000,000 | 1,000,000 | ||||||
|
Long-term
deferred rent
|
326,000 | 473,000 | ||||||
|
Long-term
obligations, less current portion
|
129,000 | 237,000 | ||||||
|
Total
liabilities
|
29,128,000 | 30,907,000 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders’
deficit:
|
||||||||
|
Preferred
stock, $0.001 par value; 5,000,000 shares authorized; -0- shares issued
and outstanding in 2008 and 2007
|
— | — | ||||||
|
Common
stock, $0.001 par value; 95,000,000 shares authorized; 28,258,683 and
25,962,222 shares issued and 26,385,849 and 24,089,388 shares outstanding
in 2008 and 2007, respectively
|
28,000 | 26,000 | ||||||
|
Additional
paid-in capital
|
143,386,000 | 129,504,000 | ||||||
|
Accumulated
deficit
|
(148,818,000 | ) | (132,132,000 | ) | ||||
|
Treasury
stock, at cost
|
(6,794,000 | ) | (6,794,000 | ) | ||||
|
Amount
due from exercises of stock
options
|
— | (4,000 | ) | |||||
|
Total
stockholders’ deficit
|
(12,198,000 | ) | (9,400,000 | ) | ||||
|
Total
liabilities and stockholders’ deficit
|
$ | 16,930,000 | $ | 21,507,000 | ||||
Consolidated Condensed Statements of Operations
(Unaudited)
|
For
the Three Months
Ended
June 30,
|
For
the Six Months
Ended
June 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Product
revenues:
|
||||||||||||||||
|
Related
party
|
$ | 28,000 | $ | 512,000 | $ | 28,000 | $ | 792,000 | ||||||||
|
Third
party
|
1,376,000 | — | 1,529,000 | — | ||||||||||||
| 1,404,000 | 512,000 | 1,557,000 | 792,000 | |||||||||||||
|
Cost
of product revenues
|
675,000 | 197,000 | 735,000 | 422,000 | ||||||||||||
|
Gross
profit
|
729,000 | 315,000 | 822,000 | 370,000 | ||||||||||||
|
Development
revenues:
|
||||||||||||||||
|
Development,
related party
|
— | 1,796,000 | 774,000 | 1,796,000 | ||||||||||||
|
Development
|
— | 10,000 | — | 10,000 | ||||||||||||
|
Research
grant and other
|
12,000 | 8,000 | 49,000 | 53,000 | ||||||||||||
| 12,000 | 1,814,000 | 823,000 | 1,859,000 | |||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Research
and development
|
5,034,000 | 4,393,000 | 9,998,000 | 9,390,000 | ||||||||||||
|
Sales
and marketing
|
1,117,000 | 519,000 | 2,074,000 | 1,065,000 | ||||||||||||
|
General
and administrative
|
3,162,000 | 3,433,000 | 6,272,000 | 6,599,000 | ||||||||||||
|
Change
in fair value of option liabilities
|
(200,000 | ) | (100,000 | ) | — | 100,000 | ||||||||||
|
Total
operating expenses
|
9,113,000 | 8,245,000 | 18,344,000 | 17,154,000 | ||||||||||||
|
Operating
loss
|
(8,372,000 | ) | (6,116,000 | ) | (16,699,000 | ) | (14,925,000 | ) | ||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Gain
on sale of assets
|
— | 1,858,000 | — | 1,858,000 | ||||||||||||
|
Interest
income
|
38,000 | 348,000 | 114,000 | 545,000 | ||||||||||||
|
Interest
expense
|
(18,000 | ) | (43,000 | ) | (41,000 | ) | (95,000 | ) | ||||||||
|
Other
expense, net
|
(53,000 | ) | (52,000 | ) | (43,000 | ) | (54,000 | ) | ||||||||
|
Equity
gain (loss) from investment in joint venture
|
(8,000 | ) | 9,000 | (17,000 | ) | 6,000 | ||||||||||
|
Total
other income (expense)
|
(41,000 | ) | 2,120,000 | 13,000 | 2,260,000 | |||||||||||
|
Net
loss
|
(8,413,000 | ) | (3,996,000 | ) | (16,686,000 | ) | (12,665,000 | ) | ||||||||
|
Other
comprehensive loss – unrealized holding loss
|
— | — | — | (1,000 | ) | |||||||||||
|
Comprehensive
loss
|
$ | (8,413,000 | ) | $ | (3,996,000 | ) | $ | (16,686,000 | ) | $ | (12,666,000 | ) | ||||
|
Basic
and diluted net loss per common share
|
$ | (0.33 | ) | $ | (0.17 | ) | $ | (0.66 | ) | $ | (0.58 | ) | ||||
|
Basic
and diluted weighted average common shares
|
25,819,980 | 23,497,375 | 25,131,317 | 21,790,048 | ||||||||||||