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 10,
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
November 10, 2008, Cytori Therapeutics, Inc. issued a press release announcing
its financial results for the third quarter ended September 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 November 10, 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: November 10, 2008 | By: /s/ Marc H. Hedrick |
| Marc H. Hedrick | |
| President |
3
Exhibit
99.1
November
10, 2008
Cytori
Achieves 2nd
Consecutive Quarter of Celution®
System-Based Revenue Growth
Cytori
Therapeutics (NASDAQ: CYTX), for the period ended September 30, 2008, achieved
its second consecutive quarter of revenue growth since the Celution® System
was introduced in the first quarter of 2008.
Sales of
Celution System-based products increased to $2.3 million, compared to $1.4
million in the second quarter of 2008. Third quarter product revenues were
derived entirely from the European approved Celution 800/CRS sales into the
Asian and European plastic and reconstructive surgery markets and revenues
recognized from the Celution-based StemSource® Cell
Bank business. In addition, Cytori will recognize $0.4 million of revenue in the
fourth quarter of 2008 for Celution System orders that were received and shipped
during the third quarter of 2008. Gross margins for the third quarter of 2008
improved to 72% compared to 52% for the second quarter of 2008. Because Cytori
launched the Celution® System this year, there are no comparable periods in
2007.
During
the third quarter, Cytori reduced operating expenses, as compared to the same
period in 2007 and the second quarter of 2008, through a decrease in research
and development expenses and general and administrative expenses, offset by a
planned increase in sales and marketing expenses. This trend is expected to
continue due in part to cost containment measures enacted in the third quarter
of 2008 and growing revenues.
In the
third quarter, Cytori continued to broaden the Celution System installed base in
Europe and Asia, which increases the potential for ongoing consumable revenue.
In addition, Cytori entered into two StemSource Cell Bank sales agreements, one
in Greece, for which revenue was mostly recognized in the third quarter of 2008,
and another in Singapore, for which revenue recognition is dependent on required
regulatory approval of the cell bank in Singapore. Cytori also further
strengthened its intellectual property position through the receipt of one U.S.
patent, which broadly protects Celution-based methods to create a cell-enhanced
fat graft, and receipt of multiple patent allowances.
Cytori
ended the third quarter with $15.6 million in cash and cash equivalents and
accounts receivable. In addition, Cytori entered into a $15 million credit
facility in October which provided the Company with increased flexibility to
expand commercialization activities. $7.5 million of the facility has been
funded, less fees and expenses, and Cytori will be able to access the remaining
$7.5 million provided they meet certain financial prerequisites established by
the Lenders.
Management
Discussion
Cytori's
management will host a conference call at 10:00 a.m. Eastern Standard 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:
11121933#).
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(R) 800 System is being
introduced in Europe into the reconstructive surgery market while the
Celution(R) 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 include, but are not limited to, 1) our ability to
recognize additional revenue in the fourth quarter from products shipped in the
third quarter, 2) our ability to continue reducing operating expenses and
increasing revenue, 3) our ability to grow consumable revenue as a result of an
increased installed base, 4) our ability to recognize revenue from our cell
banking agreement in Singapore, 4) the future protection of our intellectual
property position and 5) our efforts to expand our commercialization
activities. These forward looking 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, risks related to (a) our ability to secure sufficient
operating capital, (b) the need for further financing, (c) our history of
operating losses, (d) inherent risk and uncertainty in the protection of
intellectual property rights and (e) the regulatory approval environment
governing our products, as well as 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
September
30, 2008
|
As
of
December
31, 2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 13,387,000 | $ | 11,465,000 | ||||
|
Accounts
receivable, net of allowance for doubtful accounts of $62,000 and $1,000
in 2008
and
2007, respectively
|
2,231,000 | 9,000 | ||||||
|
Inventories,
net
|
1,436,000 | — | ||||||
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Other
current assets
|
1,053,000 | 764,000 | ||||||
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Total
current assets
|
18,107,000 | 12,238,000 | ||||||
|
Property
and equipment, net
|
2,820,000 | 3,432,000 | ||||||
|
Investment
in joint venture
|
344,000 | 369,000 | ||||||
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Other
assets
|
563,000 | 468,000 | ||||||
|
Intangibles,
net
|
912,000 | 1,078,000 | ||||||
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Goodwill
|
3,922,000 | 3,922,000 | ||||||
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Total
assets
|
$ | 26,668,000 | $ | 21,507,000 | ||||
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Liabilities
and Stockholders’ Deficit
|
||||||||
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Current
liabilities:
|
||||||||
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Accounts
payable and accrued expenses
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$ | 6,627,000 | $ | 7,349,000 | ||||
|
Current
portion of long-term obligations
|
370,000 | 721,000 | ||||||
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Total
current liabilities
|
6,997,000 | 8,070,000 | ||||||
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Deferred
revenues, related party
|
17,974,000 | 18,748,000 | ||||||
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Deferred
revenues
|
2,446,000 | 2,379,000 | ||||||
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Option
liability
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1,200,000 | 1,000,000 | ||||||
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Long-term
deferred rent
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252,000 | 473,000 | ||||||
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Long-term
obligations, less current portion
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112,000 | 237,000 | ||||||
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Total
liabilities
|
28,981,000 | 30,907,000 | ||||||
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Commitments
and contingencies
|
||||||||
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Stockholders’
deficit:
|
||||||||
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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; 31,128,341 and
25,962,222 shares issued and 29,255,507 and 24,089,388 shares outstanding
in 2008 and 2007, respectively
|
31,000 | 26,000 | ||||||
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Additional
paid-in capital
|
160,086,000 | 129,504,000 | ||||||
|
Accumulated
deficit
|
(155,636,000 | ) | (132,132,000 | ) | ||||
|
Treasury
stock, at cost
|
(6,794,000 | ) | (6,794,000 | ) | ||||
|
Amount
due from exercises of stock options
|
— | (4,000 | ) | |||||
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Total
stockholders’ deficit
|
(2,313,000 | ) | (9,400,000 | ) | ||||
|
Total
liabilities and stockholders’ deficit
|
$ | 26,668,000 | $ | 21,507,000 | ||||
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
|
For
the Three Months
Ended
September 30,
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For
the Nine Months
Ended
September 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
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Product
revenues:
|
||||||||||||||||
|
Related
party
|
$ | — | $ | — | $ | 28,000 | $ | 792,000 | ||||||||
|
Third
party
|
2,319,000 | — | 3,848,000 | — | ||||||||||||
| 2,319,000 | — | 3,876,000 | 792,000 | |||||||||||||
|
Cost
of product revenues
|
648,000 | — | 1,383,000 | 422,000 | ||||||||||||
|
Gross
profit
|
1,671,000 | — | 2,493,000 | 370,000 | ||||||||||||
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Development
revenues:
|
||||||||||||||||
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Development,
related party
|
— | 3,362,000 | 774,000 | 5,158,000 | ||||||||||||
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Development
|
— | — | — | 10,000 | ||||||||||||
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Research
grant and other
|
1,000 | 11,000 | 50,000 | 65,000 | ||||||||||||
| 1,000 | 3,373,000 | 824,000 | 5,233,000 | |||||||||||||
|
Operating
expenses:
|
||||||||||||||||
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Research
and development
|
3,875,000 | 5,193,000 | 13,873,000 | 14,583,000 | ||||||||||||
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Sales
and marketing
|
1,357,000 | 613,000 | 3,431,000 | 1,678,000 | ||||||||||||
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General
and administrative
|
3,049,000 | 3,177,000 | 9,322,000 | 9,777,000 | ||||||||||||
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Change
in fair value of option liabilities
|
200,000 | — | 200,000 | 100,000 | ||||||||||||
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Total
operating expenses
|
8,481,000 | 8,983,000 | 26,826,000 | 26,138,000 | ||||||||||||
|
Operating
loss
|
(6,809,000 | ) | (5,610,000 | ) | (23,509,000 | ) | (20,535,000 | ) | ||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Gain
on sale of assets
|
— | — | — | 1,858,000 | ||||||||||||
|
Interest
income
|
49,000 | 302,000 | 163,000 | 849,000 | ||||||||||||
|
Interest
expense
|
(19,000 | ) | (33,000 | ) | (60,000 | ) | (128,000 | ) | ||||||||
|
Other
income (expense), net
|
(30,000 | ) | 18,000 | (72,000 | ) | (37,000 | ) | |||||||||
|
Equity
gain (loss) from investment in joint venture
|
(8,000 | ) | (5,000 | ) | (26,000 | ) | 1,000 | |||||||||
|
Total
other income (expense)
|
(8,000 | ) | 282,000 | 5,000 | 2,543,000 | |||||||||||
|
Net
loss
|
(6,817,000 | ) | (5,328,000 | ) | (23,504,000 | ) | (17,992,000 | ) | ||||||||
|
Other
comprehensive loss – unrealized holding loss
|
— | — | — | (1,000 | ) | |||||||||||
|
Comprehensive
loss
|
$ | (6,817,000 | ) | $ | (5,328,000 | ) | $ | (23,504,000 | ) | $ | (17,993,000 | ) | ||||
|
Basic
and diluted net loss per common share
|
$ | (0.24 | ) | $ | (0.22 | ) | $ | (0.90 | ) | $ | (0.80 | ) | ||||
|
Basic
and diluted weighted average common shares
|
27,951,369 | 23,903,082 | 26,078,196 | 22,502,133 | ||||||||||||