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TOPIC: Oxford debt re-structured

Oxford debt re-structured 01 Jun 2015 07:16 #4590

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This looks ok- heavy warrant reward, but what´s new? :bash:

At least, the cash issues should be off-the-table for some time to come... :KO:

06/01/2015
SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics (NASDAQ:CYTX) entered into a four year, $17.7 million term loan with Oxford Finance LLC. The loan provides for an interest-only payment period of at least 12-months with the potential to be extended up to 18-months. Proceeds were used to prepay Cytori’s existing loan with Oxford Finance LLC and Silicon Valley Bank. The loan was funded in full on May 29, 2015 and matures June 1, 2019.
Select terms of the loan include the following:
- Interest rate of 8.95% (comprised of three-month LIBOR rate with a floor of 1.00% plus 7.95%) compared with 9.75% under the prior loan
- Interest-only payments for 12-months followed by 36 equal monthly principal and interest payments
- The interest-only payment period may be extended by six months through December 2016 should Cytori achieve positive US ACT-OA clinical trial data or close a licensing, partnership or similar transaction on terms acceptable to the lenders by May 31, 2016
- The minimum liquidity covenant was reduced to $5 million from approximately $8 million (derived pursuant to a formula under the prior loan)
- The loan is secured by substantially all of Cytori’s existing and after-acquired assets, excluding Cytori’s intellectual property assets, which are subject to a negative pledge
- Cytori issued warrants to Oxford Finance LLC for the right to purchase an aggregate of 1,416,618 shares of the Company’s common stock, beginning on November 30, 2015, at an exercise price per share of $0.6872 for 10 years
“We worked closely with our lenders and were able to tailor a new loan that meets our specific needs. The restructured loan considerably reduces our near-term financing cash obligations and together with our reduced operating cash burn, the recent equity financing and our renegotiated Olympus liability, significantly strengthens our balance sheet,” said Tiago Girao, VP of Finance and Chief Financial Officer, Cytori Therapeutics, Inc. “We are now laser-focused on the execution of our key clinical objectives with continued emphasis on our U.S. phase II osteoarthritis and our U.S. pivotal phase III scleroderma clinical trials.”

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Oxford debt re-structured 01 Jun 2015 07:51 #4591

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Did you notice this, Fas?:

On May 26, 2015, Paul W. Hawran informed the Board of Directors (the “Board”) of that Company that he has decided to retire from the Board effective upon the appointment of his successor. The Board has commenced a search for Mr. Hawran's successor.


If you add in the termination payment the effective rate of interest is a couple of percentage point higher than than 3 month Libor + 7.95%.

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Oxford debt re-structured 01 Jun 2015 08:20 #4592

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Nice pay down of principal.

More warrants due to zero leverage...as always on all aspects of the company.

If you take out what they spent and the new 5 million reserve needed where does this put our available cash situation ? Right off the top of my head I think we are still good til year end....anyone ?

WST...why are you worried about the termination payment ?

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Oxford debt re-structured 01 Jun 2015 09:12 #4593

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Though terms of the agreement seem tough, I think this gives CYTX a new life and another 4 years to make it or to disappear.

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Oxford debt re-structured 01 Jun 2015 09:23 #4594

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I agree franshei...the debt has been a major albatross around the neck of CYTX .

I like Tiago going after it...a chunk payed down and reasonable terms going forward.

This has been the most expensive loan I have ever seen in the equity world. Wages should be clawed back from Clahoun, Saad and the board. Of course Dean thought they just needed proper incentives ! :evil: :puke: :cry:

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Oxford debt re-structured 01 Jun 2015 10:45 #4595

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Did you notice this, Fas? On May 26, 2015, Paul W. Hawran informed the Board of Directors (the “Board”) of that Company that he has decided to retire from the Board effective upon the appointment of his successor. The Board has commenced a search for Mr. Hawran's successor.


No- that slipped by me without noticing. My partner liked him- he apparently was the only "real" critical voice of the lot. I do not understand why they are looking for a replacement though...the BOD is top-heavy for a peanuts company like Cytori.


Hedge- this is what Cytori said in the 10Q for Q1-2015-

Pursuant to the recently announced securities transaction and related equity issuance, as well as anticipated gross profits and potential outside sources of capital, we believe we have sufficient cash to fund operations through at least the next 18 months, which includes minimum liquidity requirements of the Loan and Security Agreement, which requires us to maintain at least three months of cash on hand.


That is quite conservative- my quick calculation -

13.2 balance 3/31 + 3.2 ATM +5.0 warrants + 25.0 May/August secondary gives 46.4 Mio

Deduct rescheduling of loan - 26.9 less 17.7 = 12.2 Use

Difference 34.2 Mio representing at least 6 quarters at 5 Mio cash lay-out per quarter.. If one assumes more warrants cash and net margin on sales, one should be happily in 2017 before issues crop up.

To me the cash problem is solved. :really:

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Oxford debt re-structured 01 Jun 2015 13:16 #4596

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Not worried about it, Hedge, just pointing it out as it is part of the cost of financing. The plan here is to get good data on the OA Phase Ii trial of the knee to entice a potential partner to buy in, extend the debt further or pay it off, and get this therapy approved as a front line treatment. ADRC Knee treatments are already being performed in the U.S. despite FDA rules that prohibit it. I would have liked to see a 5 year term loan instead of one amortizing in 2016 but this was obviously the best they could do.

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Oxford debt re-structured 02 Jun 2015 00:41 #4597

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This is probably the best they could achieve - with all the warrants around 0.70 and meaningful data still several months away, a reverse split still seems the most likely scenario...with all the bad consequences for us shareholders :puke:

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Oxford debt re-structured 02 Jun 2015 07:36 #4598

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Question: when these loans get restructured (3rd or 4th time now) do the new warrants replace the old warrants like the new terms replace the old terms or does Oxford get to keep the old warrants?

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Oxford debt re-structured 02 Jun 2015 07:56 #4599

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Each new deal is involves new warrants. Old ones still outstanding.

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Oxford debt re-structured 02 Jun 2015 08:41 #4600

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Just more shares Cytori will be buying back, right DOV ? LOLOL !! :grin:

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Oxford debt re-structured 02 Jun 2015 10:13 #4604

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Our money in CYTX: a different "Investment" thought.

CYTX has been a Going Concern (re company filing for 2014) and over the past one year, the company has been reorganized. Now the Olympus and Oxford financial issues are considered settled. I think one can considered CYTX a turnaround candidate. If the turnaround is successful, the reward may be considerable (just like many other near bankrupt companies).

JMHO

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Oxford debt re-structured 02 Jun 2015 10:39 #4605

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the company has been reorganized. Now the Olympus and Oxford financial issues are considered settled. I think one can considered CYTX a turnaround candidat


franshei,

If they can get the share price over a dollar, and pick up some of the warrants they needed to distribute in order to fund themselves, then I think they can regain some stature as a meaningful company. I don't see how they can survive another round of dilution. I am even weary of a reverse split considering the fragility of the investment community's confidence in the company.

Of course any positive news on scleroderma, OA, or funding from BARDA could propel the PPS enough to create a future for the company. I want to believe that Hedrick and Tiago are on the right track. It is just so hard to be positive when you have been disappointed so many times.
The following user(s) said Thank You: mtpinman, d9dozrman

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