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Funding to support ADVANCE clinical trial and corporate initiatives

Cytori Therapeutics (NASDAQ:CYTX) entered into an equity purchase agreement with Seaside 88, LP (‘Seaside’). As part of the agreement, Seaside completed the purchase of 1,326,262 common shares at $4.52 per share for gross proceeds of $6M and committed to purchase an additional 5M shares of common shares over a 9 month period beginning 8/12.

The purchase price for the initial closing of the transaction was determined by a 12% discount to the trailing 10 day volume weighted average share price of $5.14

  • Each future closing of 250K shares will be determined by a 9.75% discount to the weighted average trailing price at that time and occur biweekly beginning 8/12 until either the total 5M shares are acquired or the agreement is terminated.

The Bottom Line: It was NOT a bad move – ($4.52 a share) with these market dynamics … entering into this structure deal at this market pricing. CYTX in 2009-10 sold 7M shares over a 12 month period to raise $30M; the stock had then gone for $3.50 to over $8.00. CYTX had needed flexibility then and RE-USED this existing Seaside structure … Rather then raise ALL the money at a THIS valuation; they entered into the structure deal – AGAIN. CYTX has reserved the right at any time to terminate the agreement without penalty as circumstances change. CYTX had $43M at the end of Q1/11. So … basically, a CHEAP rate … Expect … a few milestone developments to support this raise! The funding will facilitate the ADVANCE European pivotal trial and the proceeds from the offering will be used to support efforts to initiate a US cardiac clinical trial, achieve a European indication-for-use for the Celution(NYSE:R) System in treating no-option chronic myocardial ischemia patients, obtain Celution(R) System regulatory approvals or clearances in additional countries and POTENTIALLY … achieve a significant strategic partnership. CYTX is trading UP at $0.12 to $5.33 a 2.30% increase – so far (11:13 am EST)!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Cytori Therapeutics Completes Equity Agreement