Funding to support ADVANCE clinical trial and corporate initiatives
Cytori Therapeutics (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(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)!