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Editor and Publisher ... Henry enters his twelve (12) year at RegMed Investors which aggregates, curates and creates bottom-line content of regenerative medicine and cell therapy news providing a "vetted" selection of relevant and high-impact synthesis. He was VP - Strategic Planning... More
My company:
Scimitar Equity-Regenerative Medicine Investors
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Scimitar Equity Blog
  • Pluristem (PSTI), The Cakes In The Oven But, Is It Cooking – Q4/12 And 6 Months FY12 Results 0 comments
    Feb 6, 2013 10:22 AM

    Net loss of $4.49 M or $0.08

    Net loss of $4.49 M or $0.08 in Q4/12 as compared to net loss of $1.992 M or $0.05 for Q4/11.

    Revenues for Q4/12 were $195 K as compared to revenues $231 K for Q4/11. All such revenues are derived from the United Agreement. PSTI estimated the performance period of the development of approximately 6.5 years. The license fee will be recognized on a straight line basis as revenue over the estimated development period.

    R&D expenses, net of participation of the OCS <Israel government tax incentives> and other grants, for Q4/12 increased by 242% from $1.067 M for Q4/11 to $3.653 M. This increase is attributed R&D activity and the increase in expenses related to the clinical and pre-clinical trials and a decrease in the participation of the OCS and other grants. The increase in R&D expenses resulted from an increase in salaries due to hiring 42 new employees since 12/11, and increases in laboratory materials expenses. The decrease in participation of the OCS and other grants is attributable to the fact that due to a delay in the approval of the OCS grant for 2011, $1.896 M of such annual grant was recognized in Q4/11 compared to $484 K recognized in Q4/12. G&A expenses of $1.42 M for Q4/12 increased by 11% from $1.275 M for Q4/11 due to an increase in expenses related to the public offering that took place in 9/12 and salaries due to hiring 4 new employees during Q4/12, offset by a decrease in stock-based compensation expenses related to employees and consultants. Financial income increased from $126 K for Q4/11 to $394 K for Q4/12 due to exchange rate adjustments and hedging transactions.

    • Cash and cash equivalents as of 12/31/12 amounted to $23.54 M, compared to $6.672 M as of 12/31/11.

    Breaking out the Financings:

    • On 9/19/12, PSTI closed an underwritten public offering of 8 M units at a purchase price of $4.00 per unit with each unit consisting of 1 share of common stock and 1 warrant to purchase 0.35 shares of common stock at a purchase price of $5.00 per share. The warrants sold in the offering will be exercisable starting on 3/19/13 and will expire on 9/19/17. PSTI also granted the underwriters a 30-day option to purchase up to 1.2 M shares of common stock and/or warrants to purchase up to 420 K shares of common stock, which option was fully exercised. The aggregate net proceeds from the offering, including from the exercise in full of the option, were approximately $34 M, before the exercise of any warrants (which has not yet occurred) and after deducting underwriting commissions and discounts and offering expenses.
    • During the six months, 1,027,247 warrants were exercised in consideration for $1.679 M, and 718,213 warrants were exercised on a cashless basis resulting in the net issuance of 446,423 shares of stock.
    • During the six months ended 12/31/12, PSTI received approximately $872 K from the OCS towards R&D expenses. According to the OCS grant terms, PSTI is required to pay royalties at a rate of 3% - 5% on sales of products and services derived from technology developed using this and other OCS grants until 100% of the dollar-linked grants amount plus interest are repaid. In the absence of such sales, no payment is required.
    • During the six months ended 12/31/12, PSTI paid royalties to the OCS in the aggregate amount of $12 K.
    • In 1/13, MTM - Scientific Industries Center Haifa Ltd. ("MTM") - PSTI's landlord, agreed to contribute NIS 2,990,000 (equals approximately $800,000) toward the cost <build-out> of constructing the new facility.

    PSTI believes they have sufficient cash to fund operations for at least the next 12 months.

    6 Month Review - costs and expenditures: (FY ENDS 6/29):

    • Net loss for the six was $8.485 M as compared to net loss of $6.485 M for the six months. Net loss per share for the six months was $0.16, as compared to $0.15 for the six months ended 12/31/11.
    • Revenues for the six months were $390 K as compared to revenues of $385 K for the six months ended 12/31/11. All such revenues are derived from the United Agreement.
    • R&D expenses -net of participation of the Office of Chief Scientist, or OCS, and other grants, for the six months increased by 62% from $3.911 M for the six months ended 12/31/11 to $6.355 M. This increase is attributed to the material increase in in-house R&D activity, the increase in expenses related to the clinical and pre-clinical trials we are conducting and timing of approval of the OCS program. The material increase in R&D expenses resulted from increase in salaries and lab materials expenses due to, among other things, hiring 42 new employees since 12/11. In addition, the R&D expenses for the six months are net of participation of the OCS and other grants for six months in the amount of $1.543 M, compared to participation of the OCS for the six months ended 12/31/11 which are $1.921 M.
    • G&A expenses for the six months increased by 6% from $2.912 M for the six months ended 12/31/11 to $3.101 M mainly due to an increase in stock-based compensation expenses related to investor relations consultants and salaries due to, among other things, hiring 4 new employees since 1211, offset by bonuses to officers and directors granted in 2011 related to the United Agreement.
    • Financial income increased from an expense of $35 K for the six months ended 12/31/11 to income of $589 K for the six months due to exchange rate adjustments and hedging transactions.
    • Operating activities used cash of $6.890 M in the six months, compared to providing cash of $174 K for the six months ended 12/31/11. Cash used in operating activities in the six months primarily consisted of payments of salaries to employees, and payments of fees to consultants, subcontractors and professional services providers including costs of clinical studies, offset by an OCS grant. The cash provided in the six months ended 12/ 31/11 also consisted of receiving the upfront payment related to the United Agreement in the amount of $7 M.
    • Investing activities used cash of $14.895 M in the six months, compared to $36.731 M for the six months ended 12/31/11. The investing activities in the six months consisted primarily of investing $10.646 M in short term deposits and $2.204 M in marketable securities and purchasing equipment and paying for the construction of new facilities in the amount of $3.338 M. The investing activities in the six months ended 12/31/11 consisted primarily of investing in short-term and long-term bank deposits and in marketable securities.

    The Bottom Line: PSTI closed DOWN -$0.11 or -3.36% to $3.16 on 2/4/13 with 148,246 shares compared with the average 3 month volume of 385,753 shares. the market cap logs in at $184.33 M with an enterprise value of 4126.18 M. the short position has increased incrementally <small> from 1.21 M shares to 1.22 M shares of the 52.79 M float. I am always watching … the machinations of PSTI… and I call a HOLD until the next hyperbole driven release!!

    Even I … must give them credit for maintaining the stock price … but, I am still awaiting their clinical trial strategy for all their pre-clinical and evolving R&D focus into a … licensing company?

    Very interesting and intriguing: In 12/12, PSTI entered into an At Market Issuance Sales Agreement or ATM, with MLV & Co, which provides that, upon the terms and subject to the conditions and limitations set forth <in the sales (of stock) agreement>, PSTI may elect to issue and sell shares of common stock having an aggregate offering price of up to $95 M from time to time through and to … MLV as their sales agent.

    • PSTI is not obligated to make any sales of common stock under the Sales Agreement <other than the service fee>. To date, PSTI have not sold any common stock pursuant to the Sales Agreement.

    For the six months of 2012 and 2011, PSTI had weighted average shares of common stock outstanding of 52,659,430 and 43,225,017, respectively, which were used in the computations of net loss per share for the 6 month period. The increase in weighted average common shares outstanding reflects mainly shares issued in an underwritten public offering in 9/12, as well as shares issued as a result of exercise of warrants and options and issuance of restricted stock units to employees and consultants.

    As of Q4/12:

    • Total current assets were $66.272 M,
    • Total current liabilities were $6.126 M,
    • On 12/31/12, PSTI had a working capital surplus of $60.146 M,
    • Stockholders' equity of $69.044 M and an
    • Accumulated deficit of $74.232 M.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: earnings
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