Cytori Therapeutics Inc (NASDAQ:CYTX) entered into a four year, $17.7 million term loan withOxford 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.” (Original Source)
Shares of Cytori Therapeutics opened today at $0.685 and are currently trading down at $0.68. CYTX has a 1-year high of $2.54 and a 1-year low of $0.36. The stock’s 50-day moving average is $0.84 and its 200-day moving average is $0.74.
On the ratings front, Cytori has been the subject of a number of recent research reports. In a report issued on April 23, Maxim Group analyst Jason Kolbert reiterated a Buy rating on CYTX, with a price target of $7, which represents a potential upside of 921.9% from where the stock is currently trading. Separately, on April 6, Roth Capital’s Joseph Pantginis maintained a Buy rating on the stock and has a price target of $6.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Kolbert and Joseph Pantginis have a total average return of 3.2% and 9.0% respectively. Kolbert has a success rate of 43.5% and is ranked #1074 out of 3610 analysts, while Pantginis has a success rate of 50.8% and is ranked #251.
Cytori Therapeutics Inc is engaged in the development of novel treatments for cardiovascular disease and soft tissue injuries and burns.