Cytori Therapeutics Inc (NASDAQ:CYTX) announced that it has entered into definitive agreements with certain holders (the “Consenting Holders”) of approximately 100% of its outstanding Series A-1 and A-2 warrants issued in May and August of 2015 as well as warrants issued in October 2014. The agreements are intended to improve the financial flexibility of the Company, reduce the fully diluted share count, remove potentially dilutive effects of certain warrant provisions that provided for resets in warrant exercise price in potential future transactions, and provide greater freedom for the Company to use its ATM or ”at-the-market offering” program. If all warrant holders elect to engage in these cashless exercises, the Company will issue an aggregate of approximately 36.5 million common shares pursuant to such exercises.
Dr. Marc H. Hedrick, President and Chief Executive Officer of the Company said, “We believe that these warrant exercises are mutually beneficial to both our stockholders and Cytori. In terms of our financials, these exercises simplify our balance sheet and our equity structure. Operationally, we believe these agreements and subsequent warrant exercises will improve our attractiveness to potential commercial partners as we near milestones in our US osteoarthritis and US and European scleroderma programs. On a related note, based on continued success of our expense reduction initiative, we can at this time, update our 2015 operating cash burn guidance for the full year down to $22 million, $3 million less than our initial guidance of $25 million disclosed in the beginning of 2015.”
Maxim Group LLC advised the Company in its negotiations with the holders of the warrants.
Under the terms of the agreements, the Consenting Holders will receive approximately 0.73 common shares for each cashless exercise of a warrant on a blended average basis, with specific conversion factors dependent on the class of warrant held.
As of September 30, 2015, approximately 50.1 million warrants with anti-dilution price protection were outstanding. As a result of these anticipated warrant exercises, the Company expects that, as of the close business on December 31, 2015, there will be approximately 195 million common shares issued and outstanding and no warrants with anti-dilution price protection. (Original Source)
Shares of Cytori Therapeutics are down 6.65% to $0.254 in early morning trading. CYTX has a 1-year high of $1.47 and a 1-year low of $0.23. The stock’s 50-day moving average is $0.34 and its 200-day moving average is $0.43.
On the ratings front, Cytori has been the subject of a number of recent research reports. In a report issued on December 3, Maxim Group analyst Jason Kolbert reiterated a Buy rating on CYTX, with a price target of $5, which represents a potential upside of 1737.6% from where the stock is currently trading. Separately, on November 9, Roth Capital’s Joseph Pantginis maintained a Buy rating on the stock and has a price target of $2.50.
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 -15.5% and -4.2% respectively. Kolbert has a success rate of 29.1% and is ranked #3635 out of 3643 analysts, while Pantginis has a success rate of 38.7% and is ranked #3491.
Cytori Therapeutics Inc is engaged in the development of novel treatments for cardiovascular disease and soft tissue injuries and burns.