Cytori Provides Business Update and Reports Third Quarter and Nine Month 2012 Results

  Cytori Provides Business Update and Reports Third Quarter and Nine Month
  2012 Results

Business Wire

SAN DIEGO -- November 08, 2012

During the third quarter and first nine months of 2012, Cytori Therapeutics
(NASDAQ: CYTX) advanced its cardiac cell therapy pipeline and achieved
important strategic commercial and regulatory milestones. Additionally, Cytori
reaffirmed its $9 million revenue guidance for the year. The Company
accomplished the following objectives since the end of the second quarter:

Strategic

  *Awarded a U.S. Government contract with the Biomedical Advanced Research
    and Development Authority (“BARDA”), a division of the Department of
    Health and Human Services. The contract is valued at up to $106 million
    and will be used to develop Cytori’s cell therapy for the treatment of
    thermal burns combined with radiation injury. Contract activities are
    currently underway including the initiation of key proof of concept
    studies in addition to accelerating development of the next generation
    Celution® system.

Clinical Pipeline

  *Initiated enrollment in ATHENA, the U.S. clinical trial of Cytori’s cell
    therapy for refractory heart failure; the trial is on track to fully
    enroll by mid-2013.
  *Resumed enrollment in ADVANCE, a European acute myocardial infarction
    trial; primary emphasis of the trial continues to be completion of country
    and site clearances.

Commercial Business

  *Expanded Japanese market access in the third quarter by obtaining a full
    commercial operational license for Cytori Therapeutics K.K. and Class 1
    medical device clearance for the Celution® and Puregraft® based
    technologies. In combination, these resulted in the highest gross
    quarterly product shipments to date.
  *Expanded Celution® CE Mark certification to include indications-for-use in
    wound healing and tissue ischemia.

Operations & Financial Performance

  *Reduced net cash used in operating activities in the first nine months of
    2012 compared to the first nine months of 2011, driven by reductions in
    sales, general and administrative expenses.

“This quarter we made significant progress on both the clinical and commercial
fronts which will help drive our growth in 2013 and beyond,” said Christopher
J. Calhoun, chief executive officer for Cytori Therapeutics. “Throughout the
rest of the year and into 2013, we will look to continue to expand enrollment
in our ongoing clinical trials, achieve additional strategic partnerships and
secure more approvals that drive revenue growth.”

Financial Results

Product revenues were $1.3 million and $4.7 million for the third quarter and
first nine months of 2012, respectively, compared with $2.1 million and $5.9
million for the same periods in 2011. Additionally, based on the receipt of
the Japan commercial operational license and Class 1 device clearance late in
the third quarter of 2012, Cytori shipped an additional $1.7 million of
systems and consumables that we expect to recognize as product revenue in a
subsequent quarter. Cytori reaffirms its $9 million revenue guidance for 2012
based on already achieved shipments and anticipated orders.

Gross profit was $0.6 million and $2.2 million for the third quarter and first
nine months of 2012, compared to $1.2 million and $3.0 million for the same
periods of 2011, respectively.

Research and development expenses increased to $3.6 million and $9.6 million
for the third quarter and first nine months of 2012, compared to $2.8 million
and $8.9 million, the same periods respectively in 2011. This planned increase
is principally associated with the emergence of the ATHENA trial. In contrast,
sales, general and administrative expenses were reduced to $6.2 million and
$18.9 million in the third quarter and first nine months of 2012, a decrease
of 13% compared to both the third quarter of 2011 ($7.2 million) and the first
nine months of 2011 ($21.8 million) respectively.

Net cash used in operating activities for the third quarter of 2012 was $7.9
million compared to $7.9 million for the same period in 2011 and $8.2 million
in the second quarter of 2012. Net loss was $11.2 million, or ($0.19) per
share, and $28.5 million, or ($0.49) per share, for the third quarter and
first nine months of 2012, respectively. This compares to $8.3 million, or
($0.15) per share, and $25.5 million, or ($0.48) per share for the third
quarter and first nine months of 2011, respectively. Net loss for the third
quarter and first nine months of 2012 includes a net non-cash charge of $1.2
million and $1.7 million respectively related to the change in the fair value
of warrant and option liabilities compared to non-cash credit of $1.0 million
and $3.0 million for the same periods, respectively in 2011.

At the end of the third quarter of 2012, Cytori had $17.6 million of cash and
cash equivalents and $3.2 million of accounts receivable and expected revenue
from the additional product shipments in the third quarter.

Management Conference Call Webcast and Shareholder Letter Information

Cytori will host a management conference call at 5:00 p.m. Eastern Time today
to further discuss the company's progress. The webcast will be available live
and by replay two hours after the call and may be accessed under "Webcasts" in
the Investor Relations section (http://ir.cytori.com) of Cytori's website. If
you are unable to access the webcast, you may dial in to the call at
+1.877.402.3914, Conference ID: 42763342. More details on our business are
contained in the 'November 2012 Shareholder Letter' posted on the homepage of
our Investor Relations website.

About Cytori

Cytori Therapeutics is developing cell therapies based on autologous
adipose-derived regenerative cells (ADRCs) to treat cardiovascular disease and
repair soft tissue defects. Our scientific data suggest ADRCs improve blood
flow, moderate the immune response and keep tissue at risk of dying alive. As
a result, we believe these cells can be applied across multiple “ischemic”
conditions. These therapies are made available to the physician and patient at
the point-of-care by Cytori’s proprietary technologies and products, including
the Celution® system product family. www.cytori.com

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding events,
trends and business prospects, which may affect our future operating results
and financial position, such as our expectation of completion of enrollment of
the ATHENA clinical trial by mid-2013, and our revenue guidance of $9 million
for the year. Such statements are subject to risks and uncertainties that
could cause our actual results and financial position to differ materially.
Some of these risks include clinical and regulatory uncertainties, such as
those associated with the ATHENA clinical trial, including risks in the
collection and results of clinical data, final clinical outcomes, dependence
on third party performance, performance and acceptance of our products in the
marketplace, and other risks and uncertainties described under the "Risk
Factors" in Cytori's Securities and Exchange Commission Filings. We assume no
responsibility to update or revise any forward-looking statements to reflect
events, trends or circumstances after the date they are made.

                                                       
CYTORI THERAPEUTICS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
                                                                             
                                  As of September 30,     As of December 31,
                                  2012                    2011
Assets
Current assets:
Cash and cash equivalents         $    17,628,000         $   36,922,000
Accounts receivable, net of
reserves of $455,000 and of            1,463,000              2,260,000
$474,000 in 2012 and 2011,
respectively
Inventories, net                       3,411,000              3,318,000
Other current assets                  1,090,000             837,000
                                                                             
Total current assets                   23,592,000             43,337,000
                                                                             
Property and equipment, net            2,242,000              1,711,000
Restricted cash and cash               350,000                350,000
equivalents
Investment in joint venture            122,000                250,000
Other assets                           1,756,000              1,772,000
Intangibles, net                       26,000                 192,000
Goodwill                              3,922,000             3,922,000
                                                                             
Total assets                      $    32,010,000         $   51,534,000
                                                                             
Liabilities and Stockholders’
Equity (Deficit)
Current liabilities:
Accounts payable and accrued      $    5,588,000          $   5,334,000
expenses
Current portion of long-term          9,767,000             2,487,000
obligations
                                                                             
Total current liabilities              15,355,000             7,821,000
                                                                             
Deferred revenues, related             1,107,000              3,520,000
party
Deferred revenues                      5,147,000              5,244,000
Warrant liability                      1,871,000              627,000
Option liability                       2,400,000              1,910,000
Long-term deferred rent                684,000                504,000
Long-term obligations, net of         15,178,000            21,962,000
discount, less current portion
                                                                             
Total liabilities                      41,742,000             41,588,000
                                                                             
Commitments and contingencies
Stockholders’ equity (deficit):
Preferred stock, $0.001 par
value; 5,000,000 shares
authorized; -0- shares issued          —                      —
and outstanding in 2012 and
2011
Common stock, $0.001 par value;
95,000,000 shares authorized;
58,720,627 and 56,594,683              59,000                 57,000
shares issued and outstanding
in 2012 and 2011, respectively
Additional paid-in capital             261,113,000            252,338,000
Accumulated deficit                   (270,904,000   )      (242,449,000   )
                                                                             
Total stockholders’ equity            (9,732,000     )      9,946,000
(deficit)
                                                                             
Total liabilities and             $    32,010,000         $   51,534,000
stockholders’ equity (deficit)
                                                                             

                                              
CYTORI THERAPEUTICS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
                                                                             
                  For the Three Months           For the Nine Months

                  Ended September 30,            Ended September 30,
                  2012           2011           2012           2011
                                                                             
Product           $ 1,314,000     $              $ 4,741,000     $ 5,908,000
revenues                          2,134,000
                                                                             
Cost of product   703,000         942,000        2,588,000       2,893,000
revenues
                                                                             
Gross profit      611,000         1,192,000      2,153,000       3,015,000
                                                                             
Development
revenues:
Development,      —               —              2,413,000       1,231,000
related party
Research grant    2,000           5,000          21,000          19,000
and other
                  2,000           5,000          2,434,000       1,250,000
Operating
expenses:
Research and      3,555,000       2,830,000      9,615,000       8,948,000
development
Sales and         2,450,000       3,618,000      7,406,000       10,560,000
marketing
General and       3,777,000       3,538,000      11,489,000      11,230,000
administrative
Change in fair
value of          863,000         (1,536,000 )   1,244,000       (3,714,000  )
warrant
liability
Change in fair
value of option   300,000         570,000        490,000         680,000
liability
                                                                             
Total operating   10,945,000      9,020,000      30,244,000      27,704,000
expenses
                                                                             
Operating loss    (10,332,000 )   (7,823,000 )   (25,657,000 )   (23,439,000 )
                                                                             
Other income
(expense):
Interest income   —               3,000          3,000           7,000
Interest          (857,000    )   (489,000   )   (2,582,000  )   (1,923,000  )
expense
Other income      (17,000     )   25,000         (91,000     )   (36,000     )
(expense), net
Equity loss
from investment   (42,000     )   (51,000    )   (128,000    )   (153,000    )
in joint
venture
                                                                             
Total other
income            (916,000    )   (512,000   )   (2,798,000  )   (2,105,000  )
(expense)
                                                                             
Net loss          $           )   $          )   $           )   $           )
                  (11,248,000     (8,335,000     (28,455,000     (25,544,000
                                                                             
Basic and
diluted net       $ (0.19     )   $ (0.15    )   $ (0.49     )   $ (0.48     )
loss per common
share
                                                                             
Basic and
diluted
weighted          58,713,036      53,900,250     58,292,911      52,775,861
average common
shares
                                                                             

                                   
CYTORI THERAPEUTICS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                                             
                                     For the Nine Months Ended September 30,
                                        2012                 2011
Cash flows from operating
activities:
Net loss                             $   (28,455,000   )     $  (25,544,000  )
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization            712,000                621,000
Amortization of deferred financing       706,000                471,000
costs and debt discount
Provision for doubtful accounts          99,000                 274,000
Change in fair value of warrant          1,244,000              (3,714,000   )
liability
Change in fair value of option           490,000                680,000
liability
Share-based compensation expense         2,907,000              2,578,000
Equity loss from investment in           128,000                153,000
joint venture
Increases (decreases) in cash
caused by changes in operating
assets and liabilities:
Accounts receivable                      698,000                (168,000     )
Inventories                              (93,000       )        (775,000     )
Other current assets                     (253,000      )        132,000
Other assets                             16,000                 (764,000     )
Accounts payable and accrued             254,000                (396,000     )
expenses
Deferred revenues, related party         (2,413,000    )        (1,231,000   )
Deferred revenues                        (97,000       )        189,000
Long-term deferred rent                 180,000               70,000
                                                                             
Net cash used in operating              (23,877,000   )       (27,424,000  )
activities
                                                                             
Cash flows from investing
activities:
Purchases of property and               (1,077,000    )       (458,000     )
equipment
                                                                             
Net cash used in investing              (1,077,000    )       (458,000     )
activities
                                                                             
Cash flows from financing
activities:
Principal payments on long-term          (210,000      )        (4,460,000   )
debt
Proceeds from long-term debt             —                      9,444,000
Debt issuance costs and loan fees        —                      (719,000     )
Proceeds from exercise of employee       988,000                2,849,000
stock options and warrants
Proceeds from sale of common stock       4,946,000              9,038,000
Costs from sale of common stock         (64,000       )       (135,000     )
                                                                             
Net cash provided by financing          5,660,000             16,017,000
activities
                                                                             
Net decrease in cash and cash            (19,294,000   )        (11,865,000  )
equivalents
                                                                             
Cash and cash equivalents at            36,922,000            52,668,000
beginning of period
                                                                             
Cash and cash equivalents at end     $   17,628,000          $  40,803,000
of period
                                                                             

Contact:

Cytori Therapeutics
Investors
Tom Baker
+1.858.875.5258
tbaker@cytori.com
or
Media
Megan McCormick
+1.858.875.5279
mmccormick@cytori.com
 
Press spacebar to pause and continue. Press esc to stop.