"monthly cash burn is about $100K that's $1.2 million per year."
It's already going to be a lot more than that- just from the recent base salary increases and the $800K in bonuses, handed out to two people. Just the bonuses alone will consume cash of $800K/12 = $66K MORE per month needed right there.
So, at a minimum they're now at $166K a month X 12 = essentially $2 MILLION annual. So they're still gonna be running cash deficits (aka needing convertible notes like Asher or Magna to survive going forward).
Further, that current cash use has been skewed hugely to the low side because the R&D expense line has been slashed to almost zero, now only spending about $5K lousy a month on what would be "trials" or R&D for what's supposed to be a "medical RESEARCH and DEVELOPMENT" company.
That R&D line huge spending reduction cut $300K in cash use just in the 6 month period, yr over yr from 2013, which in 2013 they weren't even spending much on R&D and "trials" to begin with- not any amount close to running any FDA quality/level phase II/III trials, that's for certain from reading their SEC filings.
The INSTANT they'd need to spend, spend realistic amounts to run an actual FDA quality and level phase II/III level trial, singular, not event he multiple "trial(s)" being spoken about, that R&D spending entry on the expense line would explode upward, making their cash use/needs shoot through the roof, and they'd be running huge cash deficits, whether or not this $3 million, spread over 24 months, and only a line that can be "tapped" from "time to time" is in place or not.
See latest 10-Q filing, PAGE 5: (for 6 months ended June 30 2013, 2014)
R&D spending period ending 2013 was $336,381
R&D spending period ending 2013 was $25,335
That $300K cut in R&D is what's making cash use in 2014 look artificially LOW so far.
Want to see what R&D spending was like when actual "trials" were taking place? Go look at a 10-K from like 2009:
10-K filing, year ended 2010, PAGE F-4, expenses:
Research and development $1,467,078
Almost $1.5 MILLION a yr was spent on R&D in 2010, now it's tracking to be about $60K total, for 2014. That's why cash use is artificially low so far in 2014, as they're not really "doing anything" as in running actual "trials" or doing any medical "research" per say.
Want to see what REAL R&D cost them when they really ran the MARVEL and REGEN and other trials up to reaching 2010 (from Aug 12, 1999 to the 2010, end of yr 10-K filing), to get them through phase I and II FDA quality trials and they had actual "staff" and employees and so forth? Look at same 2010, 10-K filing:
2010, 10-K filing, PAGE F-4, accumulated R&D expenses since 1999:
Research and development $63,825,651
Yep, they'd spent $63 MILLION dollars on R&D from 1999 to end of 2010 to "try" and get their products through FDA approval, and still had not been able to come close to an actual approval or marketable product. That means they were spending about $6 MILLION A YEAR on "trials" and product development back then, a much more "typical" and "industry normal" number for an FDA product "trial" company. What's gonna get them back to those kind of R&D spending numbers, to complete even a single phase III trial, which is far more expensive than any phase I/II trials they ran in that period from 1999 to 2010? What? How?
But we're now to believe that maybe a $100K a month or whatever, spread over 24 months is gonna get um an FDA approved product, through a phase III and all through FDA review and the mountains of regulatory hurdles one must cross to actually put a product to market, even after FDA approval (thee single most expensive and largest trial a firm can run/conduct, the phase III)? That'd be one heck of a hat-trick if ever pulled off, IMHO. It would be beyond amazing IMO.
AI
