After looking at the results from the quarter, it is clearly evident WHY they did this raise. The obvious need for cash. Hopefully you can make it to the end as its a long one.
Looking at the numbers, as of Sept 30th, they had $18 million of working capital left, and that's including the sales stated from the ATM. Now their cash used for operating activities was $5.2 million.
Now during this quarter, they received $1.3 million from the IIA grant (Israeli government grant) I'm no accountant and maybe someone could clarify, but wouldn't their burn rate be $6.5 million a quarter then? If it is the latter, that's 3 quarters of operating cash left. Even using the smaller number, buys a little more time.
Now before you all yell about our three grants news releases in which we saw $26 million in grant money, numbers are in this quarter. I seem to remember seeing one of the following before. But may have just thought it was the collaborative grant. But we get numbers for all three and direct amount of money coming to Pluristem for manufacturing and other costs.
August 2016 CLI Horizon grant of $9 million...originally $3.4 million directly to us.
Sept 2017 femur neck fracture Horizon grant of $8.7 million...$2.8 million directly to us.
Oct 2017 nTrack collaborative grant of $8 million...$600,000 directly to us.
So if you look at the highly praised $26 million in total, we are actually only getting $6.8 million. I'm not knocking these grants in any way, and yes they will indirectly save us money on the costs of these trials. But these are savings on increasing costs associated with the trials themselves. Has no impact on our burn rate.
Everyone knew the third grant was a collaborative grant. Did anyone else realize the first two were as well. I didn't. Don't think others did as well as this $26 million was thrown around before when talking about how long this company can survive. I took a look at the previous two they used the word consortium. A little different term, but didn't give the sense of grant sharing imo.
But to throw out tweets bragging about $28 million in grant money, is pretty deceptive to say the least. Wouldn't call it transparent, that's for sure. But in all fairness, I did go to the year end and saw one of them there with theses numbers.
Now let's include the raise. $13.7 million, bringing us to $31.7 million. Even at an even $5 million a quarter burn, that brings us to just over 6 quarters. Use the $6.5 million burn rate, and that's under 5. Hopefully someone will confirm as a quarter difference is a huge difference. And that's providing no increase. We can add a quarter as well for the grant money, but when that money comes in, would be a factor. And I seem to recall some already booked previously.
So even at the best case, 7 quarters, that brings us to 2q19. Not quite the 4q19, but contingency plan is there for that.
So if you look at it pre raise and ATM, we were within 9 months of running out of cash. 9 months!!!
They didn't give numbers for the ATM from end of quarter to release date, like they did at year end. A little odd to change the way you release things from one quarter to the next, unless there was none sold of course. Now after coming within 9 months of cash, I hope they did actually reap the substantially higher prices they could have gotten via the ATM after Sept 30th. Heck kind of wish Allo and his $80 million projection was right. Still could be theoretically I guess. We will just have to wait another 3 months to find out. Again transparency is lacking severely.
I'm looking forward to the shareholder update, considering all that has transpired. November presentation should come any day now.
Sorry for the lengthy post, Like always, some free DD for all to see, and I hope it was alright. Tried not to be repetitive too much.
