Cytogenix (fka CYGX)

[djharker]

My call to CYGX:

I just called and talked to Kurt Berens, product development at CYGX. What follows is my summary. Much of it is exact quotes, I took notes. I condensed the notes a bit below - but key words like "capacity-limited" are HIS, and were discussed at length.

That 60,000 share purchase that just occurred between 3:04:30 and 3:06:38 (EST) was all me, between 0.77 and 0.79, more than doubling my stake in CYGX. In short, if all 14 employees are as sharp, articulate, etc, as Kurt, we are in good shape.

Here is my summary:

CYGX phone call, 11/06/06, Kurt Berens, product development

Q: What is source of funds for new building?
A: capital markets - but this would be a better question for our CFO.

Q: Will you use debt in paying for this new building?
A: No, not necessary. If it ever is, one division of our partner, GE, specializes in that kind of lending, and we would have very good terms.

Q: What is your confidence level of your ability to make all payments to build and occupy this new building?
A: Very high. Our ability to produce more revenue is capacity-limited. We could substantially increase revenues with more capacity. In addition, our current capacity is non-GMP compliant. The new building will be certified as GMP compliant, increasing the appeal of the product to clients.
We looked into buying GMP-compliant space instead of building, but chose to build, for several reasons: the new building would be a financial asset on the books, and existing space had "too high of an entry cost".

Q: is the "50g/day" limit for the whole building, or per suite?
A: Whole building - but given more demand from clients, we could improve our capacity to exceed that amount.

I kept asking about external clients, their demand to buy more synDNA, etc, and at some point he said: "I need to stress, we are building this facility to serve OUR needs, first and foremost. We want to use it to build our OWN products, at very low cost". (products = DNA-based drugs, he later clarified)

quotes:

"our ability to produce revenue is capacity-limited"

"We would never enter into an agreement to build a facility if we were not very confident"

"we have a very good relationship with GE, and want that to continue"

"if our patents for the manufacture of synDNA are granted as written, we will be in a VERY enviable position - will be able to manufacture at a very, very low cost compared to our competition" (patents are in 2nd year, typical patents take 36-48 months).

When I thanked him for his time, he said:
"Thank you for your MONEY. Without it, we wouldn't be here. It's your company. I'm a shareholder too, and I appreciate your financial support." (or something like that)