There have been some posts recently wondering whether Brazil trials could be slowed by lack of cash (#116737 on main board). Others have posted that the cash situation "isn't as tight as some posit" (post # 116745). And, that we have 200 million shares worth $100 million (#116745).
I decided to do the research on the public filings. From the 10Q, which is as of 11/30/21 and includes some subsequent events up to the filing date of 1/10/22:
1. Cash position at 11/30/21 is $8.875 million; there was also an account receivable of $225,000. Let's assume that was received during December or January. So, known cash was $9.1 million. (I learned from the 10Q that $3 million of that $9 million case from private placements on Nov 24 and Nov 30).
2. The only additional cash raise that CYDY has reported since is in the January 25 8-k. They raised an additional $1.3 million in cash from a private placement. That document included activity up to January 19.
3. They need to file an 8-k for each issuance(s) of stock that total about 7 million shares (1% of outstanding shares). The Jan 25 8-k recognized 5.4 million shares issued to Fife (no cash received) and 1.77 million shares in the private placement (bringing in the $1.3 million mentioned above).
4. So, cash recap: $8.9 million at 11/30, then $.2 million from LL sales, then $1.3 million from stock sales: Total available for use from Nov 30 to January 19:
$10.4 million
Looking at the debt and spending on the 10Q:
1. Net loss for 3 months ending 11/30 was $36 million. Loss for the 3 month prior to that was $32 million.
2. CYDY has non-cash expenses, but also spends cash that isn't counted as an expense. so, it is also helpful to look at the actual cash flow statement. For the six months ended 11/30, net cash used in operating activities was $61 million.
3. It seems clear that there has been $10 million in cash going out the door each month up to Nov 30. Now, we know that legal expenses and settlements were unusually high in that period.
4. You can draw you own conclusions about cash spending in December and January. $3 million per month? $5 million? $8 million? $10 million?
5. I don't think it could have been $10 million each month, since they only had $10.4 million available. Hence the lack of payment of the Samsung bill that was due December 31.
6. At Nov 30, they had $1.4 million in legal expenses accrued and .8 million in payroll accrued. I'm certain both of those were paid. Their payroll is about $.8 million per month right now, so that was presumably also paid in Dec and Jan.
7. FWIW, they owed Samsung about $41 million as of Nov 30. And, Amarex about $13 million. Combined this was 83% of their total payables of $64 million.
8. They also owed Fife $47.6 million as of Nov 30. that has since been reduced to $42 million through stock issuances (no cash paid to Fife)
As to the available shares:
1. per the 10Q, there were 176.4 million common shares available for issuance as of Nov 30 (many are reserved for stock options, warrants, convertible notes and preferred stock conversion). (In other words, they immediately started chewing through the recently authorized 200 million shares).
2. They have issued about 7 million since then. So, the balance is now about 170 million shares.
3. If they could realize 45 cents for each of those shares immediately (very generous assumption), then that would be $76 million cash.
4. Total owed to Samsung as of January 31 will be $64 million ($23 more coming due on Jan 31).
Lots of facts up there. Tried not to put too many opinions. Draw you own conclusions.
Footnote: They can also generate cash from stock option exercises or warrant exercises that we might not find out about until the next 10Q. We should hear about options since they are employees and insiders, so that likely hasn't happened (all options are now underwater). Similarly, most warrants are underwater. They have a history of renegotiating warrant strike prices down, so they could be doing that. They had total proceeds from option and warrant exercises of $1.4 million in the six months ending Nov 30. Another $6 million came in from "warrant exchanges", which were essentially stock issuances in those six months. Those types of exchanges would be disclosed in the 8-ks (unlike warrant exercises). So, I conclude they are not happening. Trying to be as detailed and transparent here as possible, but is it fairly complicated.
I decided to do the research on the public filings. From the 10Q, which is as of 11/30/21 and includes some subsequent events up to the filing date of 1/10/22:
1. Cash position at 11/30/21 is $8.875 million; there was also an account receivable of $225,000. Let's assume that was received during December or January. So, known cash was $9.1 million. (I learned from the 10Q that $3 million of that $9 million case from private placements on Nov 24 and Nov 30).
2. The only additional cash raise that CYDY has reported since is in the January 25 8-k. They raised an additional $1.3 million in cash from a private placement. That document included activity up to January 19.
3. They need to file an 8-k for each issuance(s) of stock that total about 7 million shares (1% of outstanding shares). The Jan 25 8-k recognized 5.4 million shares issued to Fife (no cash received) and 1.77 million shares in the private placement (bringing in the $1.3 million mentioned above).
4. So, cash recap: $8.9 million at 11/30, then $.2 million from LL sales, then $1.3 million from stock sales: Total available for use from Nov 30 to January 19:
$10.4 million
Looking at the debt and spending on the 10Q:
1. Net loss for 3 months ending 11/30 was $36 million. Loss for the 3 month prior to that was $32 million.
2. CYDY has non-cash expenses, but also spends cash that isn't counted as an expense. so, it is also helpful to look at the actual cash flow statement. For the six months ended 11/30, net cash used in operating activities was $61 million.
3. It seems clear that there has been $10 million in cash going out the door each month up to Nov 30. Now, we know that legal expenses and settlements were unusually high in that period.
4. You can draw you own conclusions about cash spending in December and January. $3 million per month? $5 million? $8 million? $10 million?
5. I don't think it could have been $10 million each month, since they only had $10.4 million available. Hence the lack of payment of the Samsung bill that was due December 31.
6. At Nov 30, they had $1.4 million in legal expenses accrued and .8 million in payroll accrued. I'm certain both of those were paid. Their payroll is about $.8 million per month right now, so that was presumably also paid in Dec and Jan.
7. FWIW, they owed Samsung about $41 million as of Nov 30. And, Amarex about $13 million. Combined this was 83% of their total payables of $64 million.
8. They also owed Fife $47.6 million as of Nov 30. that has since been reduced to $42 million through stock issuances (no cash paid to Fife)
As to the available shares:
1. per the 10Q, there were 176.4 million common shares available for issuance as of Nov 30 (many are reserved for stock options, warrants, convertible notes and preferred stock conversion). (In other words, they immediately started chewing through the recently authorized 200 million shares).
2. They have issued about 7 million since then. So, the balance is now about 170 million shares.
3. If they could realize 45 cents for each of those shares immediately (very generous assumption), then that would be $76 million cash.
4. Total owed to Samsung as of January 31 will be $64 million ($23 more coming due on Jan 31).
Lots of facts up there. Tried not to put too many opinions. Draw you own conclusions.
Footnote: They can also generate cash from stock option exercises or warrant exercises that we might not find out about until the next 10Q. We should hear about options since they are employees and insiders, so that likely hasn't happened (all options are now underwater). Similarly, most warrants are underwater. They have a history of renegotiating warrant strike prices down, so they could be doing that. They had total proceeds from option and warrant exercises of $1.4 million in the six months ending Nov 30. Another $6 million came in from "warrant exchanges", which were essentially stock issuances in those six months. Those types of exchanges would be disclosed in the 8-ks (unlike warrant exercises). So, I conclude they are not happening. Trying to be as detailed and transparent here as possible, but is it fairly complicated.
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