Scimitar Equity Blog

A FY10 net loss of $9.9M or 0.17 per share

ISCO.OB had FY10 revenues of $1,56M compared to $1.1M for FY09. The increase in product sales is due to strategic marketing efforts on advertising and continued efforts by sales and marketing Costs of sales for FY10 were $725K or 46% of sales, compared to $790K or 70% of sales for FY09. In addition to these costs, ISCO.OB recorded inventory adjustments of approximately $2.3K for 2010 $181.5K versus for FY09. The inventory adjustment related to a physical inventory and revaluation of inventory costs. FY10, R&D expenses were $3.374M, an increase of $1.2M or 56%, compared to FY09’s $2.1M. R&D expenses increased primarily due to increased R&D activities on various therapeutic research projects, as well as product research activities from Lifeline Cell Technology, Lifeline Skincare and additional research staff /consultants, which is the majority of increased expenses. Total development expense for FY10 was $12M with a loss of $10.4M. FY10 marketing expenses were $860K, an increase of $333.5K, or 63%, compared to $526.6K for FY09. FY10 G&A expenses were $7M, an increase of $2.2M, or 46%, compared to $4.8M for FY09.  

ISCO.OB reported an FY10 increase in cash of $5M resulting from $7M used in operating activities and $624K used in investment activities, offset by $12.7M of cash provided by financing activities. The funds generated from financing activities during FY10 were used mainly to support operating losses.  The adjustments to reconcile the net loss to net cash used in operating activities include depreciation and amortization expense of $289K, non-cash compensation expense of $3.2M, change in market value of warrants of $320K, interest on notes receivable of $26K, an increase in accounts receivable of $607K, increase in inventory of $240K, decrease in prepaid assets of $17K, increase in deposits of $17K, an increase in accounts payable of $214K, increase in accrued expenses of $57K, increase of deferred revenue of $760K and decrease of $470K in related party payables. The net loss was based on 68.7M shares versus FY09’s $12.16M or $0.26 per share based on 46.4M shares.

Net cash provided by financing activities of $12.7M for FY010 was primarily attributable to closing a Series E Preferred Stock financing round totaling $2.4M and Series F Preferred Stock financing of $7.5M at a net exercise price of $1.03 per share. The Series E Preferred financing during the year was part of an existing agreement to raise five million dollars by issuing Series E Preferred Stock. ISCO.OB raised equity by offering common stock at a discount raising $2.69M. Cash received from exercises of options and warrants totaled $456K.

• At 12/31/10, cash and cash equivalents totaled $5.8M.