Remember back in July when everyone’s favorite reverse-merger pink sheet Coronacrapper, Cytodyn (CYDY) told investors that they expected to meet with the FDA within weeks? Well, get ready for rejection because the company revealed this morning that the FDA has basically told them to go pound sand.
Of course The NaDDir* is spinning this as a way to save time. Which in some ways it is. The FDA should not be wasting its time talking to these clowns. And speaking of rejections, which readers remember when Cytodyn (CYDY) told investors that they expected to be listed on the NASDAQ within 5 to 6 weeks?
Naturally that timetable wasn’t aggressive enough for The NaDDir*, he needed to rally the faithful. He and his trusty CFO continued:
That’s right, The NaDDir* was winding up the Cytodummies to expect a listing within three weeks. Poor Mike Mulholland tried to temper expectations just a little bit, to three to four weeks. Well here we are, the full six weeks later, and it’s time for a BuyersStrike! prediction. Are you ready? The prediction from the head curmudgeon here at HQ:
Cytodyn (CYDY) will not get “uplisted” to the NASDAQ. Not to the Nasdaq Capital Market, not to the Nasdaq Global Market, and certainly not to the Nasdaq Global Select Market.
Simple math. Here are the listing standards for the Nasdaq Capital Market, the least stringent of the Nasdaq tiers:
A company seeking to list must meet all of the criteria under one of the three standards. Unfortunately for Cytodyn, it fails to meet the requirements for all three standards. Based on the most recent audited financials, filed by the company on August 14, 2020 (available here), it fails the Stockholder’s Equity test. That information is on the Balance Sheet which can be found on page 76 (Don’t know what a Balance Sheet is? Don’t know what Stockholder’s Equity is? Well then, you are PERFECT for Cytodyn, and the bucket shop brokers at Paulson probably have many more shitstocks for you). Here is the relevant section:
Ooops, there is no Stockholder’s Equity, there is a deficit. The Stockholder’s Equity is NEGATIVE. And unfortunately for Cytodyn longs dreaming of a listing on Nasdaq, -2.4mm < the required $4mm or $5mm.
There is no way, under these listing standards, for Cytodyn to get a listing.
But wait, the Cytodummies may say, what IF we somehow met the Shareholder’s Equity requirements?
Even then the company would not qualify. Why?
The company’s shares must meet the applicable bid price requirement for 90 consecutive trading days before applying. If the company really did apply on July 15th or so, they would not qualify. Why not? Easy. The bid price requirement of $4 was violated not even 30 trading days before the company applied.
But but but, cry the Cytodummies, what about the Closing Price Alternative? Great question. Let’s examine it,
Under this alternative test, the company needs to meet the lower closing price bar and the Net Tangible Assets test. What’s that? Here’s a definition.
To simplify: Net Tangible Assets = Total Assets – Intangible Assets – Total Liabilities – Par Value of Pfd Stock
Where to find this information? Remember that pesky Balance Sheet? Let’s take another look:
OK, we have our Total Assets of 50,514,135 and our Intangible Assets of 13,455,872.
Our Total Liabilities of 52,994,613.
And a tiny amount of Par Value of Pfd of $108.
Plugging those numbers into the very difficult NTA formula gives us the following:
50,514,135 – 13,455,872 – 52,994,613 – 108 = -15,936,350
Double Ooops! Cytodyn’s Net Tangible Assets are negative. Last time we checked here at BuyersStrike HQ! -15mm was less than +2mm. Which means the company cannot use the Closing Price Alternative.
Of course, the company had to have known all of this. Management must have known that their just for show application was doomed to failure at the time of the application. And they certainly knew it on each and every one of The NaDDir’s* misleading hype-filled conference calls and paid promotional webcasts since.
THE CONTENT CONTAINED IN THIS BLOG REPRESENTS ONLY THE OPINIONS OF THE AUTHOR. THE AUTHOR MAY HOLD EITHER LONG OR SHORT POSITIONS IN SECURITIES OF VARIOUS COMPANIES DISCUSSED IN THE BLOG. THIS COMMENTARY IN NO WAY CONSTITUTES INVESTMENT ADVICE, AND SHOULD NEVER BE RELIED ON IN MAKING AN INVESTMENT DECISION, EVER. THIS BLOG IS NOT A SOLICITATION OF BUSINESS: ALL INQUIRIES WILL BE IGNORED. THE CONTENT HEREIN IS INTENDED SOLELY FOR THE ENTERTAINMENT OF THE READER, AND THE AUTHOR.