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.
Why not?
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.
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The question I have is the stockholders’ equity based on only public filings (10K/10Q) or can it be on interim data. -$2.5mm + 7.8mm warrants, + 10.8mm warrant/stock options exercised + 9.5mm conversion of debt to equity = $25.7mm stockholders equity. Well that’s great but the 10Q is going to be ugly. Last Q they lost $35mm from operations and this Q they will have at least 2mm of inducement expenses and finance charges. So you’re at a $37mm loss which gets them to -11mm 1Q Stockholders’ equity + any change in fair value of derivatives, which won’t be more than $16mm.
Good question. According to Rule 5505 “For purposes of this paragraph (B), net tangible assets or average revenues must be demonstrated on the Company’s most recently filed audited financial statements filed with, and satisfying the requirements of, the Commission or Other Regulatory Authority, and which are dated less than 15 months prior to the date of listing.”
It is all moot anyway. as under the Equity Standard they would still need to meet the Closing Price or Bid Price Standards. Cytodyn currently fails both, because of the Net Tangible Assets test.
When looking at the 10K and the notes, don’t the items Google Pump & Dump mentions change net tangible assets? -15.9mm + 7.8mm from warrants exchange + 10.8mm from warrants/stock options exercised + 9.5mm debt conversion to equity = 12.2mm. Tangentially, stock dilution is concerning.
Another good question. The adjustments that GoogleP&D notes all happened AFTER the end of the fiscal year. Which means they will appear on next year’s audited financial statements. Barring a miracle, the Nasdaq will not accept un-audited financials and Cytoscam will have to reapply next August.
Still no name? Sign your work sport!
[It’s Chief Curmudgeon. What’s yours, Moron in Des Moines? If you do have any factual arguments relating to Cytodyn and its pathetic attempts to list on Nasdaq, please feel free to present them. – Editor]
Dear B. Striker, (were you the neurotic pilot in Airplane!?? Related?) Question of the Day: What reputable media outlet will this hit piece written by a person too ashamed to include their name on the byline be excluded from? ALL OF THEM! Don’t you practice any standard journalism ethics? It might lead you out of the gutter so you can cash your paychecks with a clear conscience. The seeds you sow create doubt and may delay awareness and approval and people will die, while you rake in blood money. No ethics, no conscience, no humanity makes for the darkest of souls.
[Well that is where my drinking problem started. As for delaying awareness and approval and “SAVING LIVES” no need to fret, loserlimab has not, will not, and never will, save anyone from anything. Absolutely no one will die from not getting loserlimab. We’ll explore exactly why it doesn’t do much (and what it does do is easily done by other already approved drugs). Stay tuned. – Editor]
I’d be the first one shit on CYDY but just because they asked for a conference does not mean it’s pound sand. No meetings are in person due to Covid
[The FDA wouldn’t even get on a phone call with the Klown Krew at Cytodyn. The FDA absolutely told those con artists to go pound sand. Multiple BTD requests denied, multiple Expanded Access requests denied, filing of the BLA denied, and most recently a phone call to talk about the BLA – also DENIED! – Editor]