Remember when, in late July, everyone’s favorite reverse-merger pink sheet Coronacrapper, Cytodyn (CYDY) told investors that they expected to be listed on the NASDAQ within 5 to 6 weeks?
Perhaps you recall back in August when this post explained why a Nasdaq listing was a virtual impossibility.
This morning the company issued its latest 10Q, with updated (albeit unaudited) financials, detailing the results of the quarter ending August 2020. No matter the spin that The NaDDir* or CFO Mike Mulholland tries to deliver, the dream of a Nasdaq listing remains a ludicrous fantasy. Just another carrot to dangle in front of the deluded cultists.
And with updated financials from the company, it is time to update our BuyersStrike! prediction. Are you ready? Once again:
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 still fails to meet the requirements for all three standards. Remember that the listing criteria are based on the most recent audited financials, filed by the company in August.
The current financials, filed by the company on October 9, 2020 (available here), are unaudited. But even if we pretend that these figures are audited, Cytodyn still fails the Stockholder’s Equity test. That information is on the Balance Sheet which can be found on page 3 of the recent 10Q (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:
While Cytodyn has finally flipped over from Stockholder’s Deficit to having positive Stockholder’s Equity, unfortunately for Cytodyn longs dreaming of a listing on Nasdaq, 2.8mm < 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? After all The NaDDir keeps promising us he can fix it quickly.”
Even then the company would not qualify. Why?
And it is easy to see that if the company applied for a listing today it fails the minimum bid price requirement of $4. One need only look at the price of the stock the last two weeks, let alone 90 days.
“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 of $2 (which it does) 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 $93,362,000 and our Intangible Assets of 12.959,000.
Our Total Liabilities of 90,594,000.
Plugging those numbers into the complex NTA formula gives us the following:
93,362,000 – 12,959,000 – 90,594,000 = -10,191,000
Ooops! Cytodyn’s Net Tangible Assets are still negative. Last time we checked here at BuyersStrike HQ! -10mm < +2mm. Which means the company cannot use the Closing Price Alternative.
Of course, the company knows all of this (and now you do too). Any spin they dish out about a potential listing is misleading hype designed to keep their shareholder base dreaming.
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.