Logo     Print Page  Close Window


SEC Filings


10-Q
FIBROCELL SCIENCE, INC. filed this Form 10-Q on 08/09/2018
Entire Document
 

Financial Condition, Liquidity and Capital Resources

Financial Condition
    
We have experienced losses since our inception. As of June 30, 2018, we had an accumulated deficit of $184.6 million. The process of developing and commercializing our product candidates requires significant research and development efforts and clinical trial work, as well as significant manufacturing and process development. These activities, together with our selling, general and administrative expenses, are expected to continue to result in significant operating losses for the foreseeable future.

Our financial condition is summarized below as of the following dates and is intended to supplement the more detailed discussion that follows:
 
June 30, 2018
 
December 31, 2017
($ in thousands)
 
Cash and cash equivalents
$
15,410

 
$
17,417

 
 
 
 
Working capital:
 
 
 
Total current assets
$
15,865

 
$
17,902

Less: Total current liabilities
2,048

 
4,425

Net working capital
$
13,817

 
$
13,477

 
 
 
 
Convertible notes payable (gross principal)
$
18,003

 
$
18,003

 
 
 
 
Stockholders’ equity
$
9,368

 
$
9,007


Liquidity and Capital Resources
    
Our principal sources of liquidity are cash and cash equivalents of $15.4 million and net working capital of $13.8 million as of June 30, 2018. Net working capital increased approximately $0.3 million, or 2.5%, from December 31, 2017 to June 30, 2018. This increase is the result primarily from the money raised in the May 2018 Registered Direct Offering and May 2018 Private Placement (each as defined below), less the net loss incurred for the first six months of 2018. We believe that our existing cash and cash equivalents will be sufficient to fund our operations into the fourth quarter of 2019, based upon current spending rates and with the inclusion of approximately $3.5 million raised in the July 2018 Registered Direct Offering and the July 2018 Private Placement; however, changing circumstances may cause us to consume capital faster than we currently anticipate, and we may need to spend more money than currently expected because of such circumstances. We will require additional capital to fund operations beyond that point and prior to our business achieving significant net cash from operations. Our future capital requirements may be substantial, and will depend on many factors, including, but not limited to:
the results of our Board’s analysis of strategic alternatives, including a potential sale of our company;
the cost of clinical activities and outcomes related to our Phase 1/2 clinical trial for FCX-007;
the costs of clinical activities related to FCX-013, for which we received FDA allowance for our IND in the first quarter of 2018;
the cost of additional pre-clinical studies and clinical trials in order to obtain regulatory approvals for our product candidates;
the cost of regulatory submissions, as well as the preparation, initiation and execution of clinical trials in potential new clinical indications; and
the cost of filing, surveillance around, prosecuting, defending and enforcing patent claims.

To meet our capital needs, we will consider multiple alternatives, including but not limited to equity financings, debt financings, corporate collaborations, partnerships and other strategic transactions and funding opportunities. However, there is no assurance that we will be able to complete any such transaction or obtain the additional required capital on acceptable terms or otherwise. Furthermore, the covenants under our convertible notes limit our ability to obtain additional debt financing. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, will result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt

33