PLC Systems Inc. (OTC:PLCSF) is on the ropes after ending 2009 in rough shape and is looking to drum up enough cash to stay in business.
PLC’s accountants are worried the company isn’t bringing in enough cash to stay in business, slapping the company with a so-called "going concern" opinion on its audit. That means Caturano & Co. has "substantial doubt about [PLC’s] ability to continue as a going concern for the next 12 months," according to a press release.
Fourth-quarter sales for the Franklin, Mass.-based medical device maker slid 28.1 percent to $901,000, compared with $1.3 million during the same period in 2008. Net losses for the quarter widened 172 percent to $603,000,or $ 2 cents per share, compared with $222,000 (1 cent per share) during Q4 2008.
Sales were down 11.6 percent during 2009, but PLC still managed to reduce net losses by 16.2 percent. The company posted net losses of $1.6 million, or 5 cents per share, on sales of $4.7 million during 2009. That compares with net losses of $1.9 million (6 cents per share) on sales of $5.3 million during the prior year.
PLC ended the year with just $2.6 million in cash (a little more than half of what it had at the end of 2008) and equivalents and liabilities of $2.9 million. The ongoing losses and negative cash flows from operations prompted its accountants Caturano & Co. to slap a "going concern" opinion in its audits of the company’s books. In February, PLC cut its workforce by a third and said it is examining the proverbial "strategic alternatives."
It’s been a rocky road for the company almost since it went public in in the mid-1990s, seeking to bring its transmyocardial laser revascularization technology to market. The company hit a bump with the Food & Drug Administration, which denied its first clearance application and asked it to go back to the laboratory for more clinical trial work. After regrouping and winning clearance, however, there just wasn’t enough cash left over to commercialize the product.
President and CEO Mark Tauscher told MassDevice last year that PLC‘s experience with the TMR device prompted a change in direction toward another device, the RenalGuard fluid management system.
That plan has met with some success, but the company has struggled to maintain its momentum. A series of international distribution deals — including one announced today covering Austria, New Zealand and Croatia — helped boost the top line, but bottom-line progress has been fitful.
In prepared remarks released today, Tauscher said the company is working with Natixis Bleichroeder LLC to find buyers for the RenalGuard technology and cited results from a clinical trial of the device consistent with positive data from a previous study.
