CellCyte Genetics says finances are "precarious"

CellCyte Genetics, briefly one of the Seattle area's most valuable biotechs by market capitalization, is running short of cash for its ongoing operations, according to regulatory documents filed Monday.

As of Dec. 31, the Bothell stem-cell research company had $2.3 million in cash, and working capital of some $1.9 million. That's enough to cover operations for five months, CellCyte said in a delayed annual report filed with the Securities and Exchange Commission.

The company described its financial situation as "precarious."

It's been a long fall. CellCyte's market value soared to more than $440 million last fall amid an intense promotional campaign, then plummeted in January. Shares closed at 45 cents Monday, down from a high of $10.01 last year.

In Monday's filing, the company said it has raised more than $400,000 from investors since Dec. 31.

Its low share price, which make it difficult to raise capital without diluting ownership, isn't CellCyte's only challenge.

The filing said CellCyte is battling three shareholder lawsuits. But it made no mention of any inquiries by securities regulators.

A document filed by the company's lawyers in a King County Superior Court dispute with a former employee recently made mention of a confidential Securities and Exchange Commission inquiry into CellCyte. Also, German regulators told The Seattle Times they had started a formal investigation of stock-promotion efforts related to the company.

Many companies voluntarily report such inquiries, but the SEC allows companies to decide whether any investigation is of material significance to investors and should be disclosed.

CellCyte reported that since the beginning of the year, a shareholder executed warrants that brought the company some $201,000.

Another shareholder bought $210,000 worth of stock and an additional warrant to purchase shares.

The company's ambitious plans to begin clinical trials on stem-cell-based therapies call for some $7 million in spending this year.

Last year, the company raised some $6 million from stock sales to investors, and had a net 2007 loss of $4.5 million.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com