Broadfin Capital Tired of Wasting Cash
Don't forget - sign up for our free daily newsletter to stay in the activist investing know. Broadfin Capital is tired of Cardica (NASDAQ: CRDC) wasting cash. It owns 9.98% and has been active since 2013. The fund has announced it plans to nominate eight candidates for the board.
The company is a $30 million market cap medical devices company. It's been an underperformer, driven by operating problems. Of note, Cardica’s stock price has declined more than 47% in the last 10 months. Enterprise value has declined 76% to just $8.5 million during that same time period.
In terms of wasting cash - the slow decision making by the Board has resulted in the company burning $13 million in cash over three quarters with few visible signs of progress. The current cash burn is approximately $3.8 million per quarter; almost 20% higher than the goal set by the Company one quarter earlier.
The board has mishandled the CEO resignation, failing to have an effective CEO succession plan and created unnecessary uncertainty and a leadership vacuum by failing to name an interim CEO, despite the presence on the Board of individuals with public company CEO experience
Broadfin says "The time has come to end the childish gamesmanship and focus on the Company’s business and its problems."