Cardica, Inc. (NASDAQ:CRDC) Could Stay on NASDAQ Due to a License Agreement
19 Aug 2010

Yesterday, Cardica, Inc. (NASDAQ:CRDC) stock made its first step towards regaining compliance with the NASDAQ listing requirements. In addition, the stock also ranked among the “most advanced” NASDAQ stocks thanks to its remarkable value and volume gains.

At firsts glance, it seems that the event responsible for the stock becoming one of the highlights on yesterday’s market were the quarter results of the company, announced after the market closed on Tuesday. Yesterday, CRDC was 45.18% up already in the pre-market trading, reached a value of $2.53 during the session and closed at $2.12, or 31.33% up. With the 2.3 million trading volume, now CRDC chart looks much better and it seems that a stable uptrend is about to establish.

A 10-Q has not been filed yet, though even it were, it could hardly be the financial results themselves that caused the furor, as they did not show much of improvement. On the contrary, all key parameters are down in the quarter ended this June and the only positive sign appears to be the improved net loss. It declined from $3.5 million, or $0.22 per share, for the fiscal 2009 fourth quarter to $3.1 million, or $0.13 per share, for this year’s fiscal fourth quarter.

There was, however, another event around Cardica, and it was mentioned in the recent accomplishments section of the press release that announced the results. It said that the company has licensed its intellectual property in the field of robotic surgery to Intuitive Surgical. Under the agreement, Intuitive Surgical has paid Cardica $12 million and the company will also receive royalties in the future. Intuitive has also invested in CRDC common stock through the purchase of 1.25 million shares of the company’s equity.

It seems that investors now honestly expect that Cardica’s sales will eventually reverse their downtrend and will start climbing up instead of going down and the company will get profitable in the near future instead of improving the losses. The stock may then also have good chances to stay on the NASDAQ, as it is facing delisting if the company does not manage to maintain a market cap of over $50 million on a minimum of ten consecutive business days.

Yesterday, due to the huge pre-market jump, the market cap of CRDC was $52.3 million.

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