|
Post by myocat on May 9, 2019 7:35:35 GMT -5
Quote
"We have $9 million of Deerfield debt remaining outstanding, which matures at the beginning of the third quarter.
The security interest granted by MannKind to Deerfield in substantially all of our assets will terminate upon repayment of the debt."
Next question will be how will MNKD pay it debt? $59.8 million in cash (~$11M burn rate/per qtr) - 2019 is fully funded and maybe first half of 2020 $5M demanded sales per qtr (assume) $12.5 million from United Therapeutics in the second half
Cash position by end of 4qtr = ~45.3M <--- debt free (yes/No?)
50M from shelf (translate to ~40M shares dilution if use today PPS)-(In early April, $14 million warrants associated with the April 2018 capital raise expired unused.)
$12.5 million from United Therapeutics in the first half of 2020.
MY2CENT
|
|
|
Post by traderdennis on May 9, 2019 8:01:37 GMT -5
Quote "We have $9 million of Deerfield debt remaining outstanding, which matures at the beginning of the third quarter. The security interest granted by MannKind to Deerfield in substantially all of our assets will terminate upon repayment of the debt." Next question will be how will MNKD pay it debt? $59.8 million in cash (~$11M burn rate/per qtr) - 2019 is fully funded and maybe first half of 2020 $5M demanded sales per qtr (assume) $12.5 million from United Therapeutics in the second half Cash position by end of 4qtr = ~45.3M <--- debt free (yes/No?) 50M from shelf (translate to ~40M shares dilution if use today PPS)-(In early April, $14 million warrants associated with the April 2018 capital raise expired unused.) $12.5 million from United Therapeutics in the first half of 2020. MY2CENT Since when is the burn rate only 11 million per quarter. It is much closet to 25 million per quarter. And your title is misleading. Mnkd still will have substantial debt with the Mann foundation and a substantial insulin contract it is on the hook. So shows a figure close to 100 million dollars in upcoming payments through 2021 or 2022.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on May 9, 2019 8:12:45 GMT -5
Mike said on the last CC they spent $11.6M on Operations and that run rate should be steady.
Once Deerfield debt is paid off July 1st, MNKD will be free to sign a Partner and really get the ball rolling.
|
|
|
Post by myocat on May 9, 2019 8:22:13 GMT -5
"And your title is misleading."
I didn't. There is a big "?" in the title. The figures were from the CC and they did not mention anything about Mann foundation.
|
|
|
Post by mnkdfann on May 9, 2019 8:25:40 GMT -5
"And your title is misleading." I didn't. There is a big "?" in the title. The figures were from the CC and they did not mention anything about Mann foundation. At least you know better now. Debt free is a long ways off.
|
|
|
Post by uvula on May 9, 2019 8:31:55 GMT -5
The mann foundation owns stock which isn't debt. Does mnkd really owe debt to the foundation?
|
|
|
Post by cjm18 on May 9, 2019 8:33:57 GMT -5
The mann foundation owns stock which isn't debt. Does mnkd really owe debt to the foundation? Yes.
|
|
|
Post by ktim on May 9, 2019 8:35:38 GMT -5
Quote "We have $9 million of Deerfield debt remaining outstanding, which matures at the beginning of the third quarter. The security interest granted by MannKind to Deerfield in substantially all of our assets will terminate upon repayment of the debt." Next question will be how will MNKD pay it debt? $59.8 million in cash (~$11M burn rate/per qtr) - 2019 is fully funded and maybe first half of 2020 $5M demanded sales per qtr (assume) $12.5 million from United Therapeutics in the second half Cash position by end of 4qtr = ~45.3M <--- debt free (yes/No?) 50M from shelf (translate to ~40M shares dilution if use today PPS)-(In early April, $14 million warrants associated with the April 2018 capital raise expired unused.) $12.5 million from United Therapeutics in the first half of 2020. MY2CENT Since when is the burn rate only 11 million per quarter. It is much closet to 25 million per quarter. And your title is misleading. Mnkd still will have substantial debt with the Mann foundation and a substantial insulin contract it is on the hook. So shows a figure close to 100 million dollars in upcoming payments through 2021 or 2022. The burn in Q1 was only $11M and change, but that obviously is factoring in the UTHR payment. We only get two of those within 2019, not 4, so myocat seems to be double counting it or more. As for the question of how MNKD will pay the debt. I'd say odds on favorite would be the tried and true dilution method. Would be nice if Mike explained how he sees MNKD being funded through mid 2020, but explanation doesn't seem to be his style. He'll leave it to people on proboards to try to justify what he claims. I'd have more confidence in it if he did the explaining.
|
|
|
Post by ktim on May 9, 2019 8:37:39 GMT -5
The mann foundation owns stock which isn't debt. Does mnkd really owe debt to the foundation? Yes. And a rather large amount compared to current market cap.
|
|
|
Post by mnkdfann on May 9, 2019 8:42:59 GMT -5
Details regarding debt etc. are in 'Section 6. Related-Party Arrangements' and 'Section 7. Borrowings' of the 10-Q. Too complicated (IMO) to summarise the whole thing here. But it looks like some of the Mann Group debt was paid out / converted into stock, but not all of it. But there are also other borrowings to be paid out: seekingalpha.com/filing/4475644
|
|
|
Post by mannmade on May 9, 2019 9:08:55 GMT -5
My understanding is as follows once the DF debt is paid off:
1. DF will be owed $75m in milestone payments the first of which may occur this year when Afrezza hits $50m in cumulative sales 2. The DF liens will be removed from all mnkd assets 3, The Mann Foundation is owed $90m in 2021 which is convertable at $4 per share. I will be happy to see this conveted at $4 per share personally. 4. There is the amph contract which gets bumped up a bit to offset short term discount to purchase requirements for this year.
|
|
|
Post by matt on May 9, 2019 9:43:23 GMT -5
There are a couple of things you are missing. Firstly, the debt as of the end of the quarter was $102 million, and of that roughly $11 was Deerfield and $72 was due The Mann Group. There is another $19 million of so of convertible debt due in 2021. Shareholders like to think of The Mann Group as a benevolent lender that will be as easy to deal with as Al Mann himself, but Al has passed on so the asset is now controlled by trustees who have legal obligations to act in the best interest of the beneficiaries of the various Mann trusts and estate. Those legal obligations tie the trustee's hands in many ways so the amount of flexibility the trustees are willing to provide may be significantly less than Mr. Mann himself would have allowed during his lifetime.
There are other fixed obligations which, strictly speaking, are not debt but which will cause a significant use of cash. Chief among these is the Amphastar supply agreement which is an $84 million obligation or which $4 million is due this year, and $16 million next year.
When counting sources of cash, you can't count $5 million of sales as a source because that ignores the cost of goods sold. For the most recent quarter sales were about $5 million, but production costs were about $4 million so the net is only $1 million. That number is unlikely to change much during the next year. Costs are what the company spends to produce its product, expenses are what the company spends on research, selling, marketing, and general administration. Shareholders tend to included expenses in their mental calculations but leave the cost piece out. Going forward, the expense burn should be less as the advertising campaign is over, but research spending needs to increase if the company wants to have a credible pipeline or to earn progress payments under the UTHR and other contracts. Spending on R&D was only $1.6 million for the quarter and in the world of pharmaceuticals that amount of spending won't get you very far.
Finally, don't confuse a $50 million shelf registration with the ability to actually issue $50 million in stock; they are not the same thing. A shelf registration gives permission from the SEC to list shares for trading on the NASDAQ if new shares are issued, but the SEC has no authority to grant the company permission to issue anything. Corporations are creates of the states and the company charter and relevant Delaware law determine how many shares can be issued. The company is almost out of shares although they did get 14 million freed up when the April warrants expired worthless. So the company can sell those 14 million shares under the ATM agreement, but at today's price (minus fees) that would raise less than $18 million. The authorized share count caps the amount of a potential raise, not the SEC shelf registration. Of course the company can always ask the shareholders to authorize more shares, but that takes a special meeting of shareholders and at least 30 days to comply with the relevant legal formalities.
|
|
|
Post by mnkdfann on May 9, 2019 10:08:47 GMT -5
My understanding is as follows once the DF debt is paid off: 3, The Mann Foundation is owed $90m in 2021 which is convertable at $4 per share. I will be happy to see this conveted at $4 per share personally. It is The Mann Group that has the option to convert. So conversion is not gteed. And certainly not at $4 (Mann can renegotiate, or else refuse to convert). "On March 11, 2018, the Company amended and restated the Mann Group Loan Arrangement to, among other things, (i) reflect the current outstanding principal balance of the existing loan of $71.5 million, after giving effect to the partial cancelation of principal in exchange for shares of the Company’s common stock described below; (ii) extend the maturity date of the loan to July 1, 2021; (iii) for periods beginning after April 1, 2018 require interest to compound quarterly; and (iv) permit the principal and any accrued and unpaid interest under the Mann Group Loan Arrangement to be converted, at the option of The Mann Group, at any time on or prior to close of business on the business day immediately preceding the stated maturity date, into shares of the Company’s common stock. The conversion rate of 250 shares per $1,000 principal amount of the Note, which is equal to $4.00 per share subject to adjustment under certain circumstances as described in the Mann Group Loan Arrangement."
|
|
|
Post by peppy on May 9, 2019 10:44:27 GMT -5
There are a couple of things you are missing. Firstly, the debt as of the end of the quarter was $102 million, and of that roughly $11 was Deerfield and $72 was due The Mann Group. There is another $19 million of so of convertible debt due in 2021. Shareholders like to think of The Mann Group as a benevolent lender that will be as easy to deal with as Al Mann himself, but Al has passed on so the asset is now controlled by trustees who have legal obligations to act in the best interest of the beneficiaries of the various Mann trusts and estate. Those legal obligations tie the trustee's hands in many ways so the amount of flexibility the trustees are willing to provide may be significantly less than Mr. Mann himself would have allowed during his lifetime. There are other fixed obligations which, strictly speaking, are not debt but which will cause a significant use of cash. Chief among these is the Amphastar supply agreement which is an $84 million obligation or which $4 million is due this year, and $16 million next year. When counting sources of cash, you can't count $5 million of sales as a source because that ignores the cost of goods sold. For the most recent quarter sales were about $5 million, but production costs were about $4 million so the net is only $1 million. That number is unlikely to change much during the next year. Costs are what the company spends to produce its product, expenses are what the company spends on research, selling, marketing, and general administration. Shareholders tend to included expenses in their mental calculations but leave the cost piece out. Going forward, the expense burn should be less as the advertising campaign is over, but research spending needs to increase if the company wants to have a credible pipeline or to earn progress payments under the UTHR and other contracts. Spending on R&D was only $1.6 million for the quarter and in the world of pharmaceuticals that amount of spending won't get you very far. Finally, don't confuse a $50 million shelf registration with the ability to actually issue $50 million in stock; they are not the same thing. A shelf registration gives permission from the SEC to list shares for trading on the NASDAQ if new shares are issued, but the SEC has no authority to grant the company permission to issue anything. Corporations are creates of the states and the company charter and relevant Delaware law determine how many shares can be issued. The company is almost out of shares although they did get 14 million freed up when the April warrants expired worthless. So the company can sell those 14 million shares under the ATM agreement, but at today's price (minus fees) that would raise less than $18 million. The authorized share count caps the amount of a potential raise, not the SEC shelf registration. Of course the company can always ask the shareholders to authorize more shares, but that takes a special meeting of shareholders and at least 30 days to comply with the relevant legal formalities. Here is my question. Who has to be paid off for MNKD to have control of their patents? Deerfield and who else?
|
|
|
Post by mannmade on May 9, 2019 10:47:40 GMT -5
My understanding is just DF.
|
|