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Post by celo on Dec 23, 2019 9:56:16 GMT -5
They wrote the warrants originally because they wanted them exercised at 1.60. They still need the money. Now it will be for a lower price. The fallacy that companies write warrants so they won't be exercised is silly. MNKD does not tell it's shareholders exactly why, but they still need the money for the warrants to be exercised to make it to the end of 2020.
Yes, the warrant holder's process of shorting the stock and then getting Mannkind to reissue at a lower price sucks ass, but that is where mannkind is. They have been there a while. If MNKD can move the share price above the warrant price enough to show some momentum and have the warrants exercised it would be great for everyone. Not there, yet.
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Post by apidistra on Dec 23, 2019 9:57:10 GMT -5
Who knows, it might be very smart gamesmanship if the strategy were learned.. But my immediate reaction is that it smacks of finagling. What could possibly be the benefit of taking less? The company has said there's enough cash through 2020. Now one must ask: is this the case? Or is there some other development going on in the background? Usually the simplest answer is the best. Here the simplest answer is that money is needed right away but CVI did not want to exercise all the warrants. My speculation, which definitely needs clearing up.
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Post by cjc04 on Dec 23, 2019 10:06:08 GMT -5
I rarely express frustration with MannKind and Mike Castagna as I know how hard it has been to save the company and sell Afrezza. However, the optics on this isn’t good. Why make the deal to raise a minor amount of funding like $5.9 million for the overall message it sends to the market. Why not let all of the warrants expire now and send the message that you don’t need the money. The stock price bounces and then maybe go back to the well in the next several months after the share price has appreciated. I was counting on the warrants to expire so I am not a happy camper this morning. Couldn’t have said it better!!!! I might’ve only added, WTF
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Post by bioexec25 on Dec 23, 2019 10:13:16 GMT -5
”In other words, the company just imposed a $12.4 value loss on the shareholders to raise $5.9 million in cash, and put a price ceiling on the stock until the new expiration date in June. I leave it to you to opine on whether that was a prudent move or not”.
Matt, this sums it up from my view. Zero chance this was done to benefit shareholders. Mike Castagna and his trusty CFO knew the damage calculus and simply didn’t give a damn about the negative consequences. From their comfy purch it’s just more revenue without needing to earn it. A page from the Mnkd playbook all to familiar and two years running during the season of giving or in their case taking.
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Post by rfogel on Dec 23, 2019 10:16:22 GMT -5
Spencer Osborne on stocktwits seems to suggest they did it to raise the 5 million needed to pay Deerfield its milestone payment on 50 million revenues. Is that a fair assessment?
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Post by centralcoastinvestor on Dec 23, 2019 10:43:45 GMT -5
So I shared my frustration earlier in the this thread. So looking at glass half full, there are warrants that will expire on the 26th. How many will expire? 12 million?
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Post by akemp3000 on Dec 23, 2019 10:50:06 GMT -5
Spencer could be right but they have the money now without doing this. There is a possibility this was done as a strategic concession for forthcoming things to which we are not and cannot be privileged to know at this time. This is not a big deal. Let's see what happens next.
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Post by mnkdfann on Dec 23, 2019 10:50:14 GMT -5
So I shared my frustration earlier in the this thread. So looking at glass half full, there are warrants that will expire on the 26th. How many will expire? 12 million? I thought it was none. Those not exercised are being repriced lower and extended. isn’t that what the OP says?
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Post by mango on Dec 23, 2019 10:50:31 GMT -5
Spencer Osborne on stocktwits seems to suggest they did it to raise the 5 million needed to pay Deerfield its milestone payment on 50 million revenues. Is that a fair assessment? Can you copy/paste what he said so we can all read it?
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Post by celo on Dec 23, 2019 10:59:13 GMT -5
"In addition, the MidCap Credit Facility contains certain covenants, one of which includes a requirement to maintain a minimum of $15.0 million of unrestricted cash and cash equivalents. This amount will increase to $20 million if the Company draws the aforementioned additional funding that may be made available."
Must also maintain enough cash for the covenants
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Post by wyattdog on Dec 23, 2019 11:03:07 GMT -5
spencer osborne said this is essentially tapping the ATM without really tapping it. It takes some of the warrants out, creating a smaller overhang for June. The new overhang is 7.25m shares st $1.60. This provides enough capital to pay $5m due to Deerfield their milestone on $50m aggregate Afrezza net revenue sales. The midcap covenants require sales targets AND a minimum cash on hand. That $5m could be important in q2 of next year. IMO the company will need to seek authorization of additional shares at next ASM to provide flexibility. Warrant holder now has wiggle room to play its game, while company preserves relationship for possible future offering.
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Post by awesomo on Dec 23, 2019 11:15:35 GMT -5
Castagna delivers again to screw over shareholders in the holiday spirit of MannKind!
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Post by rfogel on Dec 23, 2019 11:19:08 GMT -5
Spencer Osborne on stocktwits seems to suggest they did it to raise the 5 million needed to pay Deerfield its milestone payment on 50 million revenues. Is that a fair assessment? Can you copy/paste what he said so we can all read it? stocktwits.com/spencerosborne/message/187849063" this is essentially tapping the ATM without really tapping it. It takes some of the warrants out, creating a smaller overhang for June. The new overhang is 7.25m shares st $1.60. This provides enough capital to pay $5m due to Deerfield their milestone on $50m aggregate Afrezza net revenue sales. The midcap covenants require sales targets AND a minimum cash on hand. That $5m could be important in q2 of next year. IMO the company will need to seek authorization of additional shares at next ASM to provide flexibility. Warrant holder now has wiggle room to play its game, while company preserves relationship for possible future offering."
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Post by rockstarrick on Dec 23, 2019 11:31:57 GMT -5
Spencer Osborne on stocktwits seems to suggest they did it to raise the 5 million needed to pay Deerfield its milestone payment on 50 million revenues. Is that a fair assessment? It better be to pay DF, the timing and price just make it look like they’re trying to kill the 2019 calls again. Shit, no way I would’ve done this before OPEX, I would’ve given DF an IOU. Those calls are as good as gone, right?.
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Post by rockstarrick on Dec 23, 2019 11:34:05 GMT -5
So I shared my frustration earlier in the this thread. So looking at glass half full, there are warrants that will expire on the 26th. How many will expire? 12 million? I thought it was none. Those not exercised are being repriced lower and extended. isn’t that what the OP says? There are 7 million extended 6 months @ $1.60 is what I thought.
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