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Post by rockstarrick on Oct 16, 2016 19:37:29 GMT -5
This whole situation stinks, my gut is telling me bankruptcy is unavoidable at this point. If you can't sell your only product and there is little time or money left oh well you no the story. I guess i'm out my 40,000.00. God I want to cry. BK is always a possibility with any small Company, (especially bio), but the whole situation doesn't stink. Mannkind has an FDA approved drug, drug delivery device, and a whole new concept of drug delivery that seems to be more efficient to administer some drugs. There are people that have been living with Diabetes for decades that are now reporting the freedom to live close to a normal life, some are reporting a1c's never seen before. As for me, I'm very excited to see what happens from here on out. I applaud Matt, Mike and the rest of the team out there digilantly working to make this work. just my 2 cents Go Mannkind. !!
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Post by sportsrancho on Oct 16, 2016 21:38:23 GMT -5
One of my friends on ST had called MNKD and left a message. A women, I think it was Roberta called him back. He said she was so maternal his anger just melted away! She said, hold tight. I've been here 12 years and I'm not going away!
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Cash
Oct 16, 2016 21:45:42 GMT -5
via mobile
Post by itrade on Oct 16, 2016 21:45:42 GMT -5
I spoke with Roberta about 2 years ago and she told me the same thing. To keep holding as things will start to get better. I don't think there's much time left for mnkd. I've lost hope. Still holding but kicking myself everyday for doing so.
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Post by nylefty on Oct 16, 2016 22:04:41 GMT -5
I spoke with Roberta about 2 years ago and she told me the same thing. To keep holding as things will start to get better. I don't think there's much time left for mnkd. I've lost hope. Still holding but kicking myself everyday for doing so. If you've "lost hope," why are you still holding? I'm holding, but haven't lost hope. If I ever do, I'll sell, but don't see that happening.
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Cash
Oct 16, 2016 22:17:59 GMT -5
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Post by itrade on Oct 16, 2016 22:17:59 GMT -5
The knife is too deep to pull.
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Post by mnkdnut on Oct 17, 2016 1:20:27 GMT -5
Either Matt P is close to a decent solution on lengthening the runway, or he's not. In any case, we're just about out of time. Scripts need way more time to come to the rescue than we've got. Too many deep-rooted adoption barriers to overcome, and we're weighed down by the non-inferior label and Sanofi fiasco. My optimistic daydream is that Matt is confidently closing in on a solution, and that's why there's been no mention of drastic cost cutting. After all, if you're desperate to get more time with no other solution, why wouldn't you make some tough cost-cutting decisions to bring that $10 million/month nut down to say, $5-7 million a month - immediately. Keep the company and the fight alive longer. Cut or mothball everything except what's essential to demonstrate progress on Afrezza scripts (in key high-potential geographies only) and keep let's say, one key TS program going that has the best chance of a licensing deal. If he hasn't done that by now, he must be confident of some other plan he's closing in on, right? Sadly, we can only hope at this point. And, hope hasn't served us well so far. Don't let us down, Matt.
Side note: I see from Mike C's twitter feed that he was recently in Seattle visiting doctor's offices. RLS is in Seattle. Coincidence? Something brewing besides coffee?
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ssaq
Newbie
Posts: 13
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Post by ssaq on Oct 17, 2016 7:44:25 GMT -5
Matt, you and said that management, should they decide that ch 11 is the only option needs to file at a point in time where there is enough cash left to take the company through the process. In your opinion, how much cash would MNKD need to complete a ch 11? I cannot access Mannkinds website now but if they are still burning $10 mm / mo and they have enough cash to get the to Q1 '17 (per Matt P), my guess is that today, they have around $30 - $33 mm. Trying to get a handle on how much cash they have to run company and drop dead date they would need to file by. Per your earlier comments, you indicated that if the filing is inevitable, they would likely do so in conjunction with the next PR for the Q. Thanks, That needs to be $30 million in hard cash if they went into Ch 11, you need to exclude the Mann Group loan and the ATM. Why wouldn't they take the full loan from Mann group first? Why go to bk if you have basically free credit still available? This whole situation stinks, my gut is telling me bankruptcy is unavoidable at this point. If you can't sell your only product and there is little time or money left oh well you no the story. I guess i'm out my 40,000.00. God I want to cry.
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Post by derek2 on Oct 17, 2016 8:13:49 GMT -5
That needs to be $30 million in hard cash if they went into Ch 11, you need to exclude the Mann Group loan and the ATM. Why wouldn't they take the full loan from Mann group first? Why go to bk if you have basically free credit still available? This whole situation stinks, my gut is telling me bankruptcy is unavoidable at this point. If you can't sell your only product and there is little time or money left oh well you no the story. I guess i'm out my 40,000.00. God I want to cry. If they end a quarter with less than $25M in cash + Mann Group LOC, the Deerfield loans can be called immediately.
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Cash
Oct 17, 2016 8:49:43 GMT -5
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mannmade likes this
Post by bthomas55ep on Oct 17, 2016 8:49:43 GMT -5
Why wouldn't they take the full loan from Mann group first? Why go to bk if you have basically free credit still available? If they end a quarter with less than $25M in cash + Mann Group LOC, the Deerfield loans can be called immediately. Of course the 3Q is already over. Would that cash position, if less than $25M, have to be disclosed already?
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Post by cgiscgis on Oct 17, 2016 9:13:59 GMT -5
$0.48 where is Matt's epic turn-around!?
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Oct 17, 2016 9:50:25 GMT -5
Post by derek2 on Oct 17, 2016 9:50:25 GMT -5
If they end a quarter with less than $25M in cash + Mann Group LOC, the Deerfield loans can be called immediately. Of course the 3Q is already over. Would that cash position, if less than $25M, have to be disclosed already? I think they're safe for Q3. By my estimation they ended Q3 with $21M - $25M cash plus the LOC. I don't think they have enough to either make it to Q1 2017 nor to on top of that fulfil their obligation to buy $29M worth of insulin, which they'll receive $19M from SNY for after they purchase it and implement the insulin put (regardless it'll cost them net $9M to $10M that they don't have).
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Post by surplusvalue on Oct 17, 2016 11:28:20 GMT -5
Even so the question now is about the survivability of the company itself (not just about afrezza). So even if scripts increase, the cash issue is paramount. I do not understand why management hasn't addressed this at all, why the silence is deafening? Even if MNKD isnt worried and they have something to deal with the cash issue why not tell the market? It's no secret that MNKD is in trouble so why keep any potential solution secret? Fair questions, but I think the silence may be reflective of the fact that the company has few options that it can pursue and any comment would tank the share price. Before you say anything, I agree that it is illogical that the share price should be affected if management just says what everybody already knows, but that is precisely what happens in the real world. If management does plan to use the ATM to any significant extent, the share price matters. There are 16.1 million shares left on the ATM registration statement and at the current price of 50 cents, that nets a maximum of $8 million in proceeds.
I am sure Matt has spoken to a small army of investment bankers, potential partners, creditors, and lawyers looking for any way he can to extend the cash runway but, given the silence, none of those have come to fruition and as the weeks pass any leverage MNKD had is going away. At some point the smart move for any company interested in the technology is to just sit on their hands and wait for a liquidity crisis that forces MNKD to seek court protection. At that point the desirable assets can be had for pennies on the dollar without taking on creditor claims, shareholders, or pending legal issues. That result would be terrible for shareholders of course, but this is business and a prudent buyer can get a better deal with lower risk simply by waiting.
If there is a rabbit in the hat, now is the time to pull it out.
Share price in relation to the ATM with only about 8m is irrelevant as ATM is too little too late and the share price is tanking anyways (by doing nothing). It doesnt even give them another month at burn rate. One of the main points I made (in the full post) is that they have to stop the bleed out. The target for this stock is .15 (cents) and the .46 today is likely to go much lower if they do nothing over the next 3 weeks and wait until the quarterly CC. ( That's assuming they announce something at the CC or right after like last time.) Transparency 2.0 is what we have now and it's much worse than before in regards to the crucial cash issue.
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Post by matt on Oct 17, 2016 14:13:49 GMT -5
Matt, you and said that management, should they decide that ch 11 is the only option needs to file at a point in time where there is enough cash left to take the company through the process. In your opinion, how much cash would MNKD need to complete a ch 11? I cannot access Mannkinds website now but if they are still burning $10 mm / mo and they have enough cash to get the to Q1 '17 (per Matt P), my guess is that today, they have around $30 - $33 mm. Trying to get a handle on how much cash they have to run company and drop dead date they would need to file by. Per your earlier comments, you indicated that if the filing is inevitable, they would likely do so in conjunction with the next PR for the Q. Thanks, I have more than a bit of experience in bankruptcy cases, as a buyer of distressed assets for a former employer, as a consultant and expert witness for a distressed company that filed bankruptcy, and as a consultant and expert witness for a group of shareholders. Each case and the surrounding circumstances are unique but if I had to put a number to it I would guess that MNKD needs $50-60 million to make it through a reorganization. Let me break that down.
First, there is the expense of the attorneys. This will be a complicated case with lots of parties and there will be a lot of legal work. Bankruptcy attorneys are used to dealing with clients that are insolvent and will demand their estimated fees up front I the form of a retainer. While the fees are ultimately something that is approved on motion to the court, it gets paid out of that retainer. If assets are to be sold, there will be an asset liquidation firm appointed to write an offering memorandum for the saleable assets and that firm will be due a sale commission if successful. The company needs to file a detailed plan of reorganization with the court and there is typically a work-out firm that specializes in preparing those plan documents. If there is litigation between the bankruptcy estate and other parties, that creates another layer of legal fees. The Office of the US Trustee charges fees to administer the case. There are other costs of bankruptcy as well that I won't go into, but the debtor pays for most of it. The various retainers and expert fees will easily be in the ballpark of $10 million. Easily.
If the company is to reorganize life must go on during the pendency of the case. Afrezza has to be manufactured, salesmen have to call on physicians, financial reports have to be filed (although not with the SEC), and the office manager has to pay for lighting and air conditioning. We know the company is burning something like $8-10 million a month over and above what Afrezza sales bring in so over the course of a typical bankruptcy (120-180 days) the company will need to fund that operating burn. Additionally, all the accounts payable get frozen the instant the company files in court, which is good because creditors can't bring collection suits while the company is protected by the court, but at the same time a lot of vendors will put the company on cash terms. Prepaid deposits will have to be provided to all the utility companies to keep the lights, Internet, and telephones on. Any fudging that might have been possible by extended credit terms will be gone and MNKD will effectively turns into an all cash business. Quite literally you will have truck drivers demanding a check before they will unload supplies needed to continue operating.
So a monthly cash burn of $8-10 for 4-6 months plus the cost of the experts gets you to my estimated need for cash. On the supply side, the remaining Mann Group loan facility is $30.1 and the remaining ATM is restricted by the number of shares to a value of around $7 million at today's share price, so that is a total of $37 million of financing plus whatever is left on the balance sheet. As of June there was $63.7 million on the balance sheet and if we assume $8 monthly burn (it averaged $7 million in the first half of the year before the marketing effort) the balance sheet will be down to about $32 million by the end of October. If you use the $10 million monthly burn the cash remaining at the end of October is $24 million. For sake of argument lets use the midpoint of $28 million. Add the $28 million in cash remaining to the $37 in financing capacity and it comes to $66 million.
Without access to the books I can't be more precise that this, but it seems likely that at some point in November the cash required to operate the business as it goes through a bankruptcy reorganization will dip below the remaining cash assuming all the available sources of financing are tapped. There are potential surprises, both good and bad, that could change the math (like an RLS payment) but those are impossible to estimate.
Many companies can access debtor-in-possession (DIP) financing to access additional cash in bankruptcy, but DIP lines have to be secured by assets. Since Sanofi has a first priority security interest in the Valencia headquarters, and Deerfield Partners has a first priority security interest in Danbury, obtaining DIP finance is going to be extremely difficult. Getting around those security agreements will be almost impossible so I think the roughly $66 million MNKD can access is also close to 100% of what they can potentially access. More than anything else, I think that explains why the stock is trading where it is trading. Matt is running out of options and the market knows it.
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Oct 17, 2016 14:40:09 GMT -5
Post by BlueCat on Oct 17, 2016 14:40:09 GMT -5
Reminiscent of that 2012 movie when they were trying to fix the brakes, steaming towards the peak of Everest .... even the windshield cracked. C'mon MNKD team. Pull a John Cusack for us last minute here ..... www.flickr.com/photos/randommovieclub/6591905119/ (Sorry. Link seems to work when I paste it in browser, but not linkable. Anyway, see also: Giant ark for North American humanity on doom's day flood with big frozen peak of mountain approaching rapidly, a few feet away ..... )
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Cash
Oct 17, 2016 14:41:49 GMT -5
via mobile
Post by saxcmann on Oct 17, 2016 14:41:49 GMT -5
Matt, you and said that management, should they decide that ch 11 is the only option needs to file at a point in time where there is enough cash left to take the company through the process. In your opinion, how much cash would MNKD need to complete a ch 11? I cannot access Mannkinds website now but if they are still burning $10 mm / mo and they have enough cash to get the to Q1 '17 (per Matt P), my guess is that today, they have around $30 - $33 mm. Trying to get a handle on how much cash they have to run company and drop dead date they would need to file by. Per your earlier comments, you indicated that if the filing is inevitable, they would likely do so in conjunction with the next PR for the Q. Thanks, I have more than a bit of experience in bankruptcy cases, as a buyer of distressed assets for a former employer, as a consultant and expert witness for a distressed company that filed bankruptcy, and as a consultant and expert witness for a group of shareholders. Each case and the surrounding circumstances are unique but if I had to put a number to it I would guess that MNKD needs $50-60 million to make it through a reorganization. Let me break that down.
First, there is the expense of the attorneys. This will be a complicated case with lots of parties and there will be a lot of legal work. Bankruptcy attorneys are used to dealing with clients that are insolvent and will demand their estimated fees up front I the form of a retainer. While the fees are ultimately something that is approved on motion to the court, it gets paid out of that retainer. If assets are to be sold, there will be an asset liquidation firm appointed to write an offering memorandum for the saleable assets and that firm will be due a sale commission if successful. The company needs to file a detailed plan of reorganization with the court and there is typically a work-out firm that specializes in preparing those plan documents. If there is litigation between the bankruptcy estate and other parties, that creates another layer of legal fees. The Office of the US Trustee charges fees to administer the case. There are other costs of bankruptcy as well that I won't go into, but the debtor pays for most of it. The various retainers and expert fees will easily be in the ballpark of $10 million. Easily.
If the company is to reorganize life must go on during the pendency of the case. Afrezza has to be manufactured, salesmen have to call on physicians, financial reports have to be filed (although not with the SEC), and the office manager has to pay for lighting and air conditioning. We know the company is burning something like $8-10 million a month over and above what Afrezza sales bring in so over the course of a typical bankruptcy (120-180 days) the company will need to fund that operating burn. Additionally, all the accounts payable get frozen the instant the company files in court, which is good because creditors can't bring collection suits while the company is protected by the court, but at the same time a lot of vendors will put the company on cash terms. Prepaid deposits will have to be provided to all the utility companies to keep the lights, Internet, and telephones on. Any fudging that might have been possible by extended credit terms will be gone and MNKD will effectively turns into an all cash business. Quite literally you will have truck drivers demanding a check before they will unload supplies needed to continue operating.
So a monthly cash burn of $8-10 for 4-6 months plus the cost of the experts gets you to my estimated need for cash. On the supply side, the remaining Mann Group loan facility is $30.1 and the remaining ATM is restricted by the number of shares to a value of around $7 million at today's share price, so that is a total of $37 million of financing plus whatever is left on the balance sheet. As of June there was $63.7 million on the balance sheet and if we assume $8 monthly burn (it averaged $7 million in the first half of the year before the marketing effort) the balance sheet will be down to about $32 million by the end of October. If you use the $10 million monthly burn the cash remaining at the end of October is $24 million. For sake of argument lets use the midpoint of $28 million. Add the $28 million in cash remaining to the $37 in financing capacity and it comes to $66 million.
Without access to the books I can't be more precise that this, but it seems likely that at some point in November the cash required to operate the business as it goes through a bankruptcy reorganization will dip below the remaining cash assuming all the available sources of financing are tapped. There are potential surprises, both good and bad, that could change the math (like an RLS payment) but those are impossible to estimate.
Many companies can access debtor-in-possession (DIP) financing to access additional cash in bankruptcy, but DIP lines have to be secured by assets. Since Sanofi has a first priority security interest in the Valencia headquarters, and Deerfield Partners has a first priority security interest in Danbury, obtaining DIP finance is going to be extremely difficult. Getting around those security agreements will be almost impossible so I think the roughly $66 million MNKD can access is also close to 100% of what they can potentially access. More than anything else, I think that explains why the stock is trading where it is trading. Matt is running out of options and the market knows it. It's a plausible post for bankruptcy. But Mnkd knew it's cash would dwindle by 2017, 1st quarter, no? Mnkd has a contingency plan I bet, I hope.....right?!
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