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Post by tomtabb on Aug 2, 2018 17:48:11 GMT -5
The 10-Q says that cash now stands at just $26,178,000. At first I thought maybe they had deducted the 20 million they were supposed to have in cash for Deerfield. But upon further study, it's not clear to me whether that is the case. I can't find anything else in the 10-Q to clarify it. So is 26 million actually all they had at the end of the second quarter? Thanks.
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Post by traderdennis on Aug 2, 2018 18:16:15 GMT -5
The 10-Q says that cash now stands at just $26,178,000. At first I thought maybe they had deducted the 20 million they were supposed to have in cash for Deerfield. But upon further study, it's not clear to me whether that is the case. I can't find anything else in the 10-Q to clarify it. So is 26 million actually all they had at the end of the second quarter? Thanks. Cash burn historically is about 8 million per month. At a bare minimum the company would need 15 Million to finish the quarter about 20 accounting for sales making up the difference. October 31st is the deadline. There is zero chance any of the $2.38 warrants will be executed before the end of the quarter. 4 $40 million would be a better number to carry the company thru until 2019 and I believe that would take at least 40 Million shares to close.
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Post by mytakeonit on Aug 2, 2018 18:22:24 GMT -5
zero chance? Interesting statement made on day 2 of the script start up month.
Sorry for interrupting ... please continue.
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Post by tomtabb on Aug 2, 2018 19:07:45 GMT -5
The 10-Q says that cash now stands at just $26,178,000. At first I thought maybe they had deducted the 20 million they were supposed to have in cash for Deerfield. But upon further study, it's not clear to me whether that is the case. I can't find anything else in the 10-Q to clarify it. So is 26 million actually all they had at the end of the second quarter? Thanks. Cash burn historically is about 8 million per month. At a bare minimum the company would need 15 Million to finish the quarter about 20 accounting for sales making up the difference. October 31st is the deadline. There is zero chance any of the $2.38 warrants will be executed before the end of the quarter. 4 $40 million would be a better number to carry the company thru until 2019 and I believe that would take at least 40 Million shares to close. Bearing in mind my limited attention span when reading 10-Qs, it appears they burned about 10 million per month last quarter. If they had 26 million on June 30 and maintained the current expenses, today they would be down to about 16 million and down to 6 million by the first of September. They have have about 4 million due to Amphastar somewhere in September. If Amphastar insists on cash, the company would run out of money entirely by about mid-September. Now they still have the at the market agreement which they didn't use last quarter. But that confuses me a bit as well since it says, "we may offer and sell, from time to time, through Cantor Fitzgerald, shares of our common stock having an aggregate offering price of up to $50.0 million or such other amount as may be permitted by the Sales Agreement." What does it mean by "such other amount as may be permitted"? What other amount is permitted?
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Post by cretin11 on Aug 2, 2018 19:10:36 GMT -5
zero chance? Interesting statement made on day 2 of the script start up month. Sorry for interrupting ... please continue. I agree, zero is too low. It’s gotta be closer to a one percent chance. Maybe 2%? The call premiums are probably the best indicators.
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Post by traderdennis on Aug 2, 2018 23:04:30 GMT -5
zero chance? Interesting statement made on day 2 of the script start up month. Sorry for interrupting ... please continue. I agree, zero is too low. It’s gotta be closer to a one percent chance. Maybe 2%? The call premiums are probably the best indicators. I spoke of zero chance the warrants exercise. I stand my that percentage since if the stock was above 2.38 in October it will be better for the warrant holders to either sell short and cover with exercised warrants in April 2019 or to sell calls pocket the premium and cover with warrants if the calls get exercised. Either way the warrant holders make more money than if they exercised at the start of the warrant period.
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Post by mytakeonit on Aug 2, 2018 23:11:43 GMT -5
Unless scripts do run and share price follows ... like a rocket.
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Post by casualinvestor on Aug 3, 2018 9:52:41 GMT -5
From the release: The net loss for the second quarter of 2018 was $22.7 million, or $0.16 per share
That's a burn of ~$7.5M/month, or I may not exactly understand the meaning of "burn"
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Post by standup on Aug 3, 2018 9:57:25 GMT -5
From the release: The net loss for the second quarter of 2018 was $22.7 million, or $0.16 per share That's a burn of ~$7.5M/month, or I may not exactly understand the meaning of "burn" Net Loss and Cash Flow or lack thereof are not the same thing.
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Post by tomtabb on Aug 3, 2018 10:12:48 GMT -5
From the release: The net loss for the second quarter of 2018 was $22.7 million, or $0.16 per share That's a burn of ~$7.5M/month, or I may not exactly understand the meaning of "burn" Cost of goods sold 5,095 Research and development 2,967 Selling, general and administrative 21,731 Total is 29,073 or about 9,931,000 a month. I didn't include the 5.3 million dollar gain on currency translation which doesn't count towards cash flow. I also didn't include 2.7 million in interest expenses since some of it appears to be accruing while some appears to be paid in cash and I haven't yet figured out how much each one is.
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Post by matt on Aug 3, 2018 10:15:11 GMT -5
The 10-Q says that cash now stands at just $26,178,000. At first I thought maybe they had deducted the 20 million they were supposed to have in cash for Deerfield. But upon further study, it's not clear to me whether that is the case. I can't find anything else in the 10-Q to clarify it. So is 26 million actually all they had at the end of the second quarter? Thanks. Cash and cash equivalents were $26 million, which would include the $20 million covenant for Deerfield. In other words, there is not $26+20=$46 in cash which I think was your question. Just have a look at the cash flow statement on the line "Cash and cash equivalents and restricted cash, end of period" which ties out to the balance sheet as it must. Given that this is now early August, the amount of cash is lower by around $7-9 million so the company will definitely be out of compliance with Deerfield at the end of September unless it raises money soon or renegotiates the covenants. As to the comment on "cash burn" it is normally thought of as the cash used in operations plus capital expenditures minus debt payments and stock transactions. On that metric the company burned cash of $27 million in Q2 or $9 million per month versus $21 million in Q1 or $7 million per month. The cash flow statement is a much better guide to the short-term financial health of a company than the income statement which is more of a long-term measurement.
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Post by cretin11 on Aug 3, 2018 11:02:26 GMT -5
Unless scripts do run and share price follows ... like a rocket. Exactly, and hence the 1% estimate - that has about a 1 in 100 odds of happening in the warrant time frame, would you agree? Dennis explained why even if the "rocket" happens the warrants still won't exercise. He might be right but i don't totally follow his logic on that.
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Post by traderdennis on Aug 3, 2018 11:10:50 GMT -5
From the release: The net loss for the second quarter of 2018 was $22.7 million, or $0.16 per share That's a burn of ~$7.5M/month, or I may not exactly understand the meaning of "burn" Burn rate is specifically the amount of cash used in a period. A net loss can include items like depreciation, accounts payable and other items that would not have an effect in the cash balance.
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Post by traderdennis on Aug 3, 2018 11:21:49 GMT -5
Unless scripts do run and share price follows ... like a rocket. Exactly, and hence the 1% estimate - that has about a 1 in 100 odds of happening in the warrant time frame, would you agree? Dennis explained why even if the "rocket" happens the warrants still won't exercise. He might be right but i don't totally follow his logic on that. Lets say on october 31st, the share price is $2.50 per share. 1. You can sell a 2.50 call December call for probably 30 cents (stock price at $2.50) a piece which is greater than the 12 cents you could get today by flipping the shares. Volume would have to justify flipping millions of shares, or there would be slippage. If the price moves down from 2.50 then you get to do it again in January or Feb. If the price goes up, you get the option premium plus they sell shares at $2.50 they pay for at 2.38 and get their 12 cents a share. If you look at the January'19 MNKD options, there are about 7 million shares of sold call options in the 2-4 dollar range. Many I would think were warrant holders already executing this strategy. These warrants have no incentive to exercise early.
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Post by standup on Aug 3, 2018 11:22:50 GMT -5
From the release: The net loss for the second quarter of 2018 was $22.7 million, or $0.16 per share That's a burn of ~$7.5M/month, or I may not exactly understand the meaning of "burn" Burn rate is specifically the amount of cash used in a period. A net loss can include items like depreciation, accounts payable and other items that would not have an effect in the cash balance. In other words: Cash Flow is real and Net Income can be misleading.
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