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Post by lakon on Jan 3, 2019 10:39:57 GMT -5
Mike is going to have to ask shareholders to authorize more shares. I have no doubt.
How many more will be enough?
100 million?
125 million?
150 million?
175 million?
200 million?
Is this baby going down or what?
Do not get me wrong. I will be buying because I'm still a fool, and I cannot game this any other way. I'm just wondering how much worse it can get before we reach the end of the rainbow. Will RLS make us all see stars at the end?
Happy New Year everyone!
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Post by boca1girl on Jan 3, 2019 10:44:28 GMT -5
The shares reserved for the 2.38 warrants will now become available after they expire worthless in April. I forgot how many shares were tied to that offer but that might be enough to prevent more authorized shares. Remember that they still have the preferred shares as well.
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Post by lakon on Jan 3, 2019 10:55:46 GMT -5
The shares reserved for the 2.38 warrants will now become available after they expire worthless in April. I forgot how many shares were tied to that offer but that might be enough to prevent more authorized shares. Remember that they still have the preferred shares as well. They need more shares to prevent a hostile takeover. They need more shares for future financing, deal making, hiring incentives, etc. They need more shares for a rainy day. The preferred shares will not protect them, and the preferred shares are far less liquid in these rinse, lather, repeat offerings... (If UTHR, RLS, or someone else is really serious, they might buy the preferred shares in a sweetheart deal, but I would not count on it until more progress is made on all fronts.) |
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Post by madog365 on Jan 3, 2019 10:57:09 GMT -5
From an interview with Motley Fool in November, 2017.
Speights: You announced the upcoming stockholder meeting on authorizing around 140 million new shares. Why that number? Do you anticipate any pushback or difficulty getting the authorization approved?
Castagna: The purpose of the 140 million --- there is no right or wrong number. You could have went for 20 million. you could have went for 200 million. There are 140 million outstanding shares now, so we're just increasing that count to 280 million. The reality is that if you want to make an acquisition, you have to have shares. If you want to continue to expand the company, you might need shares available to do things. To do partnerships, you could need shares, to bring in an ownership in the company.
So we only have 4 million shares left. That's not in the interest of shareholders to run a company and have zero options on the table if things pop up over the next two to three years. So what I didn't want to do, honestly, is say I want 20 million shares and everybody says, "Oh, we have 10% dilution coming." You needed to have a number that was reasonable but not too absurd. I think that's what's important.
We think we're doing the prudent thing by asking for more than we need. Over the next three to five years, we should put those shares to good use. When you think about 140 million, we don't need all those shares tomorrow. That's a misperception a lot of people have.
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IF Castagna plans to stick to his word, there should be no MORE shares authorized for at least 2-4 more years.
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Post by xanet on Jan 3, 2019 11:07:20 GMT -5
From an interview with Motley Fool in November, 2017. We think we're doing the prudent thing by asking for more than we need. Over the next three to five years, we should put those shares to good use. When you think about 140 million, we don't need all those shares tomorrow. That's a misperception a lot of people have.
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IF Castagna plans to stick to his word, there should be no MORE shares authorized for at least 2-4 more years. In November 2017, MNKD was trading at $3/share after raising cash at $6/share. Authorized shares go a lot further at those levels. |
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Post by mannmade on Jan 3, 2019 11:09:03 GMT -5
When all is said and done it looks like mnkd will have approx 235m shares outstanding based on about 95m after r/s and the use of the 140m authorized last year. To be realistic, I would think pending certain extraordinary events such as a deal for a third or fourth molecule with or without Uthr etc... we will likely need 1 or 2 more cash infusions before break even which I am estimating somewhere in 2021. So my guess is mnkd will ask for another 140m to 165m shares.
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Post by #NoMoreNeedles on Jan 3, 2019 11:17:27 GMT -5
I think rather 280M outstanding considering all warrants in play.
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Post by mytakeonit on Jan 3, 2019 13:41:02 GMT -5
You all are wound up on a game similar to monopoly. Need more cash ... just print it. The writing was on the wall when we did that reverse split. It allowed MNKD to get all those phantom shares back to make us whole again. Whole vs Hole ? Anyway, my share count dropped like everyone else. Did that change anything ... nope. And I sleep well at night.
Of course ... wine helps.
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Post by matt on Jan 3, 2019 14:16:44 GMT -5
Cash flow from operations over the last four years has been negative $57 million, 78 million. 64 million, and around 92 million (Q3 YTD figure of $68.6 million annualized), and remember that the 2016 number would have been larger but for the extraordinary gains from the Sanofi settlement. Call it roughly $80 million a year or $20 million a quarter in funding requirements. That is roughly what the company consumes in cash each year to maintain operations, and since Afrezza does not make any contribution to profits at all (gross profit on Afrezza sales is negative), the negative cash flow has to be funded by issuing shares. RLS cash contribution so far has been a rounding error, and except for the initial payment from UTHR, most of the potential from licensing will be longer term money and not shorter term. UTHR has an option on the mystery second molecule, but development milestones are generally tied to R&D progress so while there may be money coming from UTHR there may well be increased research costs almost equal to the development milestones. Call it a wash.
How many shares are needed? Enough to fund approximately $80 million in negative cash flow plus any additional planned increase in R&D expense required to build a pipeline for future licensing deals. If the company doesn't want increasing share authorizations to be an annual event, they may ask for enough new shares to cover the expected need for two years or a bit more. I estimate that the company will need 200-250 million shares to get them through the end of 2021 absent any unexpected windfalls.
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Post by #NoMoreNeedles on Jan 3, 2019 14:47:49 GMT -5
Very well said. There are no big pending surprises with the company, unfortunately. Most probably not other entity wants to be a co-promotion partner after the Sanofi fiasco.
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Post by madog365 on Jan 3, 2019 14:55:04 GMT -5
Cash flow from operations over the last four years has been negative $57 million, 78 million. 64 million, and around 92 million (Q3 YTD figure of $68.6 million annualized), and remember that the 2016 number would have been larger but for the extraordinary gains from the Sanofi settlement. Call it roughly $80 million a year or $20 million a quarter in funding requirements. That is roughly what the company consumes in cash each year to maintain operations, and since Afrezza does not make any contribution to profits at all (gross profit on Afrezza sales is negative), the negative cash flow has to be funded by issuing shares. RLS cash contribution so far has been a rounding error, and except for the initial payment from UTHR, most of the potential from licensing will be longer term money and not shorter term. UTHR has an option on the mystery second molecule, but development milestones are generally tied to R&D progress so while there may be money coming from UTHR there may well be increased research costs almost equal to the development milestones. Call it a wash. How many shares are needed? Enough to fund approximately $80 million in negative cash flow plus any additional planned increase in R&D expense required to build a pipeline for future licensing deals. If the company doesn't want increasing share authorizations to be an annual event, they may ask for enough new shares to cover the expected need for two years or a bit more. I estimate that the company will need 200-250 million shares to get them through the end of 2021 absent any unexpected windfalls. Thanks for the insight as always matt, when do you expect the company will file for bankruptcy? next year or the following year? |
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Post by morfu on Jan 3, 2019 14:59:05 GMT -5
The shares reserved for the 2.38 warrants will now become available after they expire worthless in April. I forgot how many shares were tied to that offer but that might be enough to prevent more authorized shares. Remember that they still have the preferred shares as well. Hihi there,
can someone give a rough sumary, what happened to the 140mil authorized shares in 2018?
I guess about 27mil were given away in December with warrants for another 27mil, what else!?
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Post by agedhippie on Jan 3, 2019 15:42:38 GMT -5
... How many shares are needed? Enough to fund approximately $80 million in negative cash flow plus any additional planned increase in R&D expense required to build a pipeline for future licensing deals. If the company doesn't want increasing share authorizations to be an annual event, they may ask for enough new shares to cover the expected need for two years or a bit more. I estimate that the company will need 200-250 million shares to get them through the end of 2021 absent any unexpected windfalls. Thanks for the insight as always matt, when do you expect the company will file for bankruptcy? next year or the following year? I think his whole point is that it will not have to file for bankruptcy but it will have to burn shares if it continues as it has been. |
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Post by agedhippie on Jan 3, 2019 15:44:05 GMT -5
The shares reserved for the 2.38 warrants will now become available after they expire worthless in April. I forgot how many shares were tied to that offer but that might be enough to prevent more authorized shares. Remember that they still have the preferred shares as well. Hihi there,
can someone give a rough sumary, what happened to the 140mil authorized shares in 2018?
I guess about 27mil were given away in December with warrants for another 27mil, what else!?
The prospectus has a breakdown of where the shares are allocated. Other than those I think there has only been the April 2018 raise and the current raise. |
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Post by madog365 on Jan 3, 2019 16:10:42 GMT -5
Thanks for the insight as always matt, when do you expect the company will file for bankruptcy? next year or the following year? I think his whole point is that it will not have to file for bankruptcy but it will have to burn shares if it continues as it has been. Thanks for the further clarification on matt's posts as always agedhippie. My simple mind will not allow me to understand his complex financial/pharma industry expert analysis. Are you saying that bankruptcy is not around the corner? Here i am unable to sleep at night fearing the foretold bankruptcy like the boogeyman. |
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