|
Post by oldfishtowner on Mar 16, 2020 12:50:57 GMT -5
What are the chances of MNKD securing one of those COVID-19 low interest SBA loans for maybe $50 million or $100 million?
|
|
|
Post by ktim on Mar 16, 2020 13:21:32 GMT -5
I looked up the relevant size standard for pharma company and it seems they qualify as being small. Though the amounts you propose seems very high for what would be offered. Is there any info yet on implementation of emergency SBA loans? I would think that a new program would be based on anticipated or real loss of revenue from the crisis.
|
|
|
Post by oldfishtowner on Mar 16, 2020 15:14:34 GMT -5
I looked up the relevant size standard for pharma company and it seems they qualify as being small. Though the amounts you propose seems very high for what would be offered. Is there any info yet on implementation of emergency SBA loans? I would think that a new program would be based on anticipated or real loss of revenue from the crisis. My logic is that sales calls on physicians might be impacted by the pandemic, as well a routine doctors visits, so at least NRx might be impacted enough that MNKD would be prevented from exercising the additional loan tranches on the MidCap loan. So there is loss of revenue plus impact on access to capital. There is also the possibility that the market meltdown is also impacting any deals that have been in discussion. It has certainly impacted MNKD's ability to raise cash through the ATM.
So there is an argument that the impact/loss is at least $35 million (MidCap loan).
|
|
|
Post by ktim on Mar 16, 2020 16:46:40 GMT -5
I looked up the relevant size standard for pharma company and it seems they qualify as being small. Though the amounts you propose seems very high for what would be offered. Is there any info yet on implementation of emergency SBA loans? I would think that a new program would be based on anticipated or real loss of revenue from the crisis. My logic is that sales calls on physicians might be impacted by the pandemic, as well a routine doctors visits, so at least NRx might be impacted enough that MNKD would be prevented from exercising the additional loan tranches on the MidCap loan. So there is loss of revenue plus impact on access to capital. There is also the possibility that the market meltdown is also impacting any deals that have been in discussion. It has certainly impacted MNKD's ability to raise cash through the ATM.
So there is an argument that the impact/loss is at least $35 million (MidCap loan).
I will be surprised and very happy if that were the case.
|
|
|
SBA Loan?
Mar 16, 2020 17:12:15 GMT -5
via mobile
Post by mnkdfann on Mar 16, 2020 17:12:15 GMT -5
|
|
|
Post by boca1girl on Mar 16, 2020 20:13:09 GMT -5
Does the SBA offer loans to publically traded companies?
|
|
|
Post by ktim on Mar 16, 2020 20:20:28 GMT -5
Does the SBA offer loans to publically traded companies? That's a good question. I only know of the size limits requirements that are different depending on the primary type of business a company is in. Some are revenue based and some are revenue. For pharma it is 1200 employees or less. Though there could be some additional requirement that they not be a public company. My experience has only been as a private company.
|
|
|
Post by boca1girl on Mar 17, 2020 6:57:11 GMT -5
From SBA.gov:
SBA’s efforts to assist entrepreneurs and small business owners are especially critical during these difficult times for the U.S. economy. Throughout America’s history, small businesses have played a leading role as the driver of economic growth and job creation. In fact, more than half of working Americans either own or are employed by a small business. Also, over about the last decade, small businesses created nearly 65 percent of net new private sector jobs.
Doubt MNKD qualifies since this says “private sector”.
|
|
|
Post by cedafuntennis on Mar 17, 2020 8:51:28 GMT -5
From SBA.gov: SBA’s efforts to assist entrepreneurs and small business owners are especially critical during these difficult times for the U.S. economy. Throughout America’s history, small businesses have played a leading role as the driver of economic growth and job creation. In fact, more than half of working Americans either own or are employed by a small business. Also, over about the last decade, small businesses created nearly 65 percent of net new private sector jobs. Doubt MNKD qualifies since this says “private sector”. Private sector does not equate to private holdings. Private sector in my experience means non government. Any one?
|
|
|
Post by mnkdfann on Mar 17, 2020 9:03:03 GMT -5
Also, from the link I posted earlier:
"These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%."
No reason to think Mankind does not have access to credit elsewhere, is there?
Even if not, as previously mentioned, the maximum size of the loan is apparently only $2 million.
|
|
|
Post by boca1girl on Mar 17, 2020 9:58:03 GMT -5
From SBA.gov: SBA’s efforts to assist entrepreneurs and small business owners are especially critical during these difficult times for the U.S. economy. Throughout America’s history, small businesses have played a leading role as the driver of economic growth and job creation. In fact, more than half of working Americans either own or are employed by a small business. Also, over about the last decade, small businesses created nearly 65 percent of net new private sector jobs. Doubt MNKD qualifies since this says “private sector”. Private sector does not equate to private holdings. Private sector in my experience means non government. Any one? Yeah, you’re probably right. I focused on the word private, meaning privately owned.
|
|
|
Post by ktim on Mar 17, 2020 11:18:53 GMT -5
Also, from the link I posted earlier: "These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%." No reason to think Mankind does not have access to credit elsewhere, is there? Even if not, as previously mentioned, the maximum size of the loan is apparently only $2 million. If there is drop in script numbers that cause MidCap 2nd tranche covenants to be missed and Midcap were to decline modifications, MNKD would then probably be in situation where they have no access to credit.
|
|
|
Post by mannmade on Mar 17, 2020 11:20:08 GMT -5
That would hurt Midcap as well.
|
|
|
Post by awesomo on Mar 17, 2020 11:25:01 GMT -5
MidCap has all the leverage, they would get theirs.
|
|
|
Post by ktim on Mar 17, 2020 11:31:16 GMT -5
That would hurt Midcap as well. I would assume they wouldn't take that measure unless they are in a financial situation where they really have to prioritize or curtail cash outflow. They might have a bunch of portfolio companies run into problems and have to make choices about which they support and which they don't. Healthcare isn't the only arena where triage can come into play.
|
|