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Post by agedhippie on Nov 6, 2020 10:04:20 GMT -5
Even though matt seems forever negative (nothing wrong with it!), he is very knowledgeable as per his posts. From his views on depreciation of the plant (and the insides being almost worthless for others - my understanding), it could be barely enough to satisfy the $30-35 million for Midcap? May be that's why they are pushing this sell and lease back? Assuming, the sale is done, MNKD will have new recurring lease payment. Not sure how much would that be.. I'm not an accountant. But, I think you can write off profit against depreciated assets? I just remember reading somewhere - no idea.. Yes, he is. My post was a bit tongue in cheek. Very soon I think we’ll be hearing more about MidCap default!!!! Sale and leaseback is a great idea, if it is allowed. Depreciation basically reduces net income and, thus, taxes. But we don’t have any (of meaning anyway) so.... Actually it's discussed in the 10Q. This will play out the same as it always did with Deerfield - MNKD will concede whatever is necessary to avoid default and in turn Midcap will make the new conditions as tight as they can manage to try and get MNKD into the same position again. Sale of the property is not possible without Midcap's permission and Midcap are going to worry about their security so they will likely increase the restricted cash. I think somewhere MNKD must be gaming out paying off Midcap and doing a straight up capital raise. Right now the cash to pay off the loan is in the bank, but that leaves the operating costs exposed. They have to be thinking about raising operating capital via a raise as that seems logical and get back control somewhat. I missed this the first time I read through the 10Q. I don't think it's a serious risk (aren't these loans meant to be automatically forgiven?) If we fail to take all actions necessary and promptly file all required reporting to ensure than no less than 90% of the PPP Loan is forgiven in accordance with the loan forgiveness provisions of the PPP, we will be in violation of the consent given by MidCap with respect to such additional indebtedness, which could lead to an event of default under the MidCap Credit Facility. Any of these events could have a material adverse effect on our business, results of operations and financial condition. |
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Post by matt on Nov 6, 2020 10:41:26 GMT -5
Even though matt seems forever negative (nothing wrong with it!), he is very knowledgeable as per his posts. From his views on depreciation of the plant (and the insides being almost worthless for others - my understanding), it could be barely enough to satisfy the $30-35 million for Midcap? May be that's why they are pushing this sell and lease back? Assuming, the sale is done, MNKD will have new recurring lease payment. Not sure how much would that be.. I'm not an accountant. But, I think you can write off profit against depreciated assets? I just remember reading somewhere - no idea.. The reason pharma plants have little residual value is as follows: 1. The exterior shell of the building (literally the fours walls and the roof) plus any attached warehouse and office space are pretty generic. Those have value to any purchaser of industrial property and will fetch the going price in Darien for a building of that age and condition. 2. Inside the building is what I call "the box". The box is an empty shell that does nothing but keep the rain out and provide some insulation. Inside the box, production rooms are built and any necessary utilities (like air handling for clean rooms) are run between the top of the production room and the roof of the box because there is a lot of space up there. A single box might have twenty different production rooms depending on the size of the plant. 3. The production rooms themselves are built to house a specific production process and each of them is unique. If a different product moves into the space, the existing room is taken down and a new room is built in its place. Some factories use modular walls that are moveable and this reduces the cost of reconfiguration, but the bigger expense is moving around the utilities. Sometimes the room is just demolished as the materials are not that costly. That is why the interior of the plant has little value to a new purchaser; it is almost inconceivable that a new purchaser can recycle MNKDs room layout into an efficient facility so they just demolish what they find and start over. 4. A lot of the money is spent on production equipment that goes inside the room. Production equipment that is fairly modern (say,five years old or newer) has a resale value of about 10 cents on the dollar. Why so low? It has to do with drug regulation. When a drug goes through clinical trials, the production process is part of what is approved. If in Plant A a company controls a production process with a piece of equipment from ThermoFisher and in Plant B there is a similar piece of equipment produced by Siemens, that production process has to be totally revalidated in case the ThermoFisher instrument performs differently from the Siemens instrument. This is expensive to do and, more importantly, revalidation is very time consuming and extends the length of the project just when additional production capacity is needed. So pharma companies are in the habit of ordering the exact same equipment from the exact same manufacturers when they build out a new production suite because the additional costs involved are normally less than the loss of sales caused by the delay. Even using identical equipment does not guarantee that the final product will be identical, but if there is a problem it is easier to track down the reason for it. So, that is why the outside of the building has considerable value to a third-party buyer, but the inside of the box has much less value. And yes, depreciation is a tax-deductible expense that reduces the income subject to tax. This only helps if the entity is a taxpayer and, as of now, MNKD has $3 billion in tax loss carryforwards. The company does not need any more tax deductions! |
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Post by pat on Nov 6, 2020 12:28:37 GMT -5
Yes, he is. My post was a bit tongue in cheek. Very soon I think we’ll be hearing more about MidCap default!!!! Sale and leaseback is a great idea, if it is allowed. Depreciation basically reduces net income and, thus, taxes. But we don’t have any (of meaning anyway) so.... Actually it's discussed in the 10Q. This will play out the same as it always did with Deerfield - MNKD will concede whatever is necessary to avoid default and in turn Midcap will make the new conditions as tight as they can manage to try and get MNKD into the same position again. Sale of the property is not possible without Midcap's permission and Midcap are going to worry about their security so they will likely increase the restricted cash. I think somewhere MNKD must be gaming out paying off Midcap and doing a straight up capital raise. Right now the cash to pay off the loan is in the bank, but that leaves the operating costs exposed. They have to be thinking about raising operating capital via a raise as that seems logical and get back control somewhat. I missed this the first time I read through the 10Q. I don't think it's a serious risk (aren't these loans meant to be automatically forgiven?) If we fail to take all actions necessary and promptly file all required reporting to ensure than no less than 90% of the PPP Loan is forgiven in accordance with the loan forgiveness provisions of the PPP, we will be in violation of the consent given by MidCap with respect to such additional indebtedness, which could lead to an event of default under the MidCap Credit Facility. Any of these events could have a material adverse effect on our business, results of operations and financial condition.I have not been following it closely. But the minimum cash requirement, as I have come to understand it here, does raise the question of paying off Midcap completely in the near term. Then the sale/leaseback would probably bridge the gap to UTHR royalties, with some ATM activity. Again, just me speaking conceptually off the cuff. I’m not too worried about PPP forgiveness. Payroll is such they should have been able to use the required percentage for that in the required timeframe. Should be a paperwork exercise at this point. Unless I’m missing something? |
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Post by parrerob on Nov 6, 2020 14:16:20 GMT -5
Hi Guys
Only for curiosity, here are some historical results of MNKD pps the day after an Earning Calls…. Took as sampling just the recent 4 years (2020, 2019, 2018, 2017).
Interesting to note it begins with a +7% with pps at 2.22 (march 2017) and last earnings (2 days ago) with a +7% with pps at 2.23
Earning Call date + PPS reaction day after the call + PPS value at closure day after call
16/03/2017 +7,25% $2,22
10/05/2017 -20,63% $1,27
07/08/2017 -1,71% $1,15
07/11/2017 -7,69% $3
27/02/2018 -7,28% $2,93
09/05/2018 -1,12% $1,77
02/08/2018 -23,33% $1,15
01/11/2018 -4,69% $1,83
26/02/2019 +6,25% $1,87
07/05/2019 -6,21% $1,36
07/08/2019 -4,46% $1,07
06/11/2019 -4,55% $1,26
25/02/2020 +3,70% $1,4
06/05/2020 -0,76% $1,31
05/08/2020 -10,75% $1,66
04/11/2020 +7,73% $2,23
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Post by barnstormer on Nov 6, 2020 14:21:10 GMT -5
Apparently now that Mike and teams option shares are vesting he is suddenly interested in avioding dillution. Hell, let's just sell the plant, we don;t want our shares dilluted. If he was truly creative and effective, this option wouldn't need to be considered. Al's life work is slowly being unravelled by amature CEOs Lol. Blows my mind why some people stay invested when they have similar opinions. This amateur ceo is going to make us a lot of money. Blows my mind that people have been saying that for years on this board and still believe their own BS. They can't point to anything specific, but they just keep hoping if they wait long enough, something good will happen. Rest & Grow = Rest & Hope. Neither is a sound investment strategy. But good luck to you. |
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Post by cretin11 on Nov 6, 2020 14:43:38 GMT -5
Hi Guys Only for curiosity, here are some historical results of MNKD pps the day after an Earning Calls…. Took as sampling just the recent 4 years (2020, 2019, 2018, 2017). Interesting to note it begins with a +7% with pps at 2.22 (march 2017) and last earnings (2 days ago) with a +7% with pps at 2.23 Earning Call date + PPS reaction day after the call + PPS value at closure day after call 16/03/2017 +7,25% $2,22 10/05/2017 -20,63% $1,27 07/08/2017 -1,71% $1,15 07/11/2017 -7,69% $3 27/02/2018 -7,28% $2,93 09/05/2018 -1,12% $1,77 02/08/2018 -23,33% $1,15 01/11/2018 -4,69% $1,83 26/02/2019 +6,25% $1,87 07/05/2019 -6,21% $1,36 07/08/2019 -4,46% $1,07 06/11/2019 -4,55% $1,26 25/02/2020 +3,70% $1,4 06/05/2020 -0,76% $1,31 05/08/2020 -10,75% $1,66 04/11/2020 +7,73% $2,23 Thanks for that research parrerob! It backs up what several of us have been telling newcomers to the stock. Those who consistently predict huge gains following MNKD earnings calls have been consistently wrong. Nice to see an outlier yesterday with the up day (though the entire market was way up too). |
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Post by goyocafe on Nov 6, 2020 14:56:45 GMT -5
Lol. Blows my mind why some people stay invested when they have similar opinions. This amateur ceo is going to make us a lot of money. Blows my mind that people have been saying that for years on this board and still believe their own BS. They can't point to anything specific, but they just keep hoping if they wait long enough, something good will happen. Rest & Grow = Rest & Hope. Neither is a sound investment strategy. But good luck to you. I resemble that remark! 😏 My only defense is that my outlook (hope) has never been about the CEO, but all of the carrots I’ve had dangled in front of me over the years. 1. Cancer molecules, sold off for peanuts 2. Pain compounds that would revolutionize the market, faded into oblivion 3. RLS, a complete “pipe” dream 4. A bottomless pipeline, after years its just another shell game, keep an eye on the ball 5. A better label, ADA SOC prominence, tiered insurance without rejection and PA as sop, none of which have driven sales, only a frustrating discussion in percentages (the only way to keep real dollars off the table), just stop talking about it, we’ll eventually forget. Every sales strategy that’s been implemented over the past 4 years has been to work around the ADA and help patients through the rejection/PA process 6. Pipeline halted to focus on COVID-19, another mirage No matter the CEO, it’s the same process. Transparency, transparency, transparency, I think they interpreted this as how not to be seen (lessons from Monty Python) still waiting... |
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Post by sr71 on Nov 6, 2020 15:19:04 GMT -5
Blows my mind that people have been saying that for years on this board and still believe their own BS. They can't point to anything specific, but they just keep hoping if they wait long enough, something good will happen. Rest & Grow = Rest & Hope. Neither is a sound investment strategy. But good luck to you. I resemble that remark! 😏 My only defense is that my outlook (hope) has never been about the CEO, but all of the carrots I’ve had dangled in front of me over the years. 1. Cancer molecules, sold off for peanuts 2. Pain compounds that would revolutionize the market, faded into oblivion 3. RLS, a complete “pipe” dream 4. A bottomless pipeline, after years its just another shell game, keep an eye on the ball 5. A better label, ADA SOC prominence, tiered insurance without rejection and PA as sop, none of which have driven sales, only a frustrating discussion in percentages (the only way to keep real dollars off the table), just stop talking about it, we’ll eventually forget. Every sales strategy that’s been implemented over the past 4 years has been to work around the ADA and help patients through the rejection/PA process 6. Pipeline halted to focus on COVID-19, another mirage No matter the CEO, it’s the same process. Transparency, transparency, transparency, I think they interpreted this as how not to be seen (lessons from Monty Python) still waiting... 7. Failed Mid-East deal |
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Post by mnkdfann on Nov 7, 2020 13:30:53 GMT -5
Hi Guys Only for curiosity, here are some historical results of MNKD pps the day after an Earning Calls…. Took as sampling just the recent 4 years (2020, 2019, 2018, 2017). Interesting to note it begins with a +7% with pps at 2.22 (march 2017) and last earnings (2 days ago) with a +7% with pps at 2.23 Earning Call date + PPS reaction day after the call + PPS value at closure day after call 16/03/2017 +7,25% $2,22 10/05/2017 -20,63% $1,27 07/08/2017 -1,71% $1,15 07/11/2017 -7,69% $3 27/02/2018 -7,28% $2,93 09/05/2018 -1,12% $1,77 02/08/2018 -23,33% $1,15 01/11/2018 -4,69% $1,83 26/02/2019 +6,25% $1,87 07/05/2019 -6,21% $1,36 07/08/2019 -4,46% $1,07 06/11/2019 -4,55% $1,26 25/02/2020 +3,70% $1,4 06/05/2020 -0,76% $1,31 05/08/2020 -10,75% $1,66 04/11/2020 +7,73% $2,23 It might be useful to compare how the overall market did on each of those days. |
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