|
|
Post by prcgorman2 on Nov 29, 2023 13:59:37 GMT -5
anderson wrote,.......................Thank you Anderson Terms of Current Debts Nov 30, 2022 at 7:37am $230 mil notes can convert at $5.21. So if share price goes above $5.21 before 1 DEC 2025 there shouldn't be a problem with the $230 debt, just dilution from the conversion which should not surprise anyone. $8.8 mil Mann Group can convert $2.50, so these will be converted. $40 mil Midcap. This is the bad one. "The Company must also comply with a financial covenant relating to trailing twelve month minimum Afrezza net revenue, tested on a monthly basis, unless the Company has $90.0 million or more of unrestricted cash and short-term investments." So the Midcap loan actually ties up $50 million more than is needed to repay it since Afrezza net revenue is not on target. Midcap has an interest cap of 8.5% so if Mannkind can invest and get returns greater than that it isn't a problem. It also has early termination fees, which drop to the min of 1% after April 22, 2023. Loan repayments start September 1, 2023, until paid in full on August 1, 2025. So Mannkind will probably just pay back as scheduled, unless they get in a bind and need to drop below the $90 mil reserve. This also explains why they are not spending a lot of cash. So at current burn 14.4 mil a quarter (177.8-90)/14.4 = 6 quarters at current burn before we go below the 90 mil. Thank you peppy! Your last two posts answer my question regarding a breakdown of debt. The "payoff" Steven Binder was referring to is the Midcap loan so paying off $40M in 8 quarters which would be $5M per quarter. Unless something changes, that should be easily doable. The much larger obligation is the $230M and so the $5.21 share price becomes very much in focus before 12/1/2025. |
|
|
|
Post by prcgorman2 on Nov 30, 2023 18:30:31 GMT -5
Does anybody know what are the terms of debt retirement/renegotiation if for some reason the $230M debt isn't converted to shares because the share price isn't at or above $5.21 on 12/1/2025? Just curious.
|
|
|
|
Post by anderson on Dec 1, 2023 0:11:02 GMT -5
Does anybody know what are the terms of debt retirement/renegotiation if for some reason the $230M debt isn't converted to shares because the share price isn't at or above $5.21 on 12/1/2025? Just curious. Page 21 "The Senior convertible notes are general unsecured obligations of the Company and will mature on March 1, 2026, unless earlier converted, redeemed or repurchased." So that is when they have to have shares/cash for the senior convertible notes. So roughly 2 years 4 months before it is due. The December 1, 2025 date is when the note holders can choose to start converting. Note MNKD can redeem all or part of the note for cash starting March 6, 2024 if the stock price is 130% the conversion price ($6.78) for 20 days. So could still see some dilution (34 million shares or less) next year if we get above $6.78 to retire that debt. If it is converted at $5.21 that is 44 million shares. You can see on page 2 the "Weighted average shares used to compute net income (loss) per share – diluted" seems to include the roughly 34 million shares so that dilution is already being factored in. Also an aside note the short interest is at 38 million shares, makes you think. |
|
|
|
Post by prcgorman2 on Dec 1, 2023 8:20:13 GMT -5
Excellent information. Thank you so much anderson ! Good point about SI and the senior convertible notes. 2nd quarter of 2026 could be extremely interesting. |
|
|
|
Post by cretin11 on Dec 1, 2023 11:09:08 GMT -5
“So could still see some dilution (34 million shares or less) next year if we get above $6.78 to retire that debt.”
That would an example of welcome dilution.
|
|
|
|
Post by Chris-C on Dec 1, 2023 11:56:15 GMT -5
We just had a breakeven quarter, and he says that for the next number of quarters we will be right around breakeven still. That is the very definition of "no earnings growth". And it's pretty clear from the consistently decaying share price that the market doesn't interpret this as a positive signal. Correct no EPS growth, but that is not the whole story in a growth stock. Revenue will continue to grow, but so will cost associated with the pipeline(trial costs), hence no growth in EPS. Amazon did that for years and they were not called dead money. I admire your optimism, but with abundant respect, comparing Mannkind to Amazon doesn’t seem like an appropriate comparison. And I doubt that the AMZN CFO announced to shareholders that the company would not show appreciable net earnings for several quarters. I will refer to this henceforth as the Binder Blunder. |
|
|
|
Post by prcgorman2 on Dec 1, 2023 13:01:05 GMT -5
So the only time a CFO is encouraged to provide "guidance" is if the news is good? Hmmm, something about withholding material information and lawsuits comes to mind...
|
|
|
|
Post by awesomo on Dec 1, 2023 13:20:06 GMT -5
So the only time a CFO is encouraged to provide "guidance" is if the news is good? Hmmm, something about withholding material information and lawsuits comes to mind... Huh? MNKD hasn't provided guidance in many years. This wasn't even specific guidance, it was a blunder of a remark that essentially made MNKD equity dead money for the next few quarters. |
|
|
|
Post by prcgorman2 on Dec 1, 2023 13:30:42 GMT -5
It was material information. Skip sharing that and watch what happens. You'd better lawyer up.
|
|
|
|
Post by awesomo on Dec 1, 2023 13:36:13 GMT -5
It was material information. Skip sharing that and watch what happens. You'd better lawyer up. So all these previous years where they didn't give guidance, they've never had any inkling of what was coming up? Come on... |
|
|
|
Post by prcgorman2 on Dec 1, 2023 14:25:25 GMT -5
It was material information. Skip sharing that and watch what happens. You'd better lawyer up. So all these previous years where they didn't give guidance, they've never had any inkling of what was coming up? Come on... Seriously? You do know what I'm talking about right? The fact that companies get sued for withholding material information and provably misleading investors?
Whether explicit "guidance" is given or not, there have been numerous statements by both UTHR and MNKD regarding the very positive outlook for Tyvaso sales driven by Tyvaso DPI. The most recent UTHR quarterly earnings report showed much reduced growth in revenues as compared to the previous quarter and no statement that the amazing QoQ growth of the previous quarter would return. This isn't bad news but explicit guidance or not it sets the expectation that Tyvaso DPI royalties revenue to MNKD were going to increase at a more modest rate as compared to the previous quarter.
I'll paraphrase what Binder said as "revenue growth will continue at the more modest rate and because we need to pay for pipeline clinical trials, Afrezza studies, and pay down debt due in 24 months, our EPS quarter to quarter will likely vary around Cash Flow Break Even" (CFBE).
CFBE has been discussed multiple times on this board as an important and LONGed for milestone achievement. Nobody said, and nobody should have assumed, that CFBE would be an inflection point in a single quarter.
Because the market previously was led to believe Tyvaso DPI was going to skyrocket (over a period of years) and had demonstrated skyrocket "surprise" performance the previous quarter, I think what Steven Binder did was be forthright. If that is erring on the side of caution to avoid lawsuits for withholding material information about expected financial performance, so be it. I think it was the right thing to do.
|
|
|
|
Post by cretin11 on Dec 2, 2023 3:12:42 GMT -5
Admirable spin effort gorman, albeit unconvincing. Binder’s statement was a blunder, it had nothing to do with satisfying any legal requirement or somehow protecting against lawsuits. Just an ill conceived decision. Binder has been solid heretofore, so I’m wondering if he was directed by the ceo to make the statement. Doesn’t really matter now, just speculation.
|
|
|
|
Post by prcgorman2 on Dec 2, 2023 9:06:35 GMT -5
Admirable spin effort gorman, albeit unconvincing. Binder’s statement was a blunder, it had nothing to do with satisfying any legal requirement or somehow protecting against lawsuits. Just an ill conceived decision. Binder has been solid heretofore, so I’m wondering if he was directed by the ceo to make the statement. Doesn’t really matter now, just speculation. You might want to research how many times and how many companies (including MNKD) have been sued for allegedly misleading investors. You call it spin. I call it fiduciary responsibility with legal consequences. Your spin effort was less admirable. |
|
|
|
Post by awesomo on Dec 2, 2023 11:47:04 GMT -5
So all these previous years where they didn't give guidance, they've never had any inkling of what was coming up? Come on... Seriously? You do know what I'm talking about right? The fact that companies get sued for withholding material information and provably misleading investors?
Whether explicit "guidance" is given or not, there have been numerous statements by both UTHR and MNKD regarding the very positive outlook for Tyvaso sales driven by Tyvaso DPI. The most recent UTHR quarterly earnings report showed much reduced growth in revenues as compared to the previous quarter and no statement that the amazing QoQ growth of the previous quarter would return. This isn't bad news but explicit guidance or not it sets the expectation that Tyvaso DPI royalties revenue to MNKD were going to increase at a more modest rate as compared to the previous quarter.
I'll paraphrase what Binder said as "revenue growth will continue at the more modest rate and because we need to pay for pipeline clinical trials, Afrezza studies, and pay down debt due in 24 months, our EPS quarter to quarter will likely vary around Cash Flow Break Even" (CFBE).
CFBE has been discussed multiple times on this board as an important and LONGed for milestone achievement. Nobody said, and nobody should have assumed, that CFBE would be an inflection point in a single quarter.
Because the market previously was led to believe Tyvaso DPI was going to skyrocket (over a period of years) and had demonstrated skyrocket "surprise" performance the previous quarter, I think what Steven Binder did was be forthright. If that is erring on the side of caution to avoid lawsuits for withholding material information about expected financial performance, so be it. I think it was the right thing to do.
That isn’t material information. And the UTHR earnings report already showed the slowdown, he didn’t reveal anything specific other than just putting a big ole target back on poor MNKD for you to keep blaming the shorts about. |
|
|
|
Post by prcgorman2 on Dec 2, 2023 11:59:52 GMT -5
I didn’t say squat about shorts and haven’t said anything about shorts or even illegal naked shorting in quite awhile. When I did, I questioned more than anything why folks on this board wanted to characterize very high Short Interest Rate as nothing to be concerned about. Regardless, describing or correcting expected financial performance is a key role of the CFO. They have to be careful not to indicate performance that is arguably misleading. It isn’t a blunder to do your job in a prudent and responsible fashion.
|
|
