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Post by EveningOfTheDay on Jul 31, 2015 11:25:14 GMT -5
I shot Matt a quick email about the note exchange agreement and this is what he literally reply to me,
"If the notes are not converted in this process, they will mature and need to be repaid in cash on August 15, unless something else is worked out with them. That is the reason for the timing, not the earnings call date.
The 9 million shares come back to us after the old notes mature. One of the reasons this was structured in this way was to ensure this would still happen. The new notes, while we think of them as being an extension of the old notes, were structured as replacements and only given to those able to do this without our having to put up a borrow facility. Those that needed to hedge are being offered shares instead.
Hope that makes sense.
Matt"
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Post by mike0475 on Jul 31, 2015 11:29:25 GMT -5
EoTD.. wow..thanks for sharing.. I may be totally off .. sounds like they may want to force hand to push forward or just payoff.. now 12u and additionall lines just released.. timing...
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Post by dreamboatcruise on Jul 31, 2015 11:38:15 GMT -5
I shoot Matt a quick email about the note exchange agreement and this is what he literally reply to me, "If the notes are not converted in this process, they will mature and need to be repaid in cash on August 15, unless something else is worked out with them. That is the reason for the timing, not the earnings call date. The 9 million shares come back to us after the old notes mature. One of the reasons this was structured in this way was to ensure this would still happen. The new notes, while we think of them as being an extension of the old notes, were structured as replacements and only given to those able to do this without our having to put up a borrow facility. Those that needed to hedge are being offered shares instead. Hope that makes sense. Matt" So there basically are 15 days to convert 10% on any given day if price is above floor. We aren't really sure whether we've yet had a day above floor. MNKD has the ability to reset floor which does give them some certainty of being able to convert... but of course it would be at cost of more shares. Is this correct? So as days pass without being above floor and no conversions then we would anticipate that MNKD will relent and drop floor so that by Aug 15 most if not all of the $57M is converted. |
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Post by EveningOfTheDay on Jul 31, 2015 11:46:47 GMT -5
So there basically are 15 days to convert 10% on any given day if price is above floor. We aren't really sure whether we've yet had a day above floor. MNKD has the ability to reset floor which does give them some certainty of being able to convert... but of course it would be at cost of more shares. Is this correct? So as days pass without being above floor and no conversions then we would anticipate that MNKD will relent and drop floor so that by Aug 15 most if not all of the $57M is converted. So it would seem. Of course, Matt's answer has spark a new set of questions. For example, why would they offer this deal unless they thought a good percentage of the debt would be able to be converted. Makes little sense to do this to end up in the same place on August 15. At any rate, my take away is that one way or another we still will see a resolution of the issue on August 15, or at least that is what I am hoping for. |
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Post by mannmade on Jul 31, 2015 11:51:42 GMT -5
Perhaps knowing they have Al available is one reason. Also seems to be a good reason to expect share price to stay low until resolved due to conversion floor.
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Post by EveningOfTheDay on Jul 31, 2015 11:56:52 GMT -5
EoTD.. wow..thanks for sharing.. I may be totally off .. sounds like they may want to force hand to push forward or just payoff.. now 12u and additionall lines just released.. timing... It does sound like they are trying to get holders to convert under better conditions than the original deal, but still in a way that ensures that it will not spin out of control. It, however, leaves me with little confidence as to how much of the debt will be converted. I do not doubt that MNKD will be able to repay, but it would seem they would prefer conversion to dedicating funds to the repayment of the debt. Something that probably makes sense at this stage of the game. |
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Post by EveningOfTheDay on Jul 31, 2015 12:01:59 GMT -5
Perhaps knowing they have Al available is one reason. Also seems to be a good reason to expect share price to stay low until resolved due to conversion floor. Yes, I don't expect share price to go anywhere for the duration. We might also take another beating at the end of the 10 days if the conversion rate is low, regardless of whether MNKD has the ability to repay, which I do not doubt they do. In any case, as I said, I see the resolution of the issue as a positive, not withstanding any short term effects on the sp. |
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Post by dreamboatcruise on Jul 31, 2015 12:05:52 GMT -5
Perhaps knowing they have Al available is one reason. Also seems to be a good reason to expect share price to stay low until resolved due to conversion floor. Not sure I am very confident in the Al put. To me it seems long ago Al probably made clear that he is done supporting MNKD. If he were wiling to throw in another $60 - $100M he certainly could, and it would have been a lot better for him to have done so vs this rather confusing arrangement. I don't think he is willing. I think just like the fact (or is it rumor) that he isn't leaving a big inheritance to some of his kids because he has already been too generous while they were growing up... I suspect he views his role as generous parent of MNKD is now over and it must fend for itself. Could be wrong, but if he were inclined to step in it would seem he would have every incentive to make clear that he is willing. Even making the willingness clear could negate the need for it. I am NOT saying Al has lost confidence in Afrezza or MNKD, simply that I think he made a decision at some point that MNKD is mature enough to fend for itself in the markets. |
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Post by dreamboatcruise on Jul 31, 2015 12:10:00 GMT -5
So there basically are 15 days to convert 10% on any given day if price is above floor. We aren't really sure whether we've yet had a day above floor. MNKD has the ability to reset floor which does give them some certainty of being able to convert... but of course it would be at cost of more shares. Is this correct? So as days pass without being above floor and no conversions then we would anticipate that MNKD will relent and drop floor so that by Aug 15 most if not all of the $57M is converted. So it would seem. Of course, Matt's answer has spark a new set of questions. For example, why would they offer this deal unless they thought a good percentage of the debt would be able to be converted. Makes little sense to do this to end up in the same place on August 15. At any rate, my take away is that one way or another we still will see a resolution of the issue on August 15, or at least that is what I am hoping for. Will not be good if there are unknowns at the point of the quarter CC. There needs to be a clear resolution of how many shares and how much cash outlay. If 100% has not converted in first 10 days, does the conversion formula continue daily until Aug 15? |
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Post by EveningOfTheDay on Jul 31, 2015 12:14:12 GMT -5
Perhaps knowing they have Al available is one reason. Also seems to be a good reason to expect share price to stay low until resolved due to conversion floor. Not sure I am very confident in the Al put. To me it seems long ago Al probably made clear that he is done supporting MNKD. If he were wiling to throw in another $60 - $100M he certainly could, and it would have been a lot better for him to have done so vs this rather confusing arrangement. I don't think he is willing. I think just like the fact (or is it rumor) that he isn't leaving a big inheritance to some of his kids because he has already been too generous while they were growing up... I suspect he views his role as generous parent of MNKD is now over and it must fend for itself. Could be wrong, but if he were inclined to step in it would seem he would have every incentive to make clear that he is willing. Even making the willingness clear could negate the need for it. I am NOT saying Al has lost confidence in Afrezza or MNKD, simply that I think he made a decision at some point that MNKD is mature enough to fend for itself in the markets. Well, to be honest I do not really think Al would let MNKD fail if it came down to it, but I also think that it might be better for MNKD's image to not be seen as a company that constantly needs the backing of it billionaire largest shareholder. Confidence wise it is better if the company can find solutions that do not require Al to have to constantly jump in. |
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Post by kc on Jul 31, 2015 12:19:54 GMT -5
I think that it will be interesting in the days leading up to the Earnings call. We might see another small run up even with this collar on the share pricing.
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Post by EveningOfTheDay on Jul 31, 2015 12:25:00 GMT -5
Will not be good if there are unknowns at the point of the quarter CC. There needs to be a clear resolution of how many shares and how much cash outlay. If 100% has not converted in first 10 days, does the conversion formula continue daily until Aug 15? Good question, but, as for the terms of the new note exchange agreement, I think conversion is the announced 10% a day for 10 days. See no reason to expand this since I can't see how 5 days might make any difference. At least not after seeing the latest rx numbers (which, although disappointing, are not that surprising). |
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Post by EveningOfTheDay on Jul 31, 2015 12:26:32 GMT -5
I think that it will be interesting in the days leading up to the Earnings call. We might see another small run up even with this collar on the share pricing. KC, if you don't mind me asking, what would be the rationale in that? |
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Post by kc on Jul 31, 2015 12:53:45 GMT -5
Market gyrations and how they will buy into the potential news and let down before the call. I think that it will be interesting in the days leading up to the Earnings call. We might see another small run up even with this collar on the share pricing. KC, if you don't mind me asking, what would be the rationale in that? |
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Post by jpg on Jul 31, 2015 13:00:04 GMT -5
Hard to believe they couldn't have structured this in a better way?
It almost like they walked into a line of fire.
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