Cash

[Deleted]

Mannkind is going to need some and I understand it takes a bit of time to raise.  So the question for the board, what is the most realistic scenario?  

Common Equity - at current SP, more dilution would mean SP below what, $0.44 or a bit lower and is this even a possibility for a company that has received a delisting notice?

Debt - are there any assets to be used as collateral?

Publicly Traded Debt - not sure what ramifications are.  

What Knight - business partner who kicks in a minimum of $50 mm

Sanofi settlement - does not seem likely

Company X (If profitable with positive Cash Flow) does a reverse merger into Mannkind - would this allow the losses to be used and is it even legal?

Insulin Put - modest amount of money that would not provide much runway to continue operations.


If anyone has other ideas as to how we raise $$, please share your thoughts.


I know Matt P said there is enough to get us to Q1 '17.  To me this means maybe mid-Jan but it would not surprise me if there is only enough to get us through early December. Either way, its not like any of this can be done in a week or two so realistic to think Mannkind is working diligently to address this.  

Last question, when do you think is the latest possible date we will hear something about additional cash being raised?  

[therealisaching]

Agree, slim pickings.

Perhaps an additional development loan from Deerfield based on epi prospects. 

[therealisaching]

Although unlikely, I'd still love to see the foundation increase the line by 50MM.  Their net worth has dropped to $80MM at this point.  Showing an extended cash runway would cause some of the short position to close, have the sp bounce back so dillution could occur at a more reasonable level.

[saxcmann]

Sept 27, 2016 8:33:55 GMT -5 @scotta said:

Mannkind is going to need some and I understand it takes a bit of time to raise.  So the question for the board, what is the most realistic scenario?  

Common Equity - at current SP, more dilution would mean SP below what, $0.44 or a bit lower and is this even a possibility for a company that has received a delisting notice?

Debt - are there any assets to be used as collateral?

Publicly Traded Debt - not sure what ramifications are.  

What Knight - business partner who kicks in a minimum of $50 mm

Sanofi settlement - does not seem likely

Company X (If profitable with positive Cash Flow) does a reverse merger into Mannkind - would this allow the losses to be used and is it even legal?

Insulin Put - modest amount of money that would not provide much runway to continue operations.


If anyone has other ideas as to how we raise $$, please share your thoughts.


I know Matt P said there is enough to get us to Q1 '17.  To me this means maybe mid-Jan but it would not surprise me if there is only enough to get us through early December. Either way, its not like any of this can be done in a week or two so realistic to think Mannkind is working diligently to address this.  

Last question, when do you think is the latest possible date we will hear something about additional cash being raised?  

-Mann Foundation
Still several months to fund. Everyone watching scripts growth...October will be crucial.

[mnkdnewbie]

You would think someone has 80 mil laying around and could take 25% of the company. I mean for 80 mil you could scoop up 137 million shares and send the 99 million shorts scrambling sending the pps skyrocketing and at least doubling your 80 million investment? Am I off thinking this way?

[Deleted]

Sept 27, 2016 9:07:53 GMT -5 mnkdnewbie said:

You would think someone has 80 mil laying around and could take 25% of the company. I mean for 80 mil you could scoop up 137 million shares and send the 99 million shorts scrambling sending the pps skyrocketing and at least doubling your 80 million investment? Am I off thinking this way?

theoritically yes.
But practically, once the MM sees the buying coming in, and Market along with MM would push the pps up..  word will get around and pps starts to increase.
so Share price may end up $2 at which point you will end up getting only a small piece.

there are still ways to get around and create a squeeze..where are the under billion rich folks..

This is the ticket to get cross that.. come on now

[matt]

Sept 27, 2016 8:33:55 GMT -5 @scotta said:

Mannkind is going to need some and I understand it takes a bit of time to raise.  So the question for the board, what is the most realistic scenario?  

Common Equity - at current SP, more dilution would mean SP below what, $0.44 or a bit lower and is this even a possibility for a company that has received a delisting notice?

Debt - are there any assets to be used as collateral?

Publicly Traded Debt - not sure what ramifications are.  

What Knight - business partner who kicks in a minimum of $50 mm

Sanofi settlement - does not seem likely

Company X (If profitable with positive Cash Flow) does a reverse merger into Mannkind - would this allow the losses to be used and is it even legal?

Insulin Put - modest amount of money that would not provide much runway to continue operations.


If anyone has other ideas as to how we raise $$, please share your thoughts.


I know Matt P said there is enough to get us to Q1 '17.  To me this means maybe mid-Jan but it would not surprise me if there is only enough to get us through early December. Either way, its not like any of this can be done in a week or two so realistic to think Mannkind is working diligently to address this.  

Last question, when do you think is the latest possible date we will hear something about additional cash being raised?  

At the risk of sounding like Negative Nancy, here is my view on those alternatives:

Common Equity - at current SP, more dilution would mean SP below what, $0.44 or a bit lower and is this even a possibility for a company that has received a delisting notice?

Possible, but with a sizeable discount and/or warrant coverage.  If the listing is issue is fixed FIRST then I think you are looking at a minimum economic discount of 40% (cash discount + warrants).  That may not be 40% from today's price since fixing the listing issue may cause some price increase so on a net basis it might be closer to 20-30% if the listing problem is off the table.  If the listing issue is not settled first, then it is uncharted territory.  Suffice it to say that the discount would be significantly larger, at least for a substantial raise.

Debt - are there any assets to be used as collateral?

Valencia is security for Sanofi's loans, and Deerfield is secured by Danbury.  I think (emphasis on think) that there are unencumbered intangibles but those do not have much value in a secured lending scenario because secured lenders want something they can sell quickly and for a predictable price, and intangibles don't meet that definition.

Publicly Traded Debt - not sure what ramifications are.

Anybody can sell debt, but it will probably have to be convertible debt and thus potentially dilutive.  Sanofi and Deerfield have first rights to their collateral, and will have equal priority for any excess loan balance not satisfied by a foreclosure on collateral.  In theory convertible debt could be ranked as first priority, but that would require the other creditors to agree to subordinate their rights and that is so unlikely as to be nearly impossible.  Deerfield, for sure, plays hardball and would not agree to subordination and there really is no mechanism to force them to agree.  Sanofi is a maybe.

What Knight - business partner who kicks in a minimum of $50 mm

Anybody with deep pockets can write a check, but what do they get for their $50 million?  If somebody wanted to own MNKD there are better ways to go about  it, but those strategies aren't helpful to longs.   If the party writing the check was significantly more altruistic than business focused it would be possible, but it would have to be a private entity and not a public company.

Sanofi settlement - does not seem likely

Agree, not likely.

Company X (If profitable with positive Cash Flow) does a reverse merger into Mannkind - would this allow the losses to be used and is it even legal?

Go read Section 382 of the Tax Code (bring lots of aspirin and coffee).  Essentially, Section 382 makes it nearly impossible to use acquired losses to yield a substantial economic benefit EXCEPT when the entity with the accrued losses is bankrupt AND the acquiring entity continues to operate the business for at least two years.  That would require MNKD to declare bankruptcy and the acquiring company would have to want the insulin business.  There is one other alternative scenario in a bankruptcy but MNKD is unlikely to qualify for that treatment, the relevant details are at 26 USC 382(I)(5)(a) for those that want to torture their brain, are well stocked with strong forms of alcohol, and who have access to eight-figure sums of cash.

Insulin Put - modest amount of money that would not provide much runway to continue operations.

I think this has already been counted in management's forecast of cash burn.  If the company sells those rights, the short-term cash situation is improved but the longer-term cash situation is hurt; on a net basis this probably doesn't help.

This is a pretty good laundry list of ideas, but none of them are easy to pull off, and none are painless to shareholders.

[Deleted]

Thanks to everyone for your comments.

I wish I had a crystal ball to know how confident Matt P, Mike C, Claude, Cassandra, Brian and the AMF are as it pertains to Mike C's plans and the chances of success. If it is literally needing to extend the runway through the end of June 2017 to get enough sales and momentum, and the above feel assured this is possible, you know who may have made provisions to address cash. In terms of persistence, no one had anything on Al. I know it sounds very odd, but perhaps if any of these are true, his ghost and legacy are wandering the halls of Valencia and his spirit still guides the company. While things are not good, it still may be imprudent to bet against Al Mann, even posthumously.

[kball]

Sept 27, 2016 9:27:40 GMT -5 matt said:

Sept 27, 2016 8:33:55 GMT -5 @scotta said:

At the risk of sounding like Negative Nancy, here is my view on those alternatives:

Common Equity - at current SP, more dilution would mean SP below what, $0.44 or a bit lower and is this even a possibility for a company that has received a delisting notice?

Possible, but with a sizeable discount and/or warrant coverage.  If the listing is issue is fixed FIRST then I think you are looking at a minimum economic discount of 40% (cash discount + warrants).  That may not be 40% from today's price since fixing the listing issue may cause some price increase so on a net basis it might be closer to 20-30% if the listing problem is off the table.  If the listing issue is not settled first, then it is uncharted territory.  Suffice it to say that the discount would be significantly larger, at least for a substantial raise.

Debt - are there any assets to be used as collateral?

Valencia is security for Sanofi's loans, and Deerfield is secured by Danbury.  I think (emphasis on think) that there are unencumbered intangibles but those do not have much value in a secured lending scenario because secured lenders want something they can sell quickly and for a predictable price, and intangibles don't meet that definition.

Publicly Traded Debt - not sure what ramifications are.

Anybody can sell debt, but it will probably have to be convertible debt and thus potentially dilutive.  Sanofi and Deerfield have first rights to their collateral, and will have equal priority for any excess loan balance not satisfied by a foreclosure on collateral.  In theory convertible debt could be ranked as first priority, but that would require the other creditors to agree to subordinate their rights and that is so unlikely as to be nearly impossible.  Deerfield, for sure, plays hardball and would not agree to subordination and there really is no mechanism to force them to agree.  Sanofi is a maybe.

What Knight - business partner who kicks in a minimum of $50 mm

Anybody with deep pockets can write a check, but what do they get for their $50 million?  If somebody wanted to own MNKD there are better ways to go about  it, but those strategies aren't helpful to longs.   If the party writing the check was significantly more altruistic than business focused it would be possible, but it would have to be a private entity and not a public company.

Sanofi settlement - does not seem likely

Agree, not likely.

Company X (If profitable with positive Cash Flow) does a reverse merger into Mannkind - would this allow the losses to be used and is it even legal?

Go read Section 382 of the Tax Code (bring lots of aspirin and coffee).  Essentially, Section 382 makes it nearly impossible to use acquired losses to yield a substantial economic benefit EXCEPT when the entity with the accrued losses is bankrupt AND the acquiring entity continues to operate the business for at least two years.  That would require MNKD to declare bankruptcy and the acquiring company would have to want the insulin business.  There is one other alternative scenario in a bankruptcy but MNKD is unlikely to qualify for that treatment, the relevant details are at 26 USC 382(I)(5)(a) for those that want to torture their brain, are well stocked with strong forms of alcohol, and who have access to eight-figure sums of cash.

Insulin Put - modest amount of money that would not provide much runway to continue operations.

I think this has already been counted in management's forecast of cash burn.  If the company sells those rights, the short-term cash situation is improved but the longer-term cash situation is hurt; on a net basis this probably doesn't help.

This is a pretty good laundry list of ideas, but none of them are easy to pull off, and none are painless to shareholders.

Matt could you take a stab at the survival percentages of each...

Afrezza?

Mannkind?

Current Shareholders?

[kbrion77]

Sept 27, 2016 9:55:46 GMT -5 @scotta said:

Thanks to everyone for your comments.

I wish I had a crystal ball to know how confident Matt P, Mike C, Claude, Cassandra, Brian and the AMF are as it pertains to Mike C's plans and the chances of success. If it is literally needing to extend the runway through the end of June 2017 to get enough sales and momentum, and the above feel assured this is possible, you know who may have made provisions to address cash. In terms of persistence, no one had anything on Al. I know it sounds very odd, but perhaps if any of these are true, his ghost and legacy are wandering the halls of Valencia and his spirit still guides the company. While things are not good, it still may be imprudent to bet against Al Mann, even posthumously.

I have absolutely in no way shape or form disrespect but really?  Maybe I'll get roasted for this but unless Al left a cash lifeline which I doubt the only thing that will guide this company out of almost certain bankruptcy is Afrezza acceptance and sales.

[Deleted]

Sept 27, 2016 10:07:47 GMT -5 kbrion77 said:

Sept 27, 2016 9:55:46 GMT -5 @scotta said:

Thanks to everyone for your comments.

I wish I had a crystal ball to know how confident Matt P, Mike C, Claude, Cassandra, Brian and the AMF are as it pertains to Mike C's plans and the chances of success. If it is literally needing to extend the runway through the end of June 2017 to get enough sales and momentum, and the above feel assured this is possible, you know who may have made provisions to address cash. In terms of persistence, no one had anything on Al. I know it sounds very odd, but perhaps if any of these are true, his ghost and legacy are wandering the halls of Valencia and his spirit still guides the company. While things are not good, it still may be imprudent to bet against Al Mann, even posthumously.

I have absolutely in no way shape or form disrespect but really?  Maybe I'll get roasted for this but unless Al left a cash lifeline which I doubt the only thing that will guide this company out of almost certain bankruptcy is Afrezza acceptance and sales.

Perhaps I should have phrased it as a "last ditch hail mary" if needed.  No offense taken.  I think my comments are a bit nuts too but hell, given where we are and have been, traditional and rational are out the window.  In any startup, the reasons it will fail always outnumber the reasons it will succeed.  In the end, the key players and financiers ultimately go with their gut.  Numbers are still best guesses and in some cases, they steer one away from what is beyond blatantly impossible but it ultimately comes down to grit and persistence.  Many children have driven themselves beyond what they were capable of because their fathers even in death had great influence on them.    

[surplusvalue]

Sept 27, 2016 10:07:47 GMT -5 kbrion77 said:

Sept 27, 2016 9:55:46 GMT -5 @scotta said:

Thanks to everyone for your comments.

I wish I had a crystal ball to know how confident Matt P, Mike C, Claude, Cassandra, Brian and the AMF are as it pertains to Mike C's plans and the chances of success. If it is literally needing to extend the runway through the end of June 2017 to get enough sales and momentum, and the above feel assured this is possible, you know who may have made provisions to address cash. In terms of persistence, no one had anything on Al. I know it sounds very odd, but perhaps if any of these are true, his ghost and legacy are wandering the halls of Valencia and his spirit still guides the company. While things are not good, it still may be imprudent to bet against Al Mann, even posthumously.

I have absolutely in no way shape or form disrespect but really?  Maybe I'll get roasted for this but unless Al left a cash lifeline which I doubt the only thing that will guide this company out of almost certain bankruptcy is Afrezza acceptance and sales.

 The cash issue even before the beginning of the second launch was apparent to everyone, the company, shareholders, the market ..everyone. Crystal ball is right;why is that? Because one legacy that Al left behind and is still with us is that he ran this public company like it was private..no investor relations section and no transparency. So now we have gone from no transparency to a little more but still way too much vagueness and little guidance. Vagueness about cash, vagueness about the label change,vagueness
about the direct to patient efforts including advertising to let everyone know that Afrezza exists at all. Matt was schooled in this approach and hence more of the same. That's why there continues to be all these "guessing threads" on almost every issue imaginable. The market doesnt like vagueness and we can all see the results expressed in the share price. Even on this cash issue a CEO who is a CFO would know why guidance on this is important for everyone. But then again maybe he doesnt get it since when they had the opportunity to raise cash when the stock was much higher they didnt. 

[slugworth008]

Sept 27, 2016 9:07:53 GMT -5 mnkdnewbie said:

You would think someone has 80 mil laying around and could take 25% of the company. I mean for 80 mil you could scoop up 137 million shares and send the 99 million shorts scrambling sending the pps skyrocketing and at least doubling your 80 million investment? Am I off thinking this way?

  I've wondered about that same thing myself. One would think right?

[avogadro]

Sept 27, 2016 12:49:38 GMT -5 slugworth008 said:

Sept 27, 2016 9:07:53 GMT -5 mnkdnewbie said:

You would think someone has 80 mil laying around and could take 25% of the company. I mean for 80 mil you could scoop up 137 million shares and send the 99 million shorts scrambling sending the pps skyrocketing and at least doubling your 80 million investment? Am I off thinking this way?

  I've wondered about that same thing myself. One would think right?

That would work if the shorts were simply seeking profit.  However, I think they are on a mission to totally destroy MNKD, wipe out Afrezza and thus protect their multi billion dollar insulin markets.  Otherwise why would there be  100,000,000 shares short in a 61 cent?

[dreamboatcruise]

Sept 27, 2016 13:11:56 GMT -5 avogadro said:

Sept 27, 2016 12:49:38 GMT -5 slugworth008 said:

  I've wondered about that same thing myself. One would think right?

That would work if the shorts were simply seeking profit.  However, I think they are on a mission to totally destroy MNKD, wipe out Afrezza and thus protect their multi billion dollar insulin markets.  Otherwise why would there be  100,000,000 shares short in a 61 cent?

From their perspective the answer would be the prospect of making $61 million.