How many shares available to be issued.

[liane]

ANyone remember (roughly) how many shares are available to be issued from the treasury? Sorry, I'm too busy to look it up.

[me]

140 million authorized, 95.8 issued and outstanding.

[matt]

I make it 21.8 million. That is 140 million authorized, minus 101 million issued, and 17.2 million not issued but reserved for convertible debt, options, and warrants. That leaves 21.8 million as the balance.

[liane]

Thanks matt . I was trying to find out how many they could offer in a rights offering. Using your numbers, it would have be no more than 1 share for every 5 you own. Hope I'm making sense.

[mnkdfann]

May 16, 2017 10:50:34 GMT -5 liane said:

Thanks matt . I was try out how many they could offer in a rights offering. 

Someone else posted that a non-dilutive rights offering is not subject to that same constraint.

if no one else beats me to it, I will try and find that post in a bit.

[matt]

May 16, 2017 10:55:13 GMT -5 mnkdfann said:

May 16, 2017 10:50:34 GMT -5 liane said:

Thanks matt . I was try out how many they could offer in a rights offering. 

Someone else posted that a non-dilutive rights offering is not subject to that same constraint.

if no one else beats me to it, I will try and find that post in a bit.

Delaware law is unclear on this point, and it has been the source of considerable debate.   In at least one case the court held that a shareholder resolution was required for a forward stock split in the absence of a sufficient number of authorized shares.  The whole idea of authorized capital and par value in this day and age is a bit antiquated, but these provisions trip up the best securities lawyers from time to time. 

The preceding is a comment on Delaware law, other states may be different so be careful on that point.  Delaware is all that matters for Mannkind.

[scoy]

May 16, 2017 10:47:10 GMT -5 matt said:

I make it 21.8 million. That is 140 million authorized, minus 101 million issued, and 17.2 million not issued but reserved for convertible debt, options, and warrants. That leaves 21.8 million as the balance.

Currently the warrants are on 9.7 million shares and as of 3/31 were only worth 752,000 dollars, which is 8 cents per share. They're worth considerably less now than on 3/31.

I assume the company could exchange them for a small number of warrants that are close to at the money, and a similar argument could be made for the rest of the 17.2 million shares.

[matt]

May 16, 2017 11:16:30 GMT -5 scoy said:

May 16, 2017 10:47:10 GMT -5 matt said:

I make it 21.8 million. That is 140 million authorized, minus 101 million issued, and 17.2 million not issued but reserved for convertible debt, options, and warrants. That leaves 21.8 million as the balance.

Currently the warrants are on 9.7 million shares and as of 3/31 were only worth 752,000 dollars, which is 8 cents per share. They're worth considerably less now than on 3/31.

I assume the company could exchange them for a small number of warrants that are close to at the money, and a similar argument could be made for the rest of the 17.2 million shares.

To be clear, the 17.2 million consists of 0.7 in restricted stock, 0.8 in senior convertible notes, 9.7 in warrants, and 5.9 in employee options (plus 0.1 rounding).

I don't ever recall seeing a transaction like you describe, essentially an exchange offer to swap outstanding warrants for a different number of warrants with different terms.  At a minimum I think that would require a new or heavily amended registration statement, and those are neither fun to write nor cheap to have reviewed by the law firm and accounting firm (who must sign off).  What I have seen done a number of time is that the company will unilaterally reduce the exercise price of the warrants to some amount slightly in-the-money to encourage immediate exercise, although that usually causes a decline in all shares to the new exercise price, similar to a discounted share offering.  However, it would still be cheaper than issuing new shares at a discount plus warrants plus a banking fee.  Certainly you can do this on the 9.7 in warrants and the 0.8 convertible debt, but it probably wouldn't be possible on employee options and restricted stock for a variety of reasons.