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Post by u1682002 on Jun 28, 2017 10:57:39 GMT -5
My question to experts on this board is: can Mann Group actually refuse this request from MNKD?
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Post by thall on Jun 28, 2017 11:03:11 GMT -5
My question to experts on this board is: can Mann Group actually refuse this request from MNKD? I wondered about that as well. Saying they submitted the request seems to imply that it could be rejected.
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Post by mnkdfann on Jun 28, 2017 11:28:01 GMT -5
A comment someone left on SA says that shares in MNKD are the Mann Group's only (significant) asset. Is that true? If I read it correctly, it says that 10.6 million of the money will be used to repay Mann Group debt interest; so MNKD nets only 19 million dollars? I think these two questions are related. The poster on SA has posited that the Mann Group assets consist principally of MNKD shares. When the Mann Group was created years ago, the price of MNKD was much higher and so the value of the Mann Group, but after the reverse split the 89 million shares (as reported in the March proxy) are now 17.8 million shares. Those are not worth $30.1 million if they were sold today, so one easy way to "use up" the credit line is to capitalize the interest on the balance sheet into the principal balance. To answer the second question, the company only nets $19 million in new cash. This begs two questions: 1. Where is Mike going to get the money to meet the Deerfield debt covenant come September 30? This transaction pretty much destroys the possibility of making it to September without a default if no additional money is raised since it would have been a squeaker even if the full $30.1 million were still available in cash. 2. Does the Mann Group have the $19 million in cash needed to fund this draw-down, or will they have to sell some or all of their MNKD stock to raise it? As a private entity we really don't know what the rest of their balance sheet looks like, but if they are cash poor they may have negotiated to roll the accrued and unpaid interest into the note as that does not require cash from either side. There could be a lot of shares hitting the market in the coming days if they need to raise the rest of the cash. What is clear is that the company needs some new financing options to materialize very quickly. It seems Deerfield has drawn a line in the sand and there will be not more money coming from that source, and now the Mann Group is tapped out as well. "There could be a lot of shares hitting the market in the coming days if they need to raise the rest of the cash." Thanks, that's just what I was wondering about.
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Post by matt on Jun 28, 2017 11:50:23 GMT -5
My question to experts on this board is: can Mann Group actually refuse this request from MNKD? I wondered about that as well. Saying they submitted the request seems to imply that it could be rejected. Can Mann Group refuse the request? Probably not. Since Deerfield agreed to substitute the credit line for actual cash in their covenants, I presume that they reviewed the note to insure that the contractual terms are legally binding. Can Mann Group simply refuse to perform on the contract notwithstanding the fact that it is a valid agreement? Sure, anybody can breach a legally binding contract if they are willing to suffer the economic consequences of doing so, but I doubt that a deliberate breach is in their best interests. As for the "request" the agreement reads as follows: "Whenever Borrower desires an Advance hereunder, Borrower shall notify Lender by facsimile with a transmission confirmation or by electronic mail as long as a read receipt is requested and received no later than 4:00 p.m. Pacific time, sixty (60) calendar days prior to the date on which the Advance is requested to be made."
Under the terms of the note, Mann Group has until Monday, August 28th to actually fork over the cash.
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Post by radgray68 on Jun 28, 2017 12:10:44 GMT -5
Anyone consider that the members of the Mann Group may have spent decades listening to Al list the three things needed for venture to be successful? Those being cash, cash and more cash? If the Mann Group has evidence of a turnaround in the sales and a viable avenue for success, don't you think they might increase the amount available under the loan agreement? I agree it is not OPTIMAL, but it may be the best solution. Al was alive when Sanofi advised they were pulling out. This may have been Al's plan, to go it alone to spite those shortsighted executives. He knew what he owned and I'm pretty sure he related his thoughts to his family.
In other words, what if we woke up tomorrow with $200 million more to borrow? It would seem a shame to me to get so close, with a $billion dollars invested already, to fall short by a few million. jmho
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Post by oldfishtowner on Jun 28, 2017 12:11:30 GMT -5
A comment someone left on SA says that shares in MNKD are the Mann Group's only (significant) asset. Is that true? If I read it correctly, it says that 10.6 million of the money will be used to repay Mann Group debt interest; so MNKD nets only 19 million dollars? I think these two questions are related. The poster on SA has posited that the Mann Group assets consist principally of MNKD shares. When the Mann Group was created years ago, the price of MNKD was much higher and so the value of the Mann Group, but after the reverse split the 89 million shares (as reported in the March proxy) are now 17.8 million shares. Those are not worth $30.1 million if they were sold today, so one easy way to "use up" the credit line is to capitalize the interest on the balance sheet into the principal balance. To answer the second question, the company only nets $19 million in new cash. This begs two questions: 1. Where is Mike going to get the money to meet the Deerfield debt covenant come September 30? This transaction pretty much destroys the possibility of making it to September without a default if no additional money is raised since it would have been a squeaker even if the full $30.1 million were still available in cash. 2. Does the Mann Group have the $19 million in cash needed to fund this draw-down, or will they have to sell some or all of their MNKD stock to raise it? As a private entity we really don't know what the rest of their balance sheet looks like, but if they are cash poor they may have negotiated to roll the accrued and unpaid interest into the note as that does not require cash from either side. There could be a lot of shares hitting the market in the coming days if they need to raise the rest of the cash. What is clear is that the company needs some new financing options to materialize very quickly. It seems Deerfield has drawn a line in the sand and there will be not more money coming from that source, and now the Mann Group is tapped out as well. Matt, you and reverselo may be correct regarding Deerfield, but there is another possibility. Another partial cash payment and partial exchange for stock, as in April, could require MNKD to obtain the cash through the Mann loan. Frankly, I do not know which way it will go. What I do know is that the last time MNKD engaged Greenhill, we got the Sanofi deal. I hope they do better this time. The question I have is: Does hiring Greenhill mean that MNKD is already in serious discussions with a potential partner and needs advice on structuring the deal or that MNKD is desperate to find someone interested in partnering?
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Post by casualinvestor on Jun 28, 2017 12:47:32 GMT -5
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Post by agedhippie on Jun 28, 2017 13:00:50 GMT -5
Anyone consider that the members of the Mann Group may have spent decades listening to Al list the three things needed for venture to be successful? Those being cash, cash and more cash? If the Mann Group has evidence of a turnaround in the sales and a viable avenue for success, don't you think they might increase the amount available under the loan agreement? I agree it is not OPTIMAL, but it may be the best solution. Al was alive when Sanofi advised they were pulling out. This may have been Al's plan, to go it alone to spite those shortsighted executives. He knew what he owned and I'm pretty sure he related his thoughts to his family. In other words, what if we woke up tomorrow with $200 million more to borrow? It would seem a shame to me to get so close, with a $billion dollars invested already, to fall short by a few million. jmho The foundation is unlikely to loan significantly more money simply because it would be financially unwise for the trustees to have that level of concentration in one investment. If this is the foundation then they don't have that much money anyway considering there the loan and current stock holdings. I think the $118 million was the inbound transfer following Al Mann's death. The numbers don't make a lot of sense to me looking at the 990 and the financials tab.
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Post by kbrion77 on Jun 28, 2017 13:14:35 GMT -5
I think these two questions are related. The poster on SA has posited that the Mann Group assets consist principally of MNKD shares. When the Mann Group was created years ago, the price of MNKD was much higher and so the value of the Mann Group, but after the reverse split the 89 million shares (as reported in the March proxy) are now 17.8 million shares. Those are not worth $30.1 million if they were sold today, so one easy way to "use up" the credit line is to capitalize the interest on the balance sheet into the principal balance. To answer the second question, the company only nets $19 million in new cash. This begs two questions: 1. Where is Mike going to get the money to meet the Deerfield debt covenant come September 30? This transaction pretty much destroys the possibility of making it to September without a default if no additional money is raised since it would have been a squeaker even if the full $30.1 million were still available in cash. 2. Does the Mann Group have the $19 million in cash needed to fund this draw-down, or will they have to sell some or all of their MNKD stock to raise it? As a private entity we really don't know what the rest of their balance sheet looks like, but if they are cash poor they may have negotiated to roll the accrued and unpaid interest into the note as that does not require cash from either side. There could be a lot of shares hitting the market in the coming days if they need to raise the rest of the cash. What is clear is that the company needs some new financing options to materialize very quickly. It seems Deerfield has drawn a line in the sand and there will be not more money coming from that source, and now the Mann Group is tapped out as well. Matt, you and reverselo may be correct regarding Deerfield, but there is another possibility. Another partial cash payment and partial exchange for stock, as in April, could require MNKD to obtain the cash through the Mann loan. Frankly, I do not know which way it will go. What I do know is that the last time MNKD engaged Greenhill, we got the Sanofi deal. I hope they do better this time. The question I have is: Does hiring Greenhill mean that MNKD is already in serious discussions with a potential partner and needs advice on structuring the deal or that MNKD is desperate to find someone interested in partnering?Who structured the Biomm agreement does anyone know, hell we don't even know the economics of it. Since MNKD is going at it on their own in the US I would assume they would use the same partnership model as Biomm for other countires so I don't see where Greenhill would come into play for partnership deals. In my opinion they are using them again for either a major restructuring or a majority interest stake deal.
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Post by timri on Jun 28, 2017 13:15:46 GMT -5
Locust valley vs greenhill. Why would they hire two brokering companies?
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Post by agedhippie on Jun 28, 2017 13:18:10 GMT -5
Locust valley vs greenhill. Why would they hire two brokering companies? Different roles. Locust Walk are looking for people to buy the potential products. Greenhill are looking for people to partner or buy the whole company.
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Post by boytroy88 on Jun 28, 2017 13:18:49 GMT -5
Anyone consider that the members of the Mann Group may have spent decades listening to Al list the three things needed for venture to be successful? Those being cash, cash and more cash? If the Mann Group has evidence of a turnaround in the sales and a viable avenue for success, don't you think they might increase the amount available under the loan agreement? I agree it is not OPTIMAL, but it may be the best solution. Al was alive when Sanofi advised they were pulling out. This may have been Al's plan, to go it alone to spite those shortsighted executives. He knew what he owned and I'm pretty sure he related his thoughts to his family. In other words, what if we woke up tomorrow with $200 million more to borrow? It would seem a shame to me to get so close, with a $billion dollars invested already, to fall short by a few million. jmho The foundation is unlikely to loan significantly more money simply because it would be financially unwise for the trustees to have that level of concentration in one investment. If this is the foundation then they don't have that much money anyway considering there the loan and current stock holdings. I think the $118 million was the inbound transfer following Al Mann's death. The numbers don't make a lot of sense to me looking at the 990 and the financials tab. Is the foundation a public entity? If not then how do one know whether they have additional funds or not?
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Post by timri on Jun 28, 2017 13:20:32 GMT -5
Locust valley vs greenhill. Why would they hire two brokering companies? Different roles. Locust Walk are looking for people to buy the potential products. Greenhill are looking for people to partner or buy the whole company. Still very similar. I get what your saying. I would just think you would have one company brokering a deal from a company.
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Post by orlon on Jun 28, 2017 13:32:52 GMT -5
I like the fact that Greenhill works mergers and acquisitions! I'm pretty sure they are aware of Mannkind's position....now to merge, or put up for sale...that is the question.
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Post by agedhippie on Jun 28, 2017 13:33:15 GMT -5
The foundation is unlikely to loan significantly more money simply because it would be financially unwise for the trustees to have that level of concentration in one investment. If this is the foundation then they don't have that much money anyway considering there the loan and current stock holdings. I think the $118 million was the inbound transfer following Al Mann's death. The numbers don't make a lot of sense to me looking at the 990 and the financials tab. Is the foundation a public entity? If not then how do one know whether they have additional funds or not?
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