Offering related?/Could they have offered more?

[batdoc31]

All,

I don’t post much but have been following the stock for years and as a physician I believe in the product and have communicated with Mike in the past about trying to bring Afrezza to the operating room. Like many of you I have lost a lot of money but I am still very hopeful and averaged down once again today...

There has been some discussions on other threads about how many shares were on the offering and whether 20% of available shares is the limit and something about a 6month max period for every offering.

Does anyone know...
1. Did they offer the max amount that was available to them of this supposed 20%? I know they previously authorized a ton of shares that were supposed to be used for emergency purposes (I.E. keep the lights on), but have not been used from last years shareholder meeting.

2. Is it true that they can only do an offering every 6 months or is it a “discounted offering” that this rule applies to?

3. There are conflicting reports to who bought these shares and whether they have already been purchased and where they at a discount or not (warrants... etc)

The reason I’m asking is twofold... this event can be seen as a momentary funding bridge to where we need to get to (ADA) if the max amount wasn’t used and also will affect my opinion of our executives ion how they used their funding resources. We have all been expecting some kind of major catalyst and if they used the max available amount of shares it leads me to believe that catalyst may not be coming...

We’ve been waiting for that major catalyst and I feel like other than the label change we’ve never really been able to land it!
Thoughts???

[liane]

batdoc31 -you might find matt 's post useful:

mnkd.proboards.com/post/143527

[batdoc31]

Yeah I read Matt’s post and that’s what prompted my post... he mentioned the 6months but if I remember correctly we had an offering less than 6 months ago so I got confused??

Ask that post doesn’t mention if the amount of the offering is the 20% max unless I missed it??

Thanks

[matt]

1. Did they offer the max amount that was available to them of this supposed 20%? I know they previously authorized a ton of shares that were supposed to be used for emergency purposes (I.E. keep the lights on), but have not been used from last years shareholder meeting.

The 20% is a moving target based on the shares outstanding, and every issuance to Deerfield, Amphastar, or the Mann Group in lieu of debt repayment changes the outstanding number.  However, given that shares outstanding as of the date of the 10-K were 120 million, this offering is close to the maximum issuable on these terms.  Each discounted issuance has its own 6 month clock so the math gets messy with multiple layers of discounted sales.

Example, if a company had 100 shares outstanding on January 1 they could issue up to 20 new shares at a discount.  However, if they only sold 10 shares in January they could sell the other 10 at a discount in March.  In July, they could sell 20% of the then authorized shares (120 X .2 = 24) but since 6 months had not elapsed since the last discounted sales, they could only sell 24 - 10 = 14 shares in July and would  have to wait until September to sell the last 10.  Like I mentioned, every transaction, whether at a discount or not, changes the math going forward.

2. Is it true that they can only do an offering every 6 months or is it a “discounted offering” that this rule applies to?

The rule is that they cannot issue more than 20% of the outstanding shares in any six month period at a discount unless there is specific shareholder approval.  The company can issue all the shares they want, subject to the authorized limit, if the offering is at market price or if there has been a shareholder vote.

3. There are conflicting reports to who bought these shares and whether they have already been purchased and where they at a discount or not (warrants... etc)

Typically these transactions close within one or two business days after they are announced.  I suspect the money moved today.  The press release was clear that the unit (share plus warrant) was priced at $2.00 which is a substantial discount from yesterday's close.  You will have to wait and see if the purchasers are named in the prospectus supplement; sometime they are and sometimes not.

As to your other question regarding a catalyst, that is in the eye of the beholder.  There is an old saying in biotech that the wise CEO raises money when he can and not when he needs it.  Are the term sheets with upfront cash payments Mile alluded to real or not, and even if they are real would it be reckless to pass up a financing transaction when the money is available.  I could tell you a story either way, but I cannot fault the company for improving the balance sheet.  The financial ratios are far too weak, even after this transaction, and it is prudent to improve that situation.

[batdoc31]

Thanks so much for the clarification!

The question still remains though if we were supposedly so close to a catalyst - term sheet with an oversees partner or so as previously mentioned why not hold out for a higher price per share (a la $6 offering) we did previously or wait until the ADA to do it??

Does this mean that any deal that’s being signed won’t really bring in much in upfront cash? I remember the Brazil deal didn’t really do much for our pps when it was announced. I guess mike kinda alluded to that by lowering the bar when speaking about those term sheets in recent conversations by saying that the money to be made on affrezza is here in the states!

Also still can’t figure out why they completely abandoned the epi inhaler? With all the negative press about epi pens I felt it was a real catalyst for bringing free press to the company!!

[kc]

Apr 6, 2018 15:05:08 GMT -5 batdoc31 said:

All,

I don’t post much but have been following the stock for years and as a physician I believe in the product and have communicated with Mike in the past about trying to bring Afrezza to the operating room. Like many of you I have lost a lot of money but I am still very hopeful and averaged down once again today...

Can you expand on this comment above as several weeks ago one of our good Afrezza users and friend Hillard had Bypass surgery and was having problems getting his BG controlled in the hospital. He sent his wife home to get his Afrezza and it worked like a champ! immediately and his Doctors and Nurses were taken back by this miracle drug.   

[nylefty]

I take anything Proboards Matt writes with a huge grain of salt ever since he made the absurd claim that the contract sales force was costing MannKind $10 million a month. When it was pointed out how ridiculous that number was he never responded.

[batdoc31]

After following the stock and being a cheerleader I thought is there something more I could do for the company?

I started thinking about the world I work in which is the operating room and wondering if afrezza could be used in the operating room via an endotracheal tube like we use albuterol by giving it nebulized during surgery? After speaking with mike he informed me that it wasn’t possible because it requires a patient “inhale” and our patients out being ventilated by a machine... after further thought I suggested that maybe we think about afrezza for rapidly and safely decreasing a patients blood sugar before surgery as many scheduled cases are routinely cancelled due to hyperglycemia?? I thought this could be an easy trial to setup and could eventually lead to another avenue where patients could be exposed to afrezza?

He wanted me to write a protocol but to be honest my clinical practice is so busy I don’t have time to really do this... so it didn’t really go anywhere...

I think controlling blood sugar in an icu setting is a great idea and may be the easier way to go but I still love the idea of using afrezza right before surgery in those outpatient surgery centers if proven safe and effective!!

[agedhippie]

Apr 6, 2018 16:24:31 GMT -5 batdoc31 said:

After following the stock and being a cheerleader I thought is there something more I could do for the company?

I started thinking about the world I work in which is the operating room and wondering if afrezza could be used in the operating room via an endotracheal tube like we use albuterol by giving it nebulized during surgery? After speaking with mike he informed me that it wasn’t possible because it requires a patient “inhale” and our patients out being ventilated by a machine... after further thought I suggested that maybe we think about afrezza for rapidly and safely decreasing a patients blood sugar before surgery as many scheduled cases are routinely cancelled due to hyperglycemia?? I thought this could be an easy trial to setup and could eventually lead to another avenue where patients could be exposed to afrezza?

He wanted me to write a protocol but to be honest my clinical practice is so busy I don’t have time to really do this... so it didn’t really go anywhere...

I think controlling blood sugar in an icu setting is a great idea and may be the easier way to go but I still love the idea of using afrezza right before surgery in those outpatient surgery centers if proven safe and effective!!

Insulin delivered over IV is at least as fast as Afrezza for onset and clearance. Any time you have an established line that is the simplest and most reliable way to deliver the insulin, not least because you probably are going to need to deliver glucose as well. IV delivered insulin has the benefit that the protocols are well understood.

I have never had out-patient surgery, but from personal experience with in-patient surgery you still take your basal insulin and they cut you over to IV delivered Regular insulin and dextrose just before the operation (you are not eating so you are not taking any other insulin).

In an ICU the protocol calls for infusing both insulin and dextrose. It's an established protocol and even works when the patient is in a medically induced coma