|
Post by matt on Feb 14, 2017 11:46:39 GMT -5
You speak a half-truth. NASDAQ does require that "all the criteria must be met..." but you failed to mention "under at least one of the three standards below". Obviously you've selected the Equity Standard to make your argument, but MannKind may qualify using the Market Value Standard or Total Assets/Total Revenue Standard, neither of which has a Stockholders' Equity minimum requirement. You posted the wrong chart. There are three markets within NASDAQ: Global Select, Global Market, and Capital Market. Each of the three has initial listing requirements and each has continued listing requirements; you cannot mix and match the categories. Since Mannkind is a Capital Market company, it must meet the continued listing standards for the Capital Market. The chart you posted is for Global Select companies, but since Mannkind was never a Global Select company they cannot use those continued listing standards. Silentknight is correct that Capital Market companies must be compliant with all continued listing standards (except the $1 bid price) in order to qualify for the second 180 compliance period. The three Capital Market initial listing alternatives require either $4 million or $5 million in shareholder equity (per the most recent SEC filed financial statements). Forgiveness of the Sanofi debt and the settlement payment helps with that of course, but Mannkind is still close to $200 million below the minimum initial listing standard, and getting a special exemption when the company is that far out of compliance is not likely to happen.
|
|
|
Post by matt on Feb 14, 2017 11:14:21 GMT -5
It has been a while but I used to have marketing responsibility for all of Asia-Pacific, including Singapore. The city itself is wealthy (as in US standards of wealthy) but it is an exceedingly small market with just 5 million people and a youngish population relative to Western countries. It has not been part of Malaysia since 1967 (Singapore is predominantly ethnically Chinese while Malaysia is definitely not) so whatever happens in Singapore does not affect the Malaysian market directly. I suspect you are seeing patent applications there because a company can start a WIPO application in any country; in Singapore everyone speaks English and it may be cheaper than doing it in the US. Like most small countries, they used to accept either FDA or EMA approvals without much fuss; the city is relatively hassle free for business even if personal conduct is heavily regulated.
I have been to over fifty countries in my career and Singapore ranks among my top five favorite cities in the world. If you ever get a chance to visit then definitely go there. It is kind of like walking around Disney World at times.
|
|
|
Post by matt on Feb 13, 2017 9:16:26 GMT -5
This has been covered ad nausem in other threads. MNKD is ineligible for the extension, per the Nasdaq delisting rules. Why would anyone believe Nasdaq would simply ignore their own regulations governing delisting just for MNKD? The R/S is to keep MNKD on the exchange, not qualify for the extension. Can you show us said rules!! Ive read all the rules and you are obviously confused.. He is not confused. Here is the Market Place Rule at Section 5800 (with the relevant phrase bolded in red):
(ii) Capital Market
If a Company listed on the Capital Market is not deemed in compliance before the expiration of the 180 day compliance period, it will be afforded an additional 180 day compliance period, provided that on the 180th day of the first compliance period it meets the applicable market value of publicly held shares requirement for continued listing and all other applicable standards for initial listing on the Capital Market (except the bid price requirement) based on the Company's most recent public filings and market information and notifies Nasdaq of its intent to cure this deficiency. If a Company does not indicate its intent to cure the deficiency, or if it does not appear to Nasdaq that it is possible for the Company to cure the deficiency, the Company will not be eligible for the second grace period. If the Company has publicly announced information (e.g., in an earnings release) indicating that it no longer satisfies the applicable listing criteria, it shall not be eligible for the additional compliance period under this rule.
MNKD fails on both the bid price requirement of $1 and the shareholder equity standard, so it does not meet "all other applicable standards for initial listing" and thus does not qualify for the additional 180 day compliance period. Mannkind's shareholder equity is so far below the minimum standard, NASDAQ would very likely conclude that it would be impossible to cure the deficiency given the size of the equity raise required to fix the problem.
Assuming that NASDAQ will make an exception to its long-established rules just to accommodate Mannkind is a bit of a stretch, especially if the shareholders have authorized a reverse split that will put the company back into compliance. The listing qualification group at NASDAQ is good about giving informal advice and they may have hinted strongly to management that they would have a hard time making an exception, thus the special meeting to vote on the reverse split.
|
|
|
Post by matt on Feb 9, 2017 17:54:08 GMT -5
IF, and it's a BIG IF, Mann affiliates can participate fully plus subscribe for those declined by existing shareholders, it could be a tacit approval for taking a majority stake and going private. If enough shareholders declined with an equitable distribution algorithm, it could turn out that the Mann Trust controls the entire company. Soon we will know how much farther Mann affiliates will go to see this through. I'm excited to find out. 51% control is not sufficient to take a company private. Once you have registered shares, you are public, and you can't stop being public until your shareholder count OR your total assets drop below SEC specified thresholds. The easiest way is to get rid of all the small shareholders, but you can't force a squeeze out unless there is control of nearly all shares. The squeeze out requirement varies by jurisdiction but if my memory serves me the requirement is 90% for Delaware corporations.
The problem with the Mann Group is that at this point many of the pieces are controlled by trustees other than the family, and those trustees have legal obligations to the various beneficiaries of the individual trusts. What Al might have been willing to do during his life, as grantor of the trusts, the trustees may not be able to do now that he is gone (which is sort of the whole point of creating a trust). Given the track record of this company, I think a trustee would have a hard time investing another penny into MNKD stock whether directly or by converting debt to equity unless there was some very unusual language in the trust agreements. As the trust companies can be sued for breach of fiduciary obligation by the beneficiaries, and many of those trust companies are branches of banks with deep pockets, trustees are usually extremely conservative.
|
|
|
Post by matt on Feb 9, 2017 14:08:10 GMT -5
Question.. if... IF we get a r/s and lets assume 1:10; I understand that we go to $5.00 and decrease to 50 mil o/s (which is all the same except psychologically) does the float of 30 million get decreased to 3 mi??? saw a post the other day where they stated float would stay at 30 million but I thought that should go down too... thanks. The "float" is the number of shares available for trading. Usually this number is close to, or identical with, the shares issued and outstanding. A reverse split consolidates the number issued and outstanding according to the chosen split ratio. Example: If the final split ratio is set at 5:1 then 100 shares becomes 20 shares and, theoretically, each of the new should be worth about 5 times as much as the old shares.
The number of authorized shares do not change when issued shares are forward split or reverse split unless there is a separate resolution on that matter. Some companies executing a reverse split will also vote to reduce the authorized shares by the same split ratio, but that does not happen automatically. The default is no change.
|
|
|
Post by matt on Feb 7, 2017 10:58:15 GMT -5
What does it mean? Not much. It means the algorithm used to rate stocks has changed its view on MNKD, but not all algorithms are equally well-designed. A category shift can happen because the forward looking forecast improves, the stock price drops, or some of each. In this case, I suspect it is driven mainly by the recent price decline without a change in the P&L forecast. Most computer algorithms are not smart enough to understand WHY the PPS has dropped, in this case it is due to the looming reverse split, while human analysts will look into the data for an explanation. Beware of any computer driven ratings as they tend to be nonsensical at times. Zacks, in particular, is a source that a lot of people follow but which tends to be highly inaccurate.
Few professional analysts are still tracking MNKD at this point and any time you have a small sample size the forecasting should be suspect. For example, Yahoo shows 2 analysts for MNKD with revenue estimates for this quarter that range from a high of $11 million to a low of $1 million; quite a difference in percentage terms. In contrast, Microsoft has 27 analysts following with revenue estimates of 23.39B to 24.15B, a much tighter range in percentage terms.
Don't read too much into analyst's ratings; over time virtually all of them underperform the market!
|
|
|
Post by matt on Feb 7, 2017 10:41:19 GMT -5
If, for example, you had 100 calls at a $1 strike and the stock reverse splits 10:1 then you would have 10 calls with a $10 strike price.
Consider if you owned those 100 calls and the market price was $1.20 at expiration. Your profit would be $1.20-1.00 = 20 cents X 100 calls = $20 profit.
Now, consider if the market price of the stock was $12 post-split. Your profit would be $12.00-10.00 = $2.00 X 10 calls = $20 profit.
This is what is known in the option literature as an "equitable adjustment". Because your profit is $20 in either scenario, you are neither enriched nor impoverished by the split. The math works the other way if there is a forward split; you would get proportionately more options with a proportionately lower strike price.
|
|
|
Post by matt on Feb 6, 2017 9:07:30 GMT -5
My former employer (GE) just switched its employees and retirees from CVS Caremark to OptumRX (a division of UnitedHealth) I'm not diabetic but just checked and as a retiree a 90 day supply of Afrezza would cost me $35. No mention of a need for prior authorization (which Caremark required). You have to be careful when evaluating insurers. Your former employer GE might have switched prescription processing from CVS Caremark to OptumRx, but that doesn't mean they buy insurance coverage from those companies. GE, like most large employers, are self-insured and the company can pick and choose what they cover at what level. In those cases the PBMs just fill scripts for a fixed fee and GE pays whatever they have to pay for the drug. Most of the cases where Afrezza is well-reimbursed seem to be the more generous large employer plans which is great if you work for one of those companies.
In some other cases the large PBMs make Afrezza not available at all, or they "cover" it but put it on the lowest tier possible. When you get a tier 3 drug from a PBM you might as well be paying out-of-pocket since the amount covered plus the co-pay will be nearly as much as full retail price. You have to be careful to distinguish self-funded employer plans that use the large PBMs to administer their prescription benefits versus true insurance plans that use the large PBMs who take risk on the cost of the drugs. Since all the large insurance companies and all the PBMs act both as true insurance companies and as third-party administrators for self-insured plans, it is important to understand what kind of plan is covering Afrezza. The benefits provided by the same insurer, like United Healthcare, may differ substantially even within the same geographic market depending on who is taking the underwriting risk. As in most things, the company that actually writes the checks gets to decide what is covered.
|
|
|
Post by matt on Feb 4, 2017 9:20:26 GMT -5
Shareholders have a legal right to know any material information about the company. If the Mann trusts had decision making power of any type that would have been a required disclosure long ago. Whatever else you think about management, their SEC filings are in order.
As for foreign companies willing to roll the dice, don't be so sure. Why should anybody pay $30-50 million for UK rights when, two years after launch, the cumulative retail sales in the US market have barely reached $20 million and prices in the UK are an order of magnitude lower? That one just doesn't pass the reality check. It seems like a good idea at first glance, but fixing a US marketing problem by going international rarely works for any company.
|
|
|
Post by matt on Feb 3, 2017 9:41:17 GMT -5
In light of today's unexpectedly good NRx, hypothetically, say scripts improve over the next month and into March and the stock price increases to $0.90. With stockholders having approved the reverse stock split, expecting that the stock price to punch through $1 in another month or two, does Matt wait for the delisting letter and ask for an extension or does he go ahead with the split? If the price is still below $1 come March 3 the company will execute the reverse split. The NASDAQ has criteria for granting extensions but MNKD does not meet those and there is no particular reason to expect that the appeals panel will grant an exception to this company, especially if NASDAQ knows that a reverse split has been authorized by the shareholders. It would be irresponsible of Matt to solicit permission for a reverse split, incur the share price impact that has occurred, and then play chicken with the appeals panel by not triggering the split thus daring them to delist the company (there is no way back from a misjudgment). NASDAQ holds all the cards here, MNKD does not.
|
|
|
Post by matt on Feb 2, 2017 11:57:49 GMT -5
Listen and learn - many of you have posted your disappointment, and have mentioned having some form of liquor or another to help soothe your feelings; well, guess what, you're doing it all wrong! I spoke to a very wise female poster today about half hour before the CC - she indicated she had already begun drinking in order to be best prepared for the CC. Now that was a true stroke of brilliance and perspicacity. This is called premedication and is a technique used extensively in medical practice, especially before a difficult surgery such as a R/S. While Jack Daniel's is a poor substitute for opioids and benzodiazepines it is effective at reducing the worst of the pain so long as you don't overmedicate.
|
|
|
Post by matt on Feb 2, 2017 9:07:54 GMT -5
I am comforted by Mike's comment about Afrezza sales being sensitive to promotion (no surprise) and the importance of the sales team's reach and frequency with providers. I have no doubt that Afrezza is sensitive to reach and frequency, but I wonder if MNKD can manage that with a tiny sales force. In some regions of the country, 80% of the offices are "no see" meaning that they will not allow visits from salesmen. In other places it is more like 30%, but the busier the office the more likely it is that they are no see practices. Part of that is a backlash against past practices where some Big Pharmas overdid frequency with 4-5 different salesmen pushing the same drug in the same office (share of voice marketing), and part is the reality of the current managed care environment where physicians are scrambling to make time to see their patients. While share of voice has pretty much gone away, the policies remain in place, and I wonder how effective any sales force can be if they are knocking on closed doors.
The comment about startups learning to survive near death experiences is certainly correct. I spent time at one where we had decided to terminate almost all the employees (about 50) at 5:00 PM because we were completely out of money; only a few would remain to shut things down. We managed to close on a few hundred thousand at 4:30 PM, putting off disaster for that day, managed another raise for a few million the following week, and slowly crawled out of the hole as the PPS went from around 20 cents to $4.50 over the next 18 months. That was more than ten years ago and when last I looked the company was still breathing.
Near death experiences jade company management, sometimes in a good way and sometimes in a bad way, but life is never the same. I don't know that Matt and Mike have the skills to navigate through the rough waters, but we will all find out in the coming months.
|
|
|
Post by matt on Feb 2, 2017 8:46:31 GMT -5
The other question would be do you have voting rights to the shares with them out on loan. If not you probably need to call them back in. Somehow we need to research this issue very quickly. When you loan shares you still own them, and you still have all voting and economic rights. Any shares on loan will get a proxy statement. However, is it not correct that the Mann trusts have enough votes to effect this change; they do not. Most shareholder votes are decided by a majority of the shares VOTED while for a reverse split it is a majority of the shares OUTSTANDING. Mathematically that means that any vote not cast is equivalent to a "No" vote, and with so many retail holders who are not paying attention to what is happening a lot of proxy cards will go in the waste basket. Similarly, any shares held in street name cannot be voted by the brokers on this type of issue; the shareholders must vote the proxy. The Mann trusts own roughly 30% of MNKD and it certainly helps that those votes can be counted on to support management, but that leaves 20% more to be found. MNKD would not be the first company faced with a delisting that failed to get a qualified majority on the first attempt.
|
|
|
Post by matt on Feb 2, 2017 8:34:29 GMT -5
You have only two options:
1. Sell something else you own with a built-in gain and offset the taxes due on that with the loss on MNKD. 2. Exit MNKD with a LT capital loss and offset $3,000 per year if don't have offsets.
If the company goes bankrupt there is no magic tax fairy that lets you write off the entire loss in that tax year; the $3,000 per year limit still applies on LT capital losses without an offsetting LT capital gain. You do get to recognize all your loss in that year, but you may not get the economic benefit till later (much later if you are deep in the hole).
|
|
|
Post by matt on Feb 1, 2017 17:46:47 GMT -5
Why even have this conference call at all we had a better chance of getting over a dollar if they stayed quite. Is Matt deliberately doing this? My read, for what it is worth . . . there are very exacting legal requirements for reverse splits that do not apply to most other shareholder votes. The company must get an absolute majority of yes votes from all outstanding shares. In most other cases it is just a majority of the votes cast that are required so shareholders that don't bother to vote don't affect the results. Here, shareholder non-votes are mathematically equivalent to a "no" vote. If you look at the proxy, there is the option to adjourn the meeting to find extra votes; this is common because brokers cannot vote on this issue and many shareholders simply fail to mail in the proxy.
By my math, in order to avoid the delisting on March 17, the company must complete the reverse split on or before March 3 in order to have 10 trading days above $1 by the deadline. Similarly, the notice to shareholders must go out 21 days in advance of the meeting for the vote to be valid under SEC rules. Why now? Because they absolutely couldn't wait any longer and still have a safety period to solicit additional votes. As it is they are skating on very thin ice. Had they waited any longer, the R/S to avoid delisting would not have been possible.
|
|