From AFFY's 1stQ 2013, AFFY has just $5.064M Net cash calculated as follows:
Cash and cash equivalents, plus Short-term investments, plus Long-term investments = $55.049M
Less: Total fixed contractual obligations of $49.985M = $5.064M net cash available for operation
I bet AFFY will use its $5.064M to pay its officers' termination compensation, its other employees what is owed on their termination, and to pay TBG and its lawyers for their services, including Chapter 11 proceedings. AFFY will have a difficult time surviving the next 2 - 3 months IMHO.
Now that AFFY is actively liquidating, it may be timely to revisit this. Be sure to comprehend the potential liabilities for the securities class action litigation, the shareholder derivative actions and products liability claims.
If I remember correctl greycorner had predicted April 15 as the BK date and y you had predicted June 15 date for BK, right? Where were you wrong? What made you change your decision to push back the BK date further in future?
Just for the record, I did not predict BK on April 15th, I predicted HALT. BK would not have surprised me. I personally think the stock should have been halted back then. The Musical Chairs game has been amusing though. I still believe the music will STOP when many are not mentally prepared. Who goes there?
I had guessed June 6, 2013 as the bankruptcy date. I kind of figured the cash burn rate to come by that date, but AFFY has reduced its cash burn to be sure. I also liked the fact that June 6th was D-Day. I think that AFFY can last possibly as long as October, 2013, but it could be sooner than that. I wish AFFY would disclose the amount of insurance it has for the litigations. It would be unwise to underestimate the liability for the securities class actions since it will be concentrated on AFFY. The products liabilities actions have yet to be filed, but they will be. The liability will be shared among the parties and will take a long time to resolve. Without employees available to defend the litigations, the best for Affymax is to declare Chapter 11 and have the litigation claims resolved as part of the bankruptcy.
Takeda will advance more $ from future royalties.....They already advanced 8.1 million. They will advance as much as necessary to keep Affy afoat during investigation. They do not want affy to go into bk.
Where are you gathering that information? The most recent 10Q has the following:
"As of March 31, 2013, we had $56.2 million in cash,cash equivalents, restricted cash and marketable securities. ...As of March 31, 2013 , we had total debt of $8.0 million..."
This is on page 32.
Take a look at page 37: Here, I made it easy for all.
Contractual Obligations Total 2013 Payments Due 2014-15 Payments Due
Operating lease obligations $ 6,444 $ 3,178 $ 3,266
Notes payable 9,099 2,829 6,270
Interest payments on notes payable 1,498 537 961
Manufacturing obligations 32,944 32,349 595
Total fixed contractual obligations $ 49,985 $ 38,893 $ 11,092
PS. AFFY discloses that its insurance coverage for litigation requires it to pay a retention (the retention payment amount is not disclosed), and that insurance coverage could be denied or inadequate. AFFY has not set aside any reserves for litigation.
PPS. AFFY has valued its assets as a going concern, and there is still a negative shareholder book value.
They have a drug and 500 million in NOL, for which a reasonable 300 million might be obtained in a buyout of price 10/share or more according to my reading of S382. That 300 million in NOL would be worth 100 million dollars to a company like takeda. I choose to believe that the 300 million in NOL trumps the few lawsuits and other costs that they have floating and makes it worth buying out AFFY for a price of 370 million.
Thus the calculation takeda faces is: is it worth 370 million to buy a drug that they might bring back and 300 million in NOL, making the net price of the drug 270 million.