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Affymax, Inc. Message Board

  • ican_dudat ican_dudat Dec 13, 2013 9:06 AM Flag

    How can a company go BK if it doesnt have debts?


    BK court is where creditors force a company to liquidate assets to satisfy debts. So what happens
    if a company that has no debts simply runs out of cash? Depends on what it was using that cash for. This company is now basically a wrapper around the intellectual property of Omonty's. Until a decision is made on Omonty's the company doesn't need any cash for anything related to production, sales, customer support, or anything else. Its just a wrapper for now, an I.P. shell. As long as the company doesn't owe anyone money I don't see why a BK would ever be on the table. I'm not a corporate finance guy so opinions of those more knowledgeable in these matters is welcomed.

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    • What an ignorant post.

    • Our liabilities exceed our assets. While we continue to reduce cash outflows, there is no assurance that we have sufficient resources remaining to meet existing and future obligations in a timely manner. If Takeda is unable to reintroduce the product or we are unable to obtain additional funding in the near future, our cash resources will rapidly be depleted and we will be required to further reduce or suspend operations, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to liquidate our assets, seek bankruptcy protection or other alternatives, and it is likely that investors will lose all or some of their investment in us. Any failure to dispel any continuing doubts about our ability to continue as a going concern make it more difficult to obtain required financing on favorable terms or at all, negatively affect the market price of our common stock and could otherwise have a material adverse effect on our business, financial condition and results of operations.

      If Takeda is unable to rapidly identify and rectify the causes of the safety concerns to the satisfaction of the FDA, which is highly uncertain, OMONTYS may be permanently withdrawn from the market. As a result, we may be unable to continue our operations. In order to reintroduce OMONTYS, Takeda would have to complete their ongoing thorough investigation, identify the causes of the safety concerns and provide a suitable plan to the FDA for approval. Accordingly, there can be no assurance that Takeda can address the safety concerns and meet the requirements of the FDA for reintroduction. Moreover, even if OMONTYS could be reintroduced, the commercial prospects for this product may be permanently diminished and the product may no longer be commercially viable.

      If Takeda is unable to identify quickly the causes of the OMONTYS safety concerns or raise additional funds when required or on acceptable terms, we may have to:

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