MannKind Corporation (NASDAQ:MNKD) stock has been outside of compliance required for continued NASDAQ listing and it has time till mid-March to get it back. Exchange listing is commonly considered critical in generating capital and being listed in an index.
There are some market participants that consider Nasdaq listing to be not a very big concern for MannKind. However, there is a purpose that any firm needs to be listed on the bigger exchanges. The fundamental and basic reason is that firms on the main exchanges are termed as firms that fulfill certain criteria on a reporting and financial concerns. MannKind finds itself in a scenario that many upstart firms find themselves in.
The company has a product it considers to be productive, but lacks the funds to effectively offer that product. What company needs to do is ensure shareholders that financing the re-launch of Afrezza carries the prospect for future rewards.
MannKind has adequate funds left to fund existing businesses for nearly seven more months. The firm has a credit line that can fund an additional quarter. Lastly, the firm has an ATM facility that enables it to sell equity to qualified institutions in attempt to raise needed funds. A critical warning in this mix is that current debt covenants essential MannKind to have cash of $25 million, or in its credit facility at the close of any quarter.
Fundamentally, absent a deal of some type or a sale of assets, the company is on the verge of having to go to the market to get much required cash. It is one factor to approach an investment bank when a firm’s stock is listed on NASDAQ exchange while it is entirely a different scenario when the firm is listed on OTC marketplace.
Being non-compliant with NASDAQ guidelines is never a good option to be. Being forced to perform a reverse split is not witnessed as an encouraging thing, and it does nothing to modify the underlying concerns that have the equity in trouble.