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Agree. EOM
I know this is a LONG, LONG reach but...
Is it completely inconceivable that the Chapter 7 could be reversed? That is, when assets (aka patents) are offered for sale, if the amount offered...assuming there would be multiple bidders...would be at a high enough price to more than exceed the value of the total debt. In other words, a deal that no one is interested in offering right now to the company, but one that might be flushed out if/when the patents actually HAVE to be sold. It is conceivable perhaps that a company who is/was unwilling to take on the PR "stink" that has surrounded this company, may be more likely to do so if they know for sure that one of their competitors may get the patents. If the current debt holders are playing hardball, then maybe RCPI management feels that this is their only option. And Chapter 7 gives a potential acquirer of the patents some PR cover.
Still doubt this helps common shareholders, but thought I would throw it out there. If there is actually substantial worth in the patents, then I would also think the principles involved in the current company would be scared about suits, etc. by common shareholders that would have a nice case for their total mismanagement of the company up to this point.
"Scares me" that someone is still buying...even if 1Million shares costs only $2500. Could it be the final slap in the face to longterm shareholders who sell that the company actually pulls out of BK based on value of patents? (i.e. patent value enough to cover repayment). Again, chances may be between slim and none, but someone is still buying....
like I said before, he gets to go back to being a scientist and claiming to have "fought the good fight". And for all we know, he may come out smelling like a rose as he was able to advance his research on our dime.
Well, do you figure Mullan simply moves his desk over to the other side of the room (with a view) at Roskamp?! (er...Archer)
To me, part of what has always been unsettling about this from get go.
Chapter 7 vs. 11:
"The main difference between Chapter 7 and Chapter 11 bankruptcy is that under a Chapter 7 bankruptcy filing, the debtor's assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate (sell off) assets."
Thanks Mullan and TJ...nice job the past 3 years.
Good question...I would think most probably NOT. Would be interested in seeing perhaps a bankruptcy lawyer weigh in.
As it goes higher I would like to see a split. Alot of arguments that it makes no difference but I think psychology plays into it...and would allow the stock further appreciation vs. otherwise.
All of these comments are well plowed ground of the past several years. The only thing that matters now is whether they will go bankrupt or survive with enough $ to advance to more testing. It's been real quiet the past few weeks...I suspect that either a miraculous white knight is in the works or all principals are working to negotiate their best escape while leaving common shareholders holding the bag.
Agree.
No quote from IDCC in PR?...I guess no big deal...but Qualcomm and Ericsson had quotes in PR...and ZTE had "supporting quote" that was not in body of PR. Just an observation.
Mine, don't sell yourself short. My guess is that they have been so thin-staffed and budget strapped that they have been limited to what they have been able to do. And frankly, some of it is likely beyond their areas of expertise. My guess is that much of their time has been spent simply plugging holes.
yes, I have been long aware of Nivaldipine and Mullan involvement there. Haven't kept up with the timeline and certainly hope your forecasts of pending announcements come to fruition. That said, it is very mysterious to me that he maintains this interest and is also supposed to be our full time CEO. If he has so much pending positives with Nivaldipine, why has he allowed RCPI to teeter on the ledge of bankruptcy?...assuming that there are some synergies between the two. I am not really interested in his advancing Nivaldipine on "our dime" (as investors) if there is in fact some benefits that he has been able to get through the testing with Anatabine. Unless, there is a new strategy that they can make us investors aware of....
Mine, hope you are correct. Again, I am venting to some extent...but I also look at the fact that the current management allowed the shares to be diluted 15 plus times over...and we are trading at less than a penny...so is that what was really required at the time to save the company from bankruptcy...and the only path? Maybe we bought ourselves a few months of non-bankruptcy...but what exactly has changed for the positive in the time period since? Again, hope they find funding from some other source...but also wonder if they are able to do so why it could not have been done sooner.
I believe the answer to that is NO....or that's what I was told by RCPI
Worth checking into who gets what in the event of bankruptcy...the various flavors...that may dictate what will actually happens here. How much do creditors lose?...if RCPI forced to sell patents as part of bankruptcy...who gets proceeds and who wants those patents?
Does anything remain for common shareholders?
Ted can get another job on Wall Street (and say he fought the "good fight")...Mullan can go back to being a full time scientist.
Well, I would say that TJenkins likely thinks most common shareholders are naive boobs who have little appreciation for the hurdles required to make a bio startup successful. In part, he may be correct. That said, he and management have had several years and it certainly seems that there has been nothing but disappointment after disappointment. What I want to hear about is serious progress and vision (and the ability to raise $ other than via Frankie's pawn shop)...not just a profanity laced diatribe on the history of the company and all of the things that they have had to overcome!...that story is very, very long in the tooth. Either they have something or they don't. And failure to date suggests that they either don't or current management is just not able to get the job done from a business perspective. My guess is TJ is a good guy who is in way over his head...and perhaps Mullan also from a business perspective. Yes, they have loyalty to each other...but I truely wonder about their loyalty to look out for the interest of shareholders (aka "boobs").
It's definitely survive or die time. My guess is that if they do survive it will be with enough to at least get through next phases of testing through 2017. Otherwise, I am guessing they merely say, OK, we are ready to declare bankruptcy. Another big question is: are these "leaders" the ones who should be running this company moving forward? Hopefully, they are "big enough" to understand that new leadership on the business side, at least, is required.
Hope you are right. My experience is that people (especially when lawyers involved) typically do "dig their heels in". That said, I would also think that hedge funds would be looking to not bring extra scrutiny as to their practices....
Forgetting about the "we are going bankrupt" and "Ted/MM negotiated a terrible deal with noteholders" comments (which seem perhaps obvious)...where do we really stand now?
Hudson appears to be collecting the "collateral"...to the tune of about $3Million. Without looking back at agreement, assume this will be collected in shares. Assuming 1 cent/share, ~ 300Million additional shares. No wonder they are/were anxious to get news of the default on paper.
Tenor on the other hand just wants their $...and they want it by Wednesday.
Assume this in essence gets Hudson past its restriction of only holding some ~ 9 Million shares.
RCPI not agreeing or disagreeing because its all got to be agreed to in writing/in court or otherwise negotiated.
Is there a longshot alternate source that is going to bail RCPI out now?...doubtful probably...but if they do, it will be at very high cost in terms of what they want and what accrues to current noteholders. Then again, noteholders (at least Hudson) needs the company to survive to collect on its collateral?
Would be happy to have someone educate/correct me....
What's next from RCPI?
Contest the noteholders in court? Is there a "white knight" to come through with money NOW and new financing arrangement?
Is this just a play by the noteholders to get all the IP on the cheap via bankruptcy...
Actually, yes...I did. As I already mentioned, the most likely outcome has been bankruptcy for quite a long time. But that's not to say it is a sure thing...that's why much higher risk stocks are tempting. But you shouting bankruptcy over the months/years has never been too compelling an argument for me personally with respect to my decisions to invest or not invest.
Ed...you are not exactly a savant!...and never have been as far as I can tell. The easiest and perhaps safest prediction for this company has always been eventual bankruptcy. And that makes it like many bio startups. Still, of course, a longshot...but not over for common shareholders until fat lady sings. If that happens, wouldn't mind her sitting on you after she's done so!
Today's 8K contents:
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
On August 24, 2016, Rock Creek Pharmaceuticals, Inc. (the “Company”) received an Event of Default Redemption Notice from Hudson Bay Master Fund Ltd., a Note holder in the Company’s October 2015 private placement of $20 million in principal amount of Senior Secured Convertible Notes (the “Notes”). Also on August 24, 2016, the Company received an Event of Default Notice from Tenor Capital Management, on behalf of Alto Opportunity Master Fund, SPC, also a Note holder of the Notes.
The notice received from Hudson Bay stated that pursuant to Section 14(o)(4) of the Note, the Holder may withdraw all or any part of the Collateral in the Holder Master Restricted Account upon the occurrence of any event which could reasonably be expected to result in a Cash Payment Obligation. Hudson Bay withdrew $6,664,188.87 from its Holder Master Restricted Account, leaving a balance of $200,000 in the account. Further, the notice constituted an Event of Default Redemption Notice in accordance with terms of Section 5(b) of the Note. Among other things, the notice claimed the Company failed to comply with Section 14(q)(i) of the Note and therefore, an Event of Default had occurred as set forth in Section 4(a)(xvi) of the Note.
Hudson elected to redeem $3,835,972.13 of the Conversion Amount outstanding under the Note at the Event of Default Redemption Price of $6,664,188.87 and to apply the Collateral withdrawn in satisfaction in full of the Cash Payment Obligation. After giving effect to the redemption and based on Hudson Bay’s calculation of the Event of Default Redemption Price, Hudson Bay claims it retains a Note with an outstanding Principal amount equal to $6,996,8709.16.
The notice from Tenor alleged an Event of Default under Section 4(a)(iv)(B) of the Note indicating that the Company would not be able to comply with conversion requests. The notice further alleged that the Company was not in compliance with financial covenants in Section 14(a) of the Note, which constituted an Event of Default. Tenor exercised its rights pursuant to Section 4(b) of the Note to require the entire outstanding principal amount and other amounts outstanding under the Note to accelerate and to become due and payable. Tenor has demanded payment of $7,322,815.24, which they claim are all amounts outstanding and payable under the Note. As partial payment, Tenor has withdrawn the entire balance of $3,517,255.56 from the Tenor Master Restricted Account and has demanded the balance remaining of $3,805,559.68 to be paid in cash no later than August 31, 2016.
Prior to receiving the default notices, the Company had, at the request of the lenders, sought and obtained approval from its stockholders to do a reverse split. Also, as previously disclosed, the Company has been seeking additional funding from other sources. The Company was in discussions with the Note holders regarding these matters when they issued the notices. Through the date of the notice, the Company had received $5,275,000 in cash proceeds from the Note and the total amount being demanded by the Note holders, after sweeping the cash from the Restricted Accounts is $10,802,429.84. The Company has neither agreed to nor denied the allegations in the notice or the calculations of the alleged balances due to the Note holders. As of the date of the notices, the Company had approximately $35,000 in its unrestricted cash accounts. The Company is actively exploring all options for treatment of its debt and funding its operating needs, including, but not limited to, initiation of proceedings under laws relating to bankruptcy or insolvency.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ROCK CREEK PHARMACEUTICALS, INC.
Date: August 29, 2016
By: /s/ William L. McMahon
Name:
William L. McMahon
Title: Chief Financial Officer
More interesting is Noteholders have called in their chips. See today's 8K. Looks like on in particular has given RCPI until Aug 31 to produce $ to them.
Good sign...I hope that no reverse split announced yet and no volume trading. Perhaps, and I hope so, that company is waiting on announcement of "more appropriate funding" announcement to coincide with reverse split announcement.
Well...I don't pretend to understand the mechanics of it all. My fear though is that us "good guys" hold common shares. I suppose the hedge funds/bad guys hold common shares. That puts us good guys in the same position as the bad guys in terms of needing to see our investment rise via common share price appreciation. Unless a way can be configured to get the "bad guys" to give up their ill-gotten gains, it's hard to see how we get well without alot of selling as it goes up...knowing the bad guys control a WHOLE lot of outstanding shares.
OK...but who is holding all of the ~ 170M shares?...is there no one with 5% stake?...or is there some collusion among some subset of shareholders who are just under 5% (my understanding being that 5% plus shareholders must report as such).
Agree with you here. No news for now may be good news at least in the sense that noteholders are actually working with company. Question is, how much will noteholders get out of whatever new source of financing is found...or have they already GOTTEN ENOUGH?
Bummer. No one at stockholder meeting who wanted to ask questions? Wish I had been able to attend. MM went through fairly standard presentation of history and value prop.
Any nuggets of new information that I heard (at least new to me):
He still showed timeline of UV New Zealand study of being Q3...funding allowing. Said it was only a 2 day study. Would seem that this could produce potential results that would be reportable and potentially of some value for PR. Other mention by Mullan that Abine may have applicability to long term sun damaged skin. Not sure I had heard this before...but would open up REALLY big market as well.
Of course, all voted on initiatives were approved.
From this morning's corporate update:
"Preparations for the Company's Phase IB psoriasis trial continue, although until more appropriate funding is secured, initiation of this study is likely to be postponed from Q4 2016 to early 1H 2017."
Disappointing...would seem to indicate that alternative funding is not happening in the very near term...and/or whatever "preparations" they have been doing are at least constrained by $ availability and/or they have run into other unanticipated things in their prep. But oh well, will continue to hang in.
yep...didn't expect it to. Sounds like they are potentially on the hook for 542K court judgement...although appears they are trying to get insurer to cover it. As was the case weeks ago, they need some alternate financing...or the show will be over....or further heavily diluted...and then over.
I don't believe in demonizing Dr. Mullan. I believe his heart/intent is in the right place. Those who only reference personal financial gain as his primary motivation are either short-sited or have an agenda IMO. That said, up to this point, Mullan and company have failed in securing funding at a reasonable rate to move forward. I don't know whether this is due to leadership limitations, agenda of big pharma, lack of patent protection for IP, lack of path to success...or a combination of all. Like others, I am frustrated that this leadership team has had 3 years to produce and we are still in this situation. Hope it changes for the positive!
Because the $ they are receiving are not sufficient to do anything other than pay salaries, obligations and keep the lights on.
From what I understand...all is on hold.
I agree with you that the 2 cent floor also applies (proportionally to reverse split - aka $2 floor if 200:1 reverse split). But how long does the floor remain in place?...I thought only until Aug 12?
Nice Find! Encouraging. EOM.
Seek, good post. Agree. EOM
Reluctantly, I agree. Further hamstringing management by voting "No" on reverse split likely does no good and might even cause harm. Believe we are stuck come good or bad...and hopefully it will one day be good.
Lots and lots of biopharm do not have revenue nor revenue in near term. It's about potential and progress not necessarily near term revenue. RCPI has some significant advantages (and disadvantages) based on past successes (and failures mostly not having to do with its compound).
You are correct on the financing...as of now. That said, if (and as I have stated previously, it's a BIG IF) they come up with alternative financing and/or partnership, your shorting strategy could blow up in your face. You also assume that bondholders will necessarily sell right away...they may in fact hold for considerable period of time. Some may actually believe in the potential of the company/product long term which would make them far more $ in the longer run if company is successful.
Yes, they have to get $ in order to continue...hope they can find another way. Otherwise, your posts are re-hashing the obvious.