Bankrupt and Distressed (BAD) Research and Due Diligence

[ankitgu]

Middlebrook Pharma.

Jaxstraw - thank you for posting this.

Filings: http://www.kccllc.net/MiddleBrook
Website: http://www.middlebrookpharma.com/
SEC Filings: http://www.sec.gov/cgi-bin/browse-edgar?company=&match=&CIK=MBRK&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany

12 cents/share after hours on Friday
86M shares outstanding
Implied 10.32M market cap based on 12 cents/share

At first glance, these guys are burning 10-20M every quarter: http://finance.yahoo.com/q/bs?s=MBRK

Value for commons? (Expect some speculation here, this is preliminary research!)
Maybe... profit margins have fluctuated between 54% and 91%, with the better margins coming from quarters with higher revenue. Maybe they have manufacturing contracted out and they have to meet certain minimums? Moxatag and Keflex are produced and in use. I personally used Moxatag last fall when I was sick and so I believe this is a real company. Going back to the financials (I/S primarily) - they're spending tons of money on SG&A for some reason. R&D is separate and so I'm assuming (for now) that SG&A really is SG&A, in which case you have to wonder why they're spending so much on selling efforts, and if employees weren't meeting quota, why didn't management stop this bleeding sooner or remove staff that was underperforming?

I believe there will be a value for their intellectual property and I think establishing that is going to be helpful in understanding the valuation here.

It seems like I'm going to have to start learning about valuing pharmaceutical intellectual property now.