MOR - September - Ugly Picture
This company continues to destroy value for equity. According to September's MOR, the company burned $1.3 mm in cash during the month versus a forecast of $760k. That's $540k more than anticipated, or a 71% negative variance. MBRK lacks leadership capable of winding up this mess without squandering the company's extremely limited cash resources. Even with a Management Incentive Plan providing a $750k bonus if equity gets $7.5 mm in distributions, the company is unable to execute on the simplest of tasks, which is to minimize spending cash at a company with $0 revenues and a single digit employee count!
The current share price of $0.08 implies an equity distribution of approx. $7 mm. Good luck buying there when the Par claim won't be settled by arbitration until February 2011 at the earliest. At the current rate of monthly cash burn of $1.3 from October until February, or 5 months, the estate would be left with $6.5 mm before paying post-petition and pre-petition obligations. At the end of September, those liabilities stood at $1.2 mm and $5.8 mm, respectively, not including Par's $3.5 mm claim. Even without a payout to Par, payments to claimholders would total $7.0 mm ($1.2 mm + $5.8mm), leaving equity with $0.
This is not a pretty picture for equity.
AI
