Here is how I see the financials for the near future.
12/31/2012 Cash
61,000,000
Mann LOC
120,000,000
Proceeds from 46,000,000 3rd party Oct. 15, 2013 warrants exercised
89,700,000
Proceeds from 40,000,000 of Mann's Oct. 15, 2013 warrants exercised
78,000,000
Reduction in LOC from Mann's warrant exercise
-78,000,000
12/15/2013 Convertible matures
-115,000,000
Total cash available for 2013
155,700,000
Cash required in 2013 assuming an $11,000,000 burn rate
-132,000,000
Cash surplus on 12/31/2013
23,700,000
The note payable to Mann matures on 1/1/2014
350,000,000
I suspect that if there is no alternative financing at this time, Mann will be forced -- as he has done several times in the past -- to extend the maturity.
Russell, You are correct that the warrants will not be exercised before maturity. It is never economic to exercise calls on non-dividend paying stock. Even if the calls are deep in the money (and you assume that there is no time value), there is no advantage to paying for shares before you have to; this would incur an additional cost equivalent to interest on the strike price for the period from early exercise up to the expiration date.
All of the Oct 2013 warrants give the holder the right to buy 0.75 shares for 2.60 per share.
So, my take is that there probably are no financial concerns in 2013, but something has to happen by 1/1/2014. Either a partner agreement, a sale of the company, or Mann extends his LOC.
The only way they can retire the LOC is if they get cash from some other source, so maybe this is hinting at a partnership.
Good data in August will remove most of the concerns and should ease the financial concerns by putting them in a good position to negotiate a partnership or a sale.
There was an interesting thread on the yahoo message board on the likelihood of a buyout. Maybe this is what is planned.
http://finance.yahoo.com/mbview/threadview/?&bn=0243242e-59fb-3abc-8d27-962c7bf26a1d&tid=1360682619874-d5547a50-18d5-4a93-a4be-f5c34c88c360&tls=la%2Cd%2C7
