DNIB Unwind Inc (OTCMKTS:BINDQ) is a bankruptcy liquidation vehicle for a formerly operating concern called Bind Therapeutics. Shares of the vehicle are trading at this point on the basis of a probabilistic function describing the potential for some type of distribution of cash gained from the asset sale process, which looks unlikely at present given recent filings. There will not be a restructured and emerging entity.
If you didn’t notice right off the bat, the name is a clear indication of the goal here. DNIB is simply BIND in reverse. And, if you’re thinking, “Hey, maybe DNIB is going to grow its way out of the BK!”, think again. The outcome here is already decided: the IP and assets associated with Bind Therapeutics will be digested by Pfizer following July approval of a $40 mln purchase approved by the bankruptcy court to great applause by all involved.
DNIB Unwind Inc (OTCMKTS:BINDQ) engaged in the development of novel targeted therapeutics primarily for the treatment of cancer in the United States and Russia.
The company was formerly known as BIND Therapeutics, Inc. and changed its name to DNIB Unwind, Inc. in August 2016. DNIB Unwind, Inc. was founded in 2006 and is based in Cambridge, Massachusetts. On May 1, 2016, BIND Therapeutics, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. DNIB Unwind, Inc. is in liquidation.
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Pfizer Inc. won bankruptcy-court approval in July, as noted above. The Company will pick up all the assets of Bind Therapeutics for a final price of $40 million. The deal was initially proposed at just under $20 million, but an auction process pushed the total to twice that figure.
“To call this a success would be an understatement,” said Judge Brendan Shannon of the U.S. Bankruptcy Court in reaction to the deal.
We would say: Tell that to early stage investors in Bind. It is now clear that the assets and IP had significant value. It should also be equally clear that operational execution was a mess of failures here. At least something will come of the investment down the line as Pfizer advances on any breakthroughs achieved by Bind on the back of their investors and hopefully produces a deliverable for the world at large.
In any case, according to a plan of liquidation filed with the bankruptcy court in August, if you owned shares of BINDQ as of August 30, you would be entitled to receive a distribution of cash generated from the liquidation process, which was believed to be about $22.5 million minus other liabilities inherent in the settling of all operational priority claims in the Company, divided evenly among shareholders of record as of the record date.
However, on September 14, the Company appears to have amended that plan and replaced it with a plan to cancel all shares with no distribution. Shareholders should have been prepared for this, as a note in the mid-August filing states, “The Company is unable to predict whether any cash distributions will occur in addition to the Initial Distribution, or the amount of any additional cash distribution that stockholders may receive.”
Naturally, on August 31, the stock lost the majority of its remaining value. We are still seeing some ticks in the stock as the odds of something changing from here are not 0%.
But, most importantly, the message here for traders looking at BINDQ is this: This is not a good holding for your account over any time frame at this point without extreme due diligence and acumen, along with prior experience in arbitraging the end game of liquidation processes. Traders should be cognizant of the likelihood of inevitable depreciation to a price tag of $0/share. That said, for those up to the challenge, the bankruptcy court is ruling on recent amendments and the stock is holding onto some ticks here for a reason. Any slight change in expectations, though very unlikely, could conceivably produce a massive sudden jump in price. For continuing coverage on BINDQ and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!