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Teligent, Inc. (TLGT) stock has fallen to 5.36% in the premarket – What’s happening?

Teligent, Inc. (TLGT) has experienced a decline of 5.36% in the premarket after the company announced to Pursue Asset Sale through Voluntary Chapter 11 Process. However, the last trading session closed at $0.2014 with a decrease of 39.56%.


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Asset Sale through Voluntary Chapter 11 Process

On 14th August 2021, TLGT stated that the Company, together with a number of its affiliates, has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. This is done to pursue a sale process that will maximize the Company’s value.

Prior to the Chapter 11 filing, the Company initiated a marketing campaign to gauge market interest and is now in talks with a number of potential buyers. By early 2022, the Company anticipates selling the entire firm or its key assets. Teligent Canada, Teligent’s Canadian subsidiary, will pursue an out-of-court sale in the meantime.

Second Quarter 2021 Financial Report

TLGT announced the second-quarter 2021 financial report on 16th August 2021. The total revenues were $10.4 million, compared to $13.6 million in the prior period in 2020. Lost contract volume as a result of remediation operations, the ongoing consequences of the COVID-19 pandemic, and minor product price erosion owing to generic competition all contributed to the drop.

Moreover, the cost of revenues rose $2.1 million to $13.1 million in the Current Period, compared to $11.1 million in the Prior Period. This owed to higher inventory reserves, ongoing restoration and period expenditures, and reduced absorption. The Current Period’s selling, general, and administrative costs grew from the Prior Period’s $5.0 million to $5.7 million. Higher professional fees as a result of our debt restructuring accounted for the majority of the increase, which was partially mitigated by lower personnel-related costs. Lastly, the product development and research costs were $2.2 million, compared to $1.9 million in the Prior Period. The rise was largely due to API-related expenditures, which were somewhat mitigated by lower personnel, outside testing, and pilot batch costs.

First Quarter 2021 Financial Results

TLGT reported first-quarter 2021 financial results on 25th May 2021. The first quarter of 2021 brought in $11.6 million in consolidated net revenues, compared to $7.4 million in the first quarter of 2020. Orders from private label customers, wholesale restocking, and fewer Canadian supply limitations all contributed to the $4.1 million raise. Moreover, the cost of revenues grew by $4.2 million to $12.8 million, up from $8.6 million in the previous quarter. Also, selling, general, and administrative costs were $6.3 million, down $0.4 million from $6.7 million in the first quarter of 2020. The drop was largely due to decreased professional costs.

In addition, the product development and research costs were $1.5 million, compared to $1.8 million in the first quarter of 2020. The drop was largely due to lower staff costs, outside testing, and pilot batch expenditures, which were somewhat offset by a $0.1 million rise in API costs and an increase in clinical trials. The first quarter of 2021 saw a $2.2 million net profit, compared to a $26.8 million net loss in the first quarter of 2020. The rise in earnings was largely attributable to a $22.4 million gain on debt restructuring, which was partially offset by higher operational and interest expenditures, as well as other debt restructuring charges.

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