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What happened

Shares of MannKind Corp. (MNKD 0.72%), a struggling diabetes care company, fell 15.7% in October, according to data from S&P Global Market Intelligence. Waiting eight days to inform shareholders it received a warning letter from the Nasdaq exchange didn't sit well with the market.

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So what 

On Sept. 22, MannKind Corp. announced that it had received a warning letter from Nasdaq on Sept. 14. The troubled company's stock price had closed below the $1-per-share minimum required by the exchange's listing rules for 30 consecutive days. 

MannKind stock's noncompliance with the minimum requirement was hardly a surprise, but dragging its feet before announcing the notice is troubling. The exchange requires companies to notify shareholders of these types of notices within four business days after receiving them. MannKind acknowledged that it informed Nasdaq it failed to meet this requirement on day five, and then filed the announcement with the U.S. Securities and Exchange Commission on day six.

Without any explanation for the delay, many assumed the company was waiting for some encouraging signs from its last-ditch effort to relaunch inhalable insulin device Afrezza, but had none to offer.

Now what

MannKind's stock price needs to close above the $1 minimum for at least 10 consecutive days during the 180-day period that began the day it received the notice, or it could face delisting from the Nasdaq exchange. MannKind shares also trade on the Tel Aviv exchange, but a Nasdaq delisting would still make raising enough equity to fund its operations nearly impossible. The company burned through $29.96 million during the three months ended June, finishing the quarter with just $63.7 million in cash and equivalents.

MannKind could meet the minimum price with a reverse stock split, but that would hardly solve all its problems. If this company is to remain solvent, Afrezza needs to start flying off pharmacy shelves immediately. It finished June with liabilities to be repaid within one year of $289.7 million, against assets available to meet those obligations of just $90.8 million. Additional red flags on the company's balance sheet will make climbing out of this hole especially difficult.