Item 3.02
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Unregistered Sales of Equity Securities.
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The information set forth under Item 1.01 of this report
regarding the issuance of the Restated Note is incorporated by reference into this Item 3.02. Also on March 11, 2018, the Company and the Mann Group entered into a common stock purchase agreement pursuant to which the Company agreed to issue to
the Mann Group and the Mann Group agreed to purchase 3,000,000 shares of the Companys common stock at a price per share of $2.72 (the Purchased Shares). As payment of the purchase price for the shares, the Mann Group agreed to
cancel $8,160,000 in principal amount under the promissory note dated October 18, 2012, with the principal repayment to be reflected in the Restated Note.
The Company offered the Restated Note and the Purchased Shares in reliance on the exemption from registration provided by
Section 4(a)(2) of the
Securities Act of 1933, as amended (the Securities Act), and expects to rely on such exemption or the exemption provided by Section 3(a)(9) of the Securities Act for any issuance of shares of its common stock upon conversion of the
Restated Note. The Purchased Shares were issued in a private placement and the Company does not have an obligation or intend to register the Purchased Shares for resale.
On March 12, 2018, the Company and MannKind LLC, the Companys wholly-owned subsidiary, entered into an Exchange Agreement (the Exchange
Agreement) with Deerfield Private Design Fund II, L.P. and Deerfield Private Design International II, L.P. (collectively, Deerfield) pursuant to which the Company agreed to, among other things, exchange $5.0 million principal
amount under the 8.75% Senior Secured Convertible Notes due 2019 held by Deerfield (the Tranche B Notes) for 1,838,236 shares of the Companys common stock (the Exchange Shares). The exchange price for the Exchange
Shares is $2.72 per share. The principal amount being exchanged under the Tranche B Notes represents the principal amount that would have otherwise become due and payable in May 2018 under the Tranche B Notes.
The Company offered the Exchange Shares in reliance on the exemption from registration provided by Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933.
On March 6, 2018, pursuant to the prior exchange and sixth amendment agreement with Deerfield, the Company exchanged approximately $1.3 million in
principal amount of its outstanding 9.75% Senior Convertible Notes due 2019 held by Deerfield for 441,618 shares of the Companys common stock, at a conversion price of $2.83 per share.
After giving effect to the exchange transactions described above, the Companys current amount of principal owed to Deerfield is $45.0 million.
The foregoing descriptions of the Restated Note and the Exchange Agreement do not purport to be complete and are qualified in their entirety by reference to
the Restated Note and the Exchange Agreement, copies of which is attached as Exhibits 99.1 and 99.2 to this report, respectively.
This report does not
constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.