MannKind Restructures $79.7 Million Debt Obligation to the Mann Group and Reduces Principal Owed to Deerfield by $6.3 Million...
March 12 2018 - 8:08AM
MannKind Corporation (NASDAQ:MNKD) today announced
the restructuring of certain of its outstanding debt obligations,
reducing outstanding principal by an aggregate of $14.5 million
along with the corresponding interest expense.
- Cancelation of approximately $8.2 million in principal under
the promissory note with the Mann Group with its purchase of
3,000,000 shares of common stock at the closing price on March 9,
2018 of $2.72 per share. These shares were issued in a
private placement and there is no obligation or intent by the
Company to register these shares for resale.
- Maturity date of the remaining principal of approximately $71.5
million under the amended and restated promissory note with the
Mann Group extended 18 months to July 1, 2021, with principal and
any accrued and unpaid interest permitted to be converted into
common stock, at the option of the Mann Group, at a conversion
price of $4.00 per share.
- Exchanged $5.0 million in principal due May 2018 under the
Deerfield facility for 1,838,236 shares of common stock equal to
the closing price on March 9, 2018 of $2.72 per share.
- Exchanged approximately $1.3 million in principal due May 2018
under the Deerfield facility for 441,618 shares of common
stock
MannKind’s Chief Financial Officer, Steven B.
Binder commented, “These transactions further progress our efforts
in recapitalizing and restructuring our balance sheet allowing us
to focus on investing in the sustained growth of Afrezza.”
Amended and Restated Promissory Note
between MannKind Corporation and The Mann Group LLC, dated March
11, 2018
On March 11, 2018, the Company entered into an
amended and restated promissory note (the “Restated Note”) with the
Mann Group LLC. The Restated Note amended the terms of the
existing promissory note, dated as of October 18, 2012, with the
Mann Group to, among other things, (i) reflect the current
outstanding principal balance of the promissory note of
$71,505,500, after giving effect to the partial cancelation of
principal in exchange for shares of the Company’s common stock
described below, (ii) extend the maturity date of the promissory
note to July 1, 2021, (iii) permit accrued and unpaid interest to
be paid-in-kind, and (iv) permit the principal and any accrued and
unpaid interest under the Restated Note to be converted, at the
option of the Mann Group, at any time on or prior to the close of
business on the business day immediately preceding the stated
maturity date, into shares of the Company’s common stock at a
conversion rate of 250 shares per $1,000 of principal and/or
accrued and unpaid interest, which is equal to a conversion price
of $4.00 per share. The conversion rate will be subject to
adjustment under certain circumstances described in the Restated
Note.
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 Company’s common
stock at a price per share of $2.72, the closing price on March 9,
2018 on the Nasdaq Global Market. 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.
Exchange Agreement with
Deerfield
On March 12, 2018, MannKind entered into an
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 Company’s common
stock (the “Exchange Shares”). The exchange price for the Exchange
Shares is $2.72 per share, the closing price on March 9, 2018 on
the Nasdaq Global Market. 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.
Update Regarding Exchange and Sixth
Amendment Agreement with Deerfield
On March 6, 2018, pursuant to the previously
announced exchange and sixth amendment agreement with Deerfield,
the Company exchanged $1.25 million in principal amount of its
outstanding 9.75% Senior Convertible Notes due 2019 held by
Deerfield for 441,618 shares of the Company’s common stock, at a
conversion price of $2.83 per share.
After giving effect to the exchange transactions
described above, the Company’s current amount of principal owed to
Deerfield is $45.0 million.
ABOUT MANNKIND
CORPORATIONMannKind Corporation (NASDAQ:MNKD) focuses on
the development and commercialization of inhaled therapeutic
products for patients with diseases such as diabetes and pulmonary
arterial hypertension. MannKind is currently commercializing
Afrezza® (insulin human) inhalation powder, the Company's first
FDA-approved product and the only inhaled rapid-acting mealtime
insulin in the United States, where it is available by prescription
from pharmacies nationwide. MannKind is headquartered in Westlake
Village, California, and has a state-of-the art manufacturing
facility in Danbury, Connecticut. The Company also employs field
sales and medical representatives across the U.S. For further
information, visit www.mannkindcorp.com.
FORWARD-LOOKING STATEMENTSThis
press release contains forward-looking statements that involve
risks and uncertainties, including statements regarding the
completion of the debt and exchange transactions and expectations
regarding MannKind’s ability to execute its near-term business
plan. Words such as "believes", "anticipates", "plans",
"expects", "intend", "will", "goal", "potential" and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are based upon MannKind's current
expectations. Actual results and the timing of events could
differ materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which
include risks associated with MannKind’s ability to satisfy closing
conditions, whether MannKind’s cash resources will be sufficient to
operate its business and satisfy its debt repayment obligations and
the risks detailed in MannKind's filings with the Securities and
Exchange Commission, including the Annual Report on Form 10-K for
the year ended December 31, 2017 and subsequent periodic reports on
Form 10-Q and current reports on Form 8-K. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All
forward-looking statements are qualified in their entirety by this
cautionary statement, and MannKind undertakes no obligation to
revise or update any forward-looking statements to reflect events
or circumstances after the date of this press release.
Company Contact:Rose
AlinayaSVP, Investor
Relations818-661-5000ir@mannkindcorp.com
MannKind (NASDAQ:MNKD)
Historical Stock Chart
From Mar 2024 to Apr 2024
MannKind (NASDAQ:MNKD)
Historical Stock Chart
From Apr 2023 to Apr 2024