MannKind Corporation (NASDAQ:MNKD) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

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MannKind Corporation (NASDAQ:MNKD) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

MannKind Corporation (NASDAQ:MNKD) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03

(a)

The information contained in Item 8.01 of this report under the heading “Paycheck Protection Program Loan” is incorporated by reference under this Item 2.03.

Item 8.01 Other Events.

Paycheck Protection Program Loan

On April 10, 2020, MannKind Corporation (the “Company”) received the proceeds from a loan in the amount of approximately $4.9 million (the “PPP Loan”) from JPMorgan Chase Bank, N.A., as lender, to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan matures on April 9, 2022 and bears interest at a rate of 0.98% per annum. Commencing November 9, 2020, the Company is required to pay the lender equal monthly payments of principal and interest as required to fully amortize by April 9, 2022 the principal amount outstanding on the PPP Loan as of October 9, 2020. The PPP Loan is evidenced by a promissory note dated April 9, 2020 (the “Note”), which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The PPP Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

All or a portion of the PPP Loan may be forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. In the event the PPP Loan, or any portion thereof, is forgiven to the PPP, the amount forgiven is applied to outstanding principal.

The Company intends to use all proceeds from the PPP Loan to retain employees, maintain payroll and make lease, mortgage interest and utility payments.

A copy of the Note is filed as Exhibit 99.1 to this report.

Salary Reduction for Certain Employees

Effective April 27, 2020 (the beginning of the next payroll cycle), the Company will implement a 20% pay reduction for certain employees whose payroll costs exceed $100,000, including executive officers. The Company expects to maintain this reduction for at least 10 weeks. The Company does not intend to reduce pay for employees whose payroll costs are below $100,000.

 

Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties, including, without limitation, statements regarding the use of proceeds from the PPP Loan and the duration of the salary reduction discussed in this report. Words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon the Company’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 various risks and uncertainties detailed in the Company’s filings with the Securities and Exchange Commission (“SEC”). For a discussion of these and other factors, please refer to the Company’s annual report on Form 10-K for the year ended December 31, 2019 as well as the Company’s other filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this report.

(d) Exhibits. 

99.1 Promissory Note, dated April 9, 2020, by and between MannKind Corporation and JPMorgan Chase Bank, N.A.
 


MANNKIND CORP Exhibit
EX-99.1 2 d895756dex991.htm EX-99.1 EX-99.1   Exhibit 99.1   NOTE   Date 4/9/2020 Note Amount $4,…
To view the full exhibit click here

About MannKind Corporation (NASDAQ:MNKD)

MannKind Corporation is a biopharmaceutical company. The Company is focused on the discovery and development of therapeutic products for diseases, such as diabetes. Its product candidate is AFREZZA, which is an inhaled insulin used to control high blood sugar in adults with type I and type II diabetes and helps in glycemic control. AFREZZA consists of a dry formulation of human insulin delivered from a portable inhaler. AFREZZA utilizes its Technosphere formulation technology. Technosphere is a drug delivery platform that may allow the oral inhalation of a range of therapeutics. Technosphere powders are based on the Company’s fumaryl diketopiperazine (FDKP), which is a potential of Hydrogen (pH)-sensitive organic molecule that self-assembles into small particles under acidic conditions. The Company has also created a range of breath-powered, dry powder inhalers. Its inhalers can be produced in both a reusable (chronic treatment) and a single-use (acute treatment) format.