MannKind Corporation (NASDAQ:MNKD) Files An 8-K Entry into a Material Definitive Agreement

Item1.01 Entry into a Material Definitive Agreement.

On June 27, 2017, MannKind Corporation (the Company) entered into
an agreement (the Mann Group Agreement) with The Mann Group LLC
(the Mann Group), to which the parties agreed to, among other
things, (i) capitalize $10.7 million of accrued and unpaid
interest as of June 30, 2017 under the Amended and Restated
Promissory Note held by the Mann Group, dated as of October 18,
2012 (Promissory Note), resulting in such amount being classified
as outstanding principal under the Promissory Note, (ii) advance
to the Company approximately $19.4 million, the remaining amount
available for borrowing by the Company under the Promissory Note
after the foregoing capitalization of accrued and unpaid
interest, and (iii) defer all interest payable on the outstanding
principal under the Promissory Note until July 1, 2018 (subject
to further deferral under a subordination agreement with
Deerfield Private Design Fund II, L.P. and Deerfield Private
Design International II, L.P. (collectively, Deerfield) until the
Companys payment obligations to Deerfield have been satisfied in
full, except for certain permitted payments (including interest
payable in-kind)). All outstanding advances under the Promissory
Note and any unpaid accrued interest thereon continue to be due
and payable on January 5, 2020.

The foregoing description of the Mann Group Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Mann Group Agreement, a copy of which is
attached to this report as Exhibit 99.1; and the Promissory Note,
a copy of which is attached as Exhibit 10.2 to the Companys
Current Report on Form 8-K filed with the Securities and Exchange
Commission (the SEC) on October 19, 2012.

On June 29, 2017, the Company and MannKind LLC, the Companys
wholly owned subsidiary, entered into an Exchange and Third
Amendment to Facility Agreement with Deerfield (the Deerfield
Amendment), to which the parties agreed to, among other things,
(i) exchange $5.0 million principal amount under the Companys
9.75% Senior Convertible Notes due 2019 (the Tranche 4 Notes) for
3,584,230 shares of the Companys common stock (the Exchange
Shares) at an exchange price of $1.395 per share and (ii) amend
the Facility Agreement with Deerfield, dated as of July 1, 2013,
as amended (the Facility Agreement), to (A) defer the payment of
$10.0 million in principal amount of the Tranche 4 Notes from the
original July 18, 2017 due date to August 31, 2017, with an
option for the Company to elect to further defer the payment of
such principal amount from August 31, 2017 to October 31, 2017
upon the Companys delivery on August 31, 2017 of a written
certification to Deerfield that certain conditions have been met,
including that no event of default under the Facility Agreement
has occurred, Michael Castagna remains the Companys Chief
Executive Officer, the Company has received the advance from the
Mann Group described above, the Company has at least $10 million
in cash and cash equivalents on hand, no material adverse effect
on the Company has occurred, the engagement letter between the
Company and Greenhill Co., Inc. (Greenhill) has remained in full
force and effect and Greenhill has remained actively engaged in
exploring capital structure and financial alternatives on behalf
of the Company in accordance with such engagement letter
(collectively, the Extension Conditions), and (B) amend the
Companys financial covenant under the Facility Agreement to
provide that, if the Extension Conditions remain satisfied, the
obligation under the Facility Agreement to maintain at least $25
million in cash (including available borrowings under the
Promissory Note) as of the end of each quarter will be reduced to
$10 million as of the last day of each month through October 31,
2017 and as of December 31, 2017.

The foregoing description of the Deerfield Amendment does not
purport to be complete and is qualified in its entirety by
reference to the Deerfield Amendment, a copy of which is attached
to this report as Exhibit 99.2; the Facility Agreement, a copy of
which is attached as Exhibit 99.1 to the Companys Current Report
on Form 8-K filed with the SEC on July 1, 2013; the First
Amendment to Facility Agreement and Registration Rights
Agreement, dated as of February 28, 2014, a copy of which is
attached as Exhibit 10.39 to the Companys Annual Report on Form
10-K filed with the SEC on March 3, 2014; and the Second
Amendment to Facility Agreement and Registration Rights
Agreement, dated as of August 11, 2014, a copy of which is
attached as Exhibit 4.14 to the Companys Quarterly Report on Form
10-Q filed with the SEC on November 10, 2014.

Item2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information under Item 1.01 above relating to the $19.4
million advance from the Mann Group is incorporated by reference
into this Item 2.03.

Item3.02 Unregistered Sales of Equity
Securities.

The information under Item 1.01 above relating to the Exchange
Shares is incorporated by reference into this Item 3.02. The
Company relied on the exemption from registration contained in
Section 3(a)(9) of the Securities Act of 1933, as amended, for
the issuance of the Exchange Shares.

Item5.07 Submission of Matters to a Vote of Security
Holders.

At the Companys 2017 Annual Meeting of Stockholders held on May
18, 2017, the Companys stockholders indicated, on an advisory
basis, to hold the stockholder advisory vote on executive
compensation on an annual basis. As a result, the Company will
continue to hold annual stockholder advisory votes on executive
compensation until the Companys next stockholder advisory vote on
the frequency of such stockholder advisory votes, which must be
held at least once every six years.

Item8.01 Other Events.

The Company has engaged Greenhill as a financial advisor to
explore capital structure and financial alternatives on behalf of
the Company. The Company does not intend to discuss or disclose
further developments related to Greenhills engagement until, if
ever, the Company determines that further disclosure is required
or appropriate.

Item9.01 Financial Statements and Exhibits.

(d) Exhibits.

MANNKIND CORP Exhibit
EX-99.1 2 d419252dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 AGREEMENT THIS AGREEMENT (this “Agreement”) is entered into as of June 27,…
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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.