MannKind Corporation (NASDAQ:MNKD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Amendment to Facility Agreement with Deerfield
to a prior amendment to the Facility Agreement, dated July1, 2013 (as amended, the “Facility Agreement”), between MannKind Corporation (the “Company”), MannKind LLC, the Company’s wholly owned subsidiary, and Deerfield Private Design Fund II, L.P. and Deerfield Private Design International II, L.P. (collectively, “Deerfield”), the Company’s obligation to repay $10,000,000 in principal amount of its outstanding 9.75% Senior Convertible Notes due 2019 (the “Tranche 4 Notes”) was deferred until January15, 2018 and the notes were amended to allow conversion into shares of the Company’s common stock at Deerfield’s election and subject to the terms of the amendment. Through January15, 2018, a total of $5,592,749.50 in principal amount of the Tranche 4 Notes were converted into common stock to the amendment and $4,407,250.50 remained payable on January15, 2018. On January18, 2018, the Company and MannKind LLC entered into an Exchange and Sixth Amendment to Facility Agreement (the “Sixth Deerfield Amendment”) with Deerfield, to which, among other things, the Company agreed to issue to Deerfield an aggregate of 1,267,972 shares of its common stock, par value $0.01 per share (the “Exchange Shares”), in exchange for $3,157,251 of the Tranche 4 Notes. In addition, the payment date for the remaining $1,250,000 in remaining principal amount of the Tranche 4 Notes (the “Remaining Payment”) that was previously due to be repaid on January15, 2018 was extended to May6, 2018.
The Company and Deerfield also amended the outstanding Tranche 4 Notes, the Amended and Restated 9.75% Senior Secured Convertible Note due 2019 under the Facility Agreement (the “A&R Notes”) and the 8.75% Senior Secured Convertible Note due 2019 under the Facility Agreement (the “Tranche B Notes”, together with the Tranche 4 Notes and the A&R Notes, the “Deerfield Notes”) to provide that Deerfield may, subject to the terms of the Sixth Deerfield Amendment, convert principal amounts of the Deerfield Notes from time to time into an aggregate of up to 10,000,000 shares of the Company’s common stock (excluding the Exchange Shares). The conversion price will be the greater of (i)the average of the volume weighted average price per share of the Company’s common stock for the three trading day period immediately preceding the date of any election by Deerfield to convert principal amounts of the Deerfield Notes and (ii) $2.75 per share, subject to adjustment under certain circumstances described in the Deerfield Notes. Any conversions of principal by Deerfield under the Deerfield Notes will be applied first to reduce the Remaining Payment, and thereafter to reduce other principal payments due under the Deerfield Notes.
In connection with the Sixth Deerfield Amendment, the Company also entered into a Second Amendment to Escrow Agreement, dated January18, 2018, with Deerfield and US Bank, to which the parties extended the period of the escrow established thereunder to May6, 2018, corresponding to the extended payment date under the Facility Agreement.
Previously, the Company and Deerfield entered into a Fifth Amendment to Facility Agreement (the “Fifth Deerfield Amendment”) to extend a payment date for the Tranche 4 Notes from January15, 2018 (previously deferred from October31, 2017) to January19, 2018, and a First Amendment to Escrow Agreement, with U.S. Bank National Association to extend the period of the escrow established thereunder from January15, 2018 to January19, 2018.
The foregoing description of the amendments to the Facility Agreement and the Deerfield Notes does not purport to be complete and is qualified in its entirety by reference to the Fifth Deerfield Amendment and the Sixth Deerfield Amendment, copies of which are attached as Exhibits 99.1 and 99.2 to this report, respectively; the Facility Agreement, a copy of which is attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July1, 2013; the First Amendment to Facility Agreement and Registration Rights Agreement, dated as of February28, 2014, a copy of which is attached as Exhibit 10.39 to the Company’s Annual Report on Form 10-K filed with the SEC on March3, 2014; the Second Amendment to Facility Agreement and Registration Rights Agreement, dated as of August11, 2014, a copy of which is attached as Exhibit 4.14 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November10, 2014; the Exchange and Third Amendment to Facility Agreement, dated as of June29, 2017, a copy of which is attached as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on June29, 2017; and the Fourth Amendment to Facility Agreement, dated as of October23, 2017, a copy of which is attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on October23, 2017.
| Item 1.01 | Unregistered Sales of Equity Securities. |
The information set forth under Item 1.01 of this report is incorporated by reference into this Item 1.01. 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, as amended, and expects to rely on such exemptions for any issuance of shares of its common stock upon conversion of Deerfield Notes to the Sixth Deerfield Amendment.
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.
Forward-Looking Statements
This report contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995, including statements regarding the completion and timing of the transactions contemplated by the Sixth Deerfield Amendment. 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 based on information currently known to the Company, and involve known and unknown risks and uncertainties, which include, without limitation, risks associated with the satisfaction of closing conditions under the Sixth Deerfield Amendment, the fact that the Company does not control whether any portion of the amended Deerfield Notes will be converted to common stock, and other risks detailed in the Company’s filings with the SEC, including its Quarterly Report on Form 10-Q for the quarter ended September30, 2017. 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.
| Item 1.01 | Financial Statements and Exhibits. |
(d) Exhibits.
MANNKIND CORP ExhibitEX-99.1 2 d478599dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 Execution Version FIFTH AMENDMENT TO FACILITY AGREEMENT This FIFTH AMENDMENT TO FACILITY AGREEMENT (this Amendment) dated as of January 15,…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.