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Post by hellodolly on Sept 27, 2018 5:59:58 GMT -5
DFLD continues to play nice in the sandbox. deferring the requirement for payment to October 31, 2018 or as soon as the 45M is received if before the 31st and, reducing the amount to be held each quarter from 25M to 20M.
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on September 3, 2018 MannKind Corporation (the “Company”) entered into an exclusive global license and collaboration agreement (the “License Agreement”) with United Therapeutics Corporation, pursuant to which, among other things, the Company will receive an upfront payment of $45 million within 10 business days following the effectiveness of the License Agreement (the “Upfront Payment”). The effectiveness of the License Agreement is conditioned upon expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
On September 26, 2018, the Company and MannKind LLC, the Company’s wholly owned subsidiary, entered into a Tenth Amendment to Facility Agreement (the “Deerfield Amendment”) with Deerfield Private Design Fund II, L.P. and Deerfield Private Design International II, L.P. (“Deerfield”), pursuant to which the parties amended the Company’s Facility Agreement, dated July 1, 2013, as amended (the “Facility Agreement”), to, among other things, (i) defer the payment of $3.0 million in principal amount of the Tranche 4 Notes issued under the Facility Agreement from September 30, 2018 to the earlier of October 31, 2018 and the first business day following the date the Company or any of its subsidiaries receives the Upfront Payment, (ii) provide that the payment of accrued and unpaid interest on the notes issued under the Facility Agreement (the “Deerfield Notes”) that is due and payable for the quarter ending September 30, 2018 shall be deferred to, and shall be due and payable on, the earlier of October 31, 2018 and the first business day following the date the Company or any of its subsidiaries receives the Upfront Payment and (iii) modify the Company’s financial covenant under the Facility Agreement, which generally obligates the Company to maintain at least $25 million in cash and cash equivalents on the last day of each fiscal quarter, by removing the financial covenant for the fiscal quarter ending September 30, 2018, reducing the amount of cash and cash equivalents required to be maintained as of December 31, 2018 to $20 million, and requiring the Company to maintain at least $20 million in cash and cash equivalents as of October 31, 2018.
The foregoing description of the Deerfield Amendment and the License Agreement does not purport to be complete and is qualified in its entirety by reference to the Deerfield Amendment, a copy of which is attached as Exhibit 99.1 to this report, and the License Agreement, dated as of September 3, 2018, a copy of which will be filed as an exhibit to the Company’s quarterly report on Form 10-Q for the quarter ending September 30, 2018.
Item 8.01 Other Events.
In September 2018, Deerfield converted approximately $10.5 million principal amount of Deerfield Notes into an aggregate of 5,749,500 shares of the Company’s common stock at a weighted-average conversion price of $1.83 per share.
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Post by tw12 on Sept 27, 2018 6:34:01 GMT -5
May all these small steps for MannKind soon become giant leaps of progress...
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Post by cjc04 on Sept 27, 2018 6:34:17 GMT -5
And the last paragraph,,,, they just converted another $10.5 mil of debt into shares.
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Post by dh4mizzou on Sept 27, 2018 6:37:14 GMT -5
I've lost track of the numbers but wouldn't that drop the total amount due Deerfield to 15M?
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Post by cjc04 on Sept 27, 2018 6:38:46 GMT -5
I've lost track of the numbers but wouldn't that drop the total amount due Deerfield to 15M? i was thinking the same thing, so then why would they still need $20 mil on hand at the end of every Q? |
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Post by hellodolly on Sept 27, 2018 6:42:44 GMT -5
And the last paragraph,,,, they just converted another $10.5 mil of debt into shares. Another $10.5M or they converted the shares from the last amendment in Septmeber? |
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Post by dh4mizzou on Sept 27, 2018 6:46:09 GMT -5
I've lost track of the numbers but wouldn't that drop the total amount due Deerfield to 15M? i was thinking the same thing, so then why would they still need $20 mil on hand at the end of every Q? I can only think of a couple of reasons. First is that it's "boilerplate" language that just gets included in the event that MNKD doesn't close out the Deerfield position? Second is that they may be negotiating with Deerfield to extend and expand the agreement?
I'm sure I'm not even close to the real reason but that's my 2 cents worth.
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Post by mnholdem on Sept 27, 2018 6:55:02 GMT -5
Deerfield is also entitled to milestone payments, but I suspect that the balance of debt is the primary driver behind the EOQ minimum cash/cash equivalents.
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Post by matt on Sept 27, 2018 7:07:17 GMT -5
In a disaster scenario, Deerfield is high in the priority for receiving money but they are not necessarily first in line. Keeping the covenant at $20 even though the principal is reduced to $15 makes sense if you are a lender trying to plan for a worst case scenario, and lenders always plan for the worst case (read any car loan or mortgage instrument you might have signed in your life for examples).
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Post by patten1962 on Sept 27, 2018 7:31:09 GMT -5
Can someone dumb this down for me?
😁
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Post by bioexec25 on Sept 27, 2018 7:45:00 GMT -5
Can someone dumb this down for me? 😁 I don’t profess to speak Matt, but I believe, God forbid, he’s referring to this minimum is to cover BK restructuring costs and their remaining DF debt. |
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Post by boca1girl on Sept 27, 2018 7:51:46 GMT -5
Can someone dumb this down for me? 😁 1. Deerfield will wait for the $3M+ payment once due 8/30, then due 9/30 to no later than 10/31 or sooner if cash received from United. 2. Deerfield reduced the cash holding requirement at quarter end from $25M to $20M. 3. Deerfield converted $10.5M of debt into 5+M shares in Sept at an aver price of $1.83. |
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Post by markado on Sept 27, 2018 7:56:44 GMT -5
I guess we now know why short interest increased by ~6 million shares in September. As soon as DF converts, they loan them out. No friends to LT shareholders in the near term, but they have and are providing the structural funds and financing adjustments for long term success. I'll be happy when they're out of the debt holder drivers seat.
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Post by tchalaa on Sept 27, 2018 8:01:03 GMT -5
1. Deerfield will wait for the $3M+ payment once due 8/30, then due 9/30 to no later than 10/31 or sooner if cash received from United. 2. Deerfield reduced the cash holding requirement at quarter end from $25M to $20M. 3. Deerfield converted $10.5M of debt into 5+M shares in Sept at an aver price of $1.83. it is great news, we are getting out of the liabilities loop and this time with strength -- extra $45M |
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Post by cjc04 on Sept 27, 2018 8:03:27 GMT -5
So is October 13th the latest date MNKD would get the $45 mil in the bank? Based on 10 days after the 30 day waiting period?
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