Karyopharm Issues $20M Convertible Preferred Stock to Creditors as Forbearance Fee

summarizeSummary

Karyopharm issued $20 million of convertible perpetual preferred stock to creditors as a forbearance fee, with conversion at $1.62 per share and senior liquidation rights.

check_boxKey Events · Financing and Capital Events · KPTI

• $20M Preferred Stock Issued to Creditors

  Karyopharm issued 20,000 shares of 0% Series A Convertible Perpetual Preferred Stock with a $1,000 per share liquidation preference to satisfy $20 million in forbearance fees owed to lenders.

• Conversion at $1.62 Per Share

  The preferred stock converts into common stock at $1.62 per share, below the current $1.88 market price, creating immediate dilution potential for existing shareholders.

• 4.52M Share Cap Until Stockholder Vote

  Conversions are capped at 4,520,000 shares (less than 19.99% of outstanding) until stockholder approval is obtained; the company must seek that approval by March 15, 2027.

• Senior Liquidation Preference

  The preferred stock ranks senior to common stock in liquidation, with holders entitled to the greater of $1,000 per share or the as-converted value.

auto_awesomeAnalysis · KPTI · Life Sciences

Karyopharm paid a $20 million forbearance fee to its lenders by issuing a new series of convertible perpetual preferred stock. The preferred stock converts into common stock at $1.62 per share — a price below the current $1.88 market price — and carries a $1,000 per share liquidation preference senior to common equity. Until stockholder approval is obtained, conversions are capped at 4.52 million shares, but the company must seek that approval by March 15, 2027. The preferred stock also gives holders a put right at $1,000 per share starting September 2029 and repurchase rights upon a Fundamental Change, including an FDA rejection of the myelofibrosis sNDA. This is a highly dilutive, creditor-friendly instrument issued by a company that has already warned it may not survive.