Karyopharm Therapeutics(KPTI) - 2025 Q3 - Quarterly Results

Financing Transactions - The company entered into financing transactions providing $100 million in financial flexibility and additional capital, including $67.5 million from senior secured lenders and $15 million from convertible note exchanges[5] - The financing transactions are expected to result in approximately $36 million in cash proceeds, aiding the company's operating plans into Q2 2026[6] - Following the transactions, the company will have $112.5 million in senior secured term loans maturing in May 2028 and $103.5 million in convertible notes due May 2029[7] - The company amended its credit agreement, allowing for additional loans of $12.5 million and reducing liquidity requirements to a minimum of $10 million for the next year[10] - The financing transactions are expected to close around October 10, 2025, subject to customary conditions[13] - The Company entered into agreements to exchange approximately $101.0 million of Old 2029 Notes for $103.5 million of newly issued 9.00% convertible senior notes due 2029[26] - The Company entered into agreements to exchange $24.25 million of 3.00% senior convertible notes due 2025 for 2,435,146 shares of common stock and warrants to purchase 2,502,151 shares at an exercise price of $6.64 per share[39] - The Company agreed to pay $10.1 million in fees to lenders, issuing 748,632 shares of common stock and warrants to purchase 1,882,530 shares at an exercise price of $6.64 per share[41][42] Share Issuance and Warrants - The company will issue 7,223,982 new shares of common stock and warrants to purchase an aggregate of 5,918,358 shares at an exercise price of $6.64, a 15% premium to the Nasdaq minimum price[8] - The Company will issue approximately 2,024,344 shares of common stock in exchange for $15.0 million of Old 2029 Notes[37] - The Company will issue 1,487,917 shares of common stock and warrants to purchase 1,317,771 shares at a price of $5.88 per share in a private placement, expected to generate approximately $8.75 million in gross proceeds[47][49] - The exercise price of the warrants issued in the Financing Transactions is set at $6.64 per share, with a total of 4,600,587 shares available for purchase[51] - The Company will issue 201,276 shares of common stock to the Investor Representative as part of the HCRx Amendment[46] Convertible Notes - The company plans to issue $15 million in new 9.00% senior secured convertible notes due 2028, with interest payable quarterly starting December 31, 2025[15] - The initial conversion price for the 2028 notes is set at $6.64 per share, representing a 15% premium over the last reported sale price of $5.77[18] - The 2029 Notes will bear interest at a rate of 9.00% per year, payable quarterly, starting December 31, 2025[28] - The initial conversion rate for the 2029 Notes is set at 44.444 shares per $1,000 principal amount, equivalent to a conversion price of $22.50 per share[30] - The 2029 Notes will mature on May 13, 2029, unless converted or redeemed earlier[28] - Holders of the 2029 Notes may require the Company to repurchase their notes at 100% of the principal amount upon a Fundamental Change[32] - The 2029 Notes Indenture includes negative covenants that restrict various corporate actions, including additional indebtedness and asset sales[35] - The 2029 Notes will rank behind the 2028 Notes in terms of collateral distribution[34] Liquidity and Financial Requirements - The Company is required to maintain liquidity of at least $10 million plus 50% of net cash proceeds from any new debt issuance or $25 million, whichever is less, until October 10, 2026[24] - After October 10, 2026, the liquidity requirement will be a minimum of $25 million at all times[24] - The Company will have a total of $116.2 million in maximum remaining payments under its revenue interest financing agreement[7] Employee Retention Program - The Company will implement a Retention Program for certain employees, including executive officers, to align compensation with strategic goals[75] - Under the Retention Program, Richard Paulson will receive 114,285 restricted stock units (RSUs), while Lori Macomber and Sohanya Cheng will each receive 43,650 RSUs[76] - Dr. Reshma Rangwala will receive a $1,000,000 cash retention bonus, with repayment conditions based on employment termination[76] - The total retention cash bonuses under the Retention Program are expected to be approximately $2.0 million for company-wide retention and $7.0 million based on expected 2025 corporate performance[77] Revenue and Financial Outlook - The Company expects total revenue for the three months ended September 30, 2025, to be in the range of $42.0 to $44.0 million, with U.S. XPOVIO net product revenue approximately $32.0 million[81] - As of September 30, 2025, the Company anticipates cash, cash equivalents, restricted cash, and investments to be around $46 million[81] - The Company expects to report top-line data from the Phase 3 SENTRY trial of selinexor in March 2026[80] - The financial information presented is preliminary and may vary upon completion of quarterly review procedures[82] Registration and Indemnification - The Company will enter into registration rights agreements to register shares issued in the Financing Transactions, with a filing deadline of 45 days following the closing date[59][63] - Liquidated damages of 1% of the aggregate notional amount of the Registrable Securities will be paid for registration defaults, subject to certain caps[60][64] - The Company has granted customary indemnification rights to lenders and purchasers in connection with the registration statements[61][65] Other Amendments - The HCRx Amendment increased the Applicable Tiered Percentage to 8.00% from April 1, 2026, and waived Revenue Interests payments for specific quarterly dates, with total Revenue Interests capped at $263.3 million[45] - The pre-funded warrants will have an exercise price of $0.001 per share, with cashless exercise options available under certain conditions[55]