Akorn lenders extend deadline for restated financials to August 2016

By Angela McDaniels

Tacoma, Wash., Nov. 13 – Akorn, Inc.’s lenders have granted it more time to deliver its financial information, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company plans to restate its consolidated financial statements for the fiscal year ended Dec. 31, 2014 and the fiscal quarters ended June 30, 2014 and Sept. 30, 2014.

In May, the lenders of the company’s ABL credit facility and term loan entered into a consent agreement under which they waived some defaults or events of default that may have occurred or may occur as a result of the anticipated restatements and some delays in the company’s delivery of financial statements to the lenders and/or the filing of 10-Q quarterly reports with the SEC as a result of the restatements.

That consent agreement required the company to supply the required financial statements by no later than Nov. 13. This deadline has now been extended to Aug. 15, 2016.

In addition, the company has been given until Aug. 15, 2016 to file its condensed consolidated financial statements for the quarter ended March 31, 2015, the quarter ended June 30, 2015, the quarter ended Sept. 30, 2015, the quarter ending Dec. 31, 2015, the fiscal year ending Dec. 31, 2015 and the quarter ending March 31, 2016.

The company agreed to pay some fees to the lenders party to the consent agreement including by way of an increase in the interest rate on the term loan with the possibility of further increases.

From and after the first date on which the restated financial statements, the 2015 financials and the first-quarter 2016 financials have been delivered, the margin over Libor will range from 425 basis points to 550 bps for the term loan.

If, and for as long as, the company’s common stock is not listed on the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market, the interest rate margins will increase by 50 bps.

To the extent the term loan is refinanced within 12 months of the effectiveness of the term loan consent with certain lower-yielding debt, the company will have to pay a 1% prepayment fee.

Bank of America, NA, Wells Fargo Bank, NA and JPMorgan Chase Bank, NA are the lenders for the ABL facility. JPMorgan is the administrative agent for both the ABL facility and the term loan.

Akorn is a Lake Forest, Ill.-based niche pharmaceutical company.

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