Akorn, Inc. engages in the development, manufacture, and marketing of generic and prescription pharmaceuticals, and animal and consumer health products. It operates through the Prescription Pharmaceuticals and Consumer Health business segments. The Prescription Pharmaceuticals segment manufactures and markets generic and branded prescription pharmaceuticals including ophthalmic, injectable, oral liquids, topical, inhalants, and nasal sprays. The Consumer Health segment offers branded and private-label animal health; and over-the-counter products. The company was founded in 1971 and is headquartered in Lake Forest, IL.
The Standstill Agreement with our lenders requires us to observe certain covenants, which creates material uncertainties and risks to our growth and business outlook, and any failure to comply with the Standstill Agreement could result in an event of default under the Term Loan Agreements and render us insolvent.
Pursuant to the terms of the Standstill Agreement, the Company must enter into a comprehensive amendment of the Term Loan Agreements (a “Comprehensive Amendment”) that is satisfactory in form and substance to the lenders. If the Company does not enter into such a Comprehensive Amendment by December 13, 2019, an event of default will occur under the Term Loan Agreements which, if not waived, could materially affect the Company’s business, financial position and results of operations, and could render us insolvent.
The Standstill Agreement requires the Company to pay certain fees and expenses and provides for an increased interest margin, which may negatively impact the Company’s financial condition.
As a result of a jury verdict finding John N. Kapoor, Ph.D., guilty in a federal criminal case, OIG-HHS’s permissive exclusion rules could lead to the Company’s exclusion from participating in U.S. government healthcare programs, which could have a material adverse effect on our business, financial condition and results of operations.
John N. Kapoor’s, Ph.D., involvement with the Company through his stock ownership and his right to nominate up to three directors could have an adverse effect on the price of our common stock and have substantial influence over our business strategies and policies.
Our regulatory environment is changing and failure to meet the changes could result in penalties, reputational damage and negative impacts on our operations and financial results.
Our inability to timely and adequately address FDA warning letters and OAI facility status may adversely affect our business.