Karyopharm Therapeutics Issues Convertible Preferred Stock in Forbearance Deal

What Happened

• Karyopharm Therapeutics Inc. announced it entered a Forbearance Agreement and related Fee Agreement on September 10, 2026, and on September 17, 2026 issued 20,000 shares of newly created 0% Series A Convertible Perpetual Preferred Stock to satisfy $20.0 million in fees. The Company filed the Certificate of Designations with the Delaware Secretary of State effective September 17, 2026.
• The Convertible Preferred Stock carries an initial liquidation preference of $1,000 per share, is convertible into Common Stock at $1.62 per share (subject to adjustments), does not pay regular dividends (but participates on an as-converted basis), and generally has limited voting rights except on specified protective matters.

Key Details

• 20,000 shares issued to satisfy $20.0 million in fees; initial liquidation preference = $1,000/share.
• Conversion price = $1.62 per share; aggregate cap on common shares deliverable before required Nasdaq stockholder consent = 4,520,000 shares (below 19.99% of common outstanding); 19.99% beneficial ownership limit applies.
• Cash settlement rules apply for shares not deliverable due to caps; deferred cash settlement tied to VWAP and may be paid after shareholder vote or by March 15, 2027 (subject to conditions).
• Holders have a one-time put right on/after September 17, 2029 to require repurchase at $1,000/share; repurchase also triggered on specified “Fundamental Changes” (e.g., certain change-of-control events, delisting, bankruptcy, or specified FDA actions).

Why It Matters

• This transaction affects capital structure and presents potential dilution to common shareholders if the preferred converts. The preferred ranks senior to common stock for liquidation and can require cash or share payments on conversion or repurchase, creating possible future cash or share-delivery obligations.
• Conversion and delivery of shares are limited until the Company obtains required Nasdaq stockholder approval (Consent), which Karyopharm has agreed to seek by March 15, 2027; until then, conversion may be partially cash-settled, and full dilution may be deferred.
• The issuance was part of a forbearance package intended to give the Company time to advance its myelofibrosis program, negotiate with lenders, pursue strategic alternatives, or raise equity—investors should note the financing terms, seniority of the new preferred, and potential governance protections that could affect future transactions.