UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 1.01. | Entry into a Material Definitive Agreement. |
Deferral and Consent under Tranche B Senior Secured Convertible Note
As previously disclosed by Scilex Holding Company (the “Company”), the Company issued a Tranche B Senior Secured Convertible Note, dated as of October 8, 2024, to each of Oramed Pharmaceuticals Inc. (“Oramed”), Nomis Bay Ltd, BPY Limited and 3i, LP (collectively, the “Tranche B Noteholders”, and the notes, the “Tranche B Notes”). Pursuant to the Tranche B Notes, commencing on January 2, 2025 (the “First Amortization Payment Date”), the Company is required to redeem in cash (the “First Amortization Payment”) such portion of the principal amount of the Tranche B Notes equal to each Tranche B Noteholder’s Holder Pro Rata Amount (as defined in the Tranche B Notes) of $6,250,000 per fiscal quarter at a redemption price equal to 100% of such Amortization Amount (as defined in the Tranche B Notes).
On January 2, 2025, the Company entered into a deferral and consent letter with each of (i) Nomis Bay Ltd and BPY Limited (the “Nomis Bay Consent”), (ii) Oramed (the “Oramed Consent”) and (iii) 3i, LP (the “3i Consent” and, together with the Nomis Bay Consent and the Oramed Consent, the “Tranche B Consents”), respectively, pursuant to which the Tranche B Noteholders agreed to defer the Company’s obligation to make the First Amortization Payment until January 31, 2025. In consideration of such deferral, and to limit the Tranche B Noteholders’ right to exercise certain secured creditor remedies (including recourse against the assets of SCLX Stock Acquisition JV (“SCLX JV”) as a grantor under the Security Agreement (as defined in the Tranche B Consents)), SCLX JV agreed to deliver to the Tranche B Noteholders (or their designee) by deposit/withdrawal at custodian with the Depository Trust Company an aggregate of 5,000,000 shares of common stock, par value $0.0001 per share, of the Company (the “Scilex Shares” and each a “Scilex Share”), held by SCLX JV, of which 2,500,000 shares will be delivered to Oramed, 720,000 shares will be delivered to BPY Limited, 1,280,000 shares will be delivered to Nomis Bay Ltd, and 500,000 shares will be delivered to 3i, LP.
In addition, pursuant to the Tranche B Consents, effective as of the latest of (i) the time of execution and delivery of the Tranche B Consents, (ii) the time of the delivery of the Scilex Shares and (iii) the time of grant of the Royalty and Exclusive Rights (each as defined in, and contemplated pursuant to, the Term Sheet that is an exhibit to the Tranche B Consents (the “Term Sheet”)), the Tranche B Noteholders agreed to further defer the Company’s obligation to make the First Amortization Payment until October 8, 2026, provided that, as contemplated in the Term Sheet, the Company paid an aggregate of $1.11 million in respect of a portion of the First Amortization Payment and related make-whole interest (which amount has been paid).
The Term Sheet provides that the Company and the Tranche B Noteholders would enter into an agreement pursuant to which the Tranche B Noteholders shall collectively receive a 10 year, assignable, freely transferable, 4% royalty (the “Royalty”) on the worldwide Net Sales (as defined therein) of Gloperba and Elyxyb, excluding sales of Elyxyb in Canada.
Pursuant to the Term Sheet, among other things, the Tranche B Noteholders shall have the right (but not the obligation) to collectively fund up to 50% of the cash purchase price to acquire an Ex-US Product Right (as defined therein). If a Tranche B Noteholder elects to fund any portion of the cash purchase price in respect of an Ex-US Product Right, such Tranche B Noteholder would be entitled to receive revenues from the commercialization, licensing or any other activities in respect of such Ex-US Product Rights in proportion to the percentage of the cash purchase price that Tranche B Noteholder has funded.
The transactions contemplated by the Term Sheet are subject to certain closing conditions, including that the Company shall secure an agreement to extend the maturity of its obligations under that certain Senior Secured Promissory Note issued to Oramed on September 21, 2023 to December 31, 2025, which extension shall provide for, among other things, additional covenants in respect of the conduct of the Company’s business. With such extension, the Company’s final installment payment of approximately $25 million, together with accrued interest, (currently due on March 21, 2025) will not be due until December 31, 2025. Oramed has no obligation to provide such extension and any such extension is dependent upon achievement of definitive documents acceptable to Oramed in its discretion.
The representations and warranties contained in the Tranche B Consents were made only for purposes of such Tranche B Consents and as of specific dates, were solely for the benefit of the parties to the Tranche B Consents, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Tranche B Consents are incorporated herein by reference only to provide investors with information regarding the terms of the Tranche B Consents, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission.
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The foregoing summaries of the Nomis Bay Consent, the Oramed Consent and the 3i Consent (in each case include the Term Sheet which is an exhibit thereto) do not purport to be complete and are qualified in their entireties by reference to the full text of these agreements, a copy of each of which is filed herewith as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SCILEX HOLDING COMPANY | ||
| By: | /s/ Jaisim Shah | |
| Name: | Jaisim Shah | |
| Title: | Chief Executive Officer & President | |
Date: January 3, 2025
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