Affiliates of Murchinson, 3i LP, and existing senior debt holder, Oramed Pharmaceuticals, Inc. ("Oramed"), are expected to participate in the $50 million convertible note offering, which is expected to close on or about October 7, 2024.
The offering involves a refinancing and restructuring of existing debt and is expected to position Scilex for sustainable, long-term growth, as part of its multi-year plan to transform into a potential global and leading non-opioid pain management company.
Scilex will receive from Oramed in consideration for the newly issued convertible note issued to Oramed an exchange and reduction of the principal balance under the Company's existing Senior Secured Promissory Note with Oramed (the "Oramed Note").
Over the past 12 months, Scilex has aggressively addressed and restructured the debt on our balance sheet with payments of more than $80 million.
The new financing will allow Scilex to retire the revolving facility with eCapital Healthcare Corp. in its entirety.
As previously announced, on June 11, 2024, Scilex has successfully eliminated a $10.0 million loan with FSF 33433 LLC.
PALO ALTO, Calif., Oct. 07, 2024 (GLOBE NEWSWIRE) -- Scilex Holding Company (NASDAQ:SCLX, "Scilex" or the "Company")), an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain, today announced that it has entered into a definitive agreement with affiliates of Murchinson, 3i LP and with Oramed for the purchase and sale of new tranche B senior secured convertible notes in the aggregate principal amount of $50 million (the "New Financing") and warrants to purchase up to 7,500,000 shares of the Company's common stock in a registered direct offering.
The Notes will have an original issue discount of 10.0% and bear interest at a rate of 5.5% per annum and unless earlier converted or redeemed, the Notes will mature on the two-year anniversary of the issuance date. The Company will receive in exchange for the issuance of the Notes to the affiliates of Murchinson and to 3i LP an aggregate amount in cash equal to $22,500,000, excluding fees and expenses, from such investors. The Company will receive from Oramed in consideration for the Note issued to Oramed an exchange and reduction of the principal balance under the Oramed Note of $22,500,000. All amounts due under the Notes will be convertible at any time, in whole or in part, subject to certain beneficial ownership limitations, at the option of the holder into shares of the Company's common stock at a conversion price equal to $1.09, subject to adjustment as described in the Notes. The warrants will have an exercise price of $1.09 (subject to adjustment as described in the warrants) and will become exercisable immediately upon issuance and will expire on the date that is five years from the initial exercisability date.
StockBlock Securities LLC and its affiliate, Rodman & Renshaw LLC, are acting as the exclusive placement agents in connection with this offering.
The closing of the offering is expected to occur on or about October 7, 2024, subject to satisfaction of certain closing conditions. The net proceeds from the offering are expected to be approximately $20,500,000, after deducting the placement agents' fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for repayment and satisfaction of $12,500,000 of the outstanding balance under the Oramed Note, payoff of the revolving credit facility with eCapital Healthcare Corp, satisfaction of certain costs, fees and expenses of the purchasers of the notes and the collateral agent, and, to the extent there are ...
