UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 23, 2024
SCILEX HOLDING COMPANY
(Exact name of registrant as specified in its charter)
Delaware | 001-39852 | 92-1062542 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
960 San Antonio Road, Palo Alto, California, 94303
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (650) 516-4310
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act
Title of each class | Trading | Name of each exchange on which registered | ||
Common stock, par value $0.0001 per share | SCLX | The Nasdaq Stock Market LLC | ||
Warrants to purchase one share of common stock, each at an exercise price of $11.50 per share | SCLXW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 1.01. Entry into a Material Definitive Agreement.
On April 23, 2024, Scilex Holding Company (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with the investor named therein, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “Offering”): (i) an aggregate of 15,000,000 shares of its common stock (the “Shares”), and (ii) common warrants to purchase up to 15,000,000 shares of its common stock (the “Common Warrants” and, together with the Placement Agent Warrants (defined below), the “Warrants”). The offering price per Share and accompanying Common Warrant to purchase one share of common stock is $1.00, for aggregate gross proceeds to the Company from the Offering of $15,000,000, before deducting the placement agent fees (as described below) and other offering expenses. The Company currently intends to use the net proceeds from the Offering for working capital and general corporate purposes, which may include capital expenditures, commercialization expenditures, research and development expenditures, regulatory affairs expenditures, clinical trial expenditures, acquisitions of new technologies and investments, business combinations and the repayment, refinancing, redemption or repurchase of indebtedness or capital stock.
Subject to certain ownership limitations, the Common Warrants are exercisable on the six month anniversary from the date of issuance, will expire on the five-year anniversary of the date of issuance and have an exercise price of $1.10 per share. The exercise price of the Common Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Company’s common stock. Subject to certain exceptions set forth in the Common Warrants, in the event of a fundamental transaction, as described therein, each of the holders of the Common Warrants shall have the right to exercise its Common Warrants and receive the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the holder of shares of the Company’s common stock issuable upon the exercise of its Common Warrant. Additionally, in the event of a fundamental transaction within the Company’s control, as described in the Common Warrants, each holder of the Common Warrants will have the right to require the Company to repurchase the unexercised portion of its Common Warrant at its fair value using the Black Scholes option pricing formula. In the event of a fundamental transaction that is not within the Company’s control, each holder of the Common Warrants will have the right to require the Company or a successor entity to redeem the unexercised portion of its Common Warrant for the same consideration paid to the holders of the Company’s common stock in the fundamental transaction at the unexercised Common Warrant’s fair value using the Black Scholes option pricing formula. If a registration statement covering the issuance of the shares of common stock issuable upon exercise of the Common Warrants is not available for the issuance of such shares, then the holders may exercise the Common Warrants by means of a “cashless exercise.”
A holder (together with its affiliates) may not exercise any portion of the Common Warrants to the extent that the holder would own more than 4.99% (or, at the purchaser’s option upon issuance, 9.99%) of the Company’s outstanding Common Stock immediately after exercise (the “Beneficial Ownership Limitation”). However, upon at least 61 days’ prior notice from the holder to the Company, a holder may increase or decrease the Beneficial Ownership Limitation in accordance with the terms of the Common Warrant, provided that it does not exceed 9.99%.
Pursuant to the Purchase Agreement, the Company has agreed to certain restrictions on the issuance and sale of its common stock or Common Stock Equivalents (as defined in the Purchase Agreement) during the 55-day period following the closing of the Offering, subject to certain exceptions set forth therein.
The Shares, the Warrants and the shares issuable upon exercise of the Warrants were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3, which was originally filed with the Securities and Exchange Commission (the “SEC”) on December 22, 2023, as amended, and was declared effective on January 11, 2024 (File No. 333-276245), a base prospectus dated January 11, 2024 and a prospectus supplement dated April 23, 2024. The Offering closed on April 25, 2024.
StockBlock Securities LLC and its affiliate, Rodman & Renshaw LLC acted as exclusive placement agents (the “Placement Agents”) in connection with the Offering. As compensation for such placement agent services, the Company paid the Placement Agents an aggregate cash fee equal to 8.0% of the gross proceeds actually received by the Company from the Offering. The Company also reimbursed the Placement Agents $100,000 for actual, reasonable and documented fees and expenses, inclusive of fees and expenses of legal counsel and out-of-pocket expenses and $15,950 for clearing expenses. The Company has also agreed to issue to the Placement Agents or their respective designees common warrants, substantially in the form of the Common Warrants, to purchase up to 1,200,000 shares of Common Stock (the “Placement Agent Warrants” and together with the Common Warrants, the “Warrants”), representing up to 8.0% of the total number of Shares issued in the Offering. The Placement Agent Warrants have an exercise price of $1.25 per share (which represents 125% of the combined offering price per share of common stock and the Common Warrant sold in the Offering), will become exercisable on the six month anniversary of the date of issuance and expire five years from the commencement of sales in the Offering.
The Purchase Agreement contains customary representations and warranties, agreements and obligations, conditions to closing and termination provisions.
The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Purchase Agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Purchase Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Purchase Agreement, 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 SEC.
The foregoing summaries of the form of Common Warrant, the form of Placement Agent Warrant and the form of Purchase Agreement do not purport to be complete and are subject to, and qualified in their entirety by, such documents attached as Exhibits 4.1, 4.2 and 10.1, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
A copy of the opinion of Paul Hastings LLP, counsel to the Company relating to the validity of the Shares, the Warrants and the shares of Common Stock issuable upon exercise of the Warrants issued in the Offering is filed with this Current Report on Form 8-K as Exhibit 5.1.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements that involve risks and uncertainties. The risks and uncertainties involved include market conditions, and other risks detailed from time to time in the Company’s periodic reports and other filings with the SEC. You are cautioned not to place undue reliance on forward-looking statements, which are based on the Company’s current expectations and assumptions and speak only as of the date of this Current Report on Form 8-K. The Company does not intend to revise or update any forward-looking statement in this Current Report on Form 8-K as a result of new information, future events or otherwise, except as required by law.
Item 8.01. Other Events.
On April 24, 2024, the Company issued a press release announcing the pricing of the Offering. On April 25, 2024, the Company issued a press release announcing the closing of the Offering. Copies of the press releases are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
4.1 | Form of Common Warrant. | |
4.2 | Form of Placement Agent Warrant. | |
5.1 | Opinion of Paul Hastings LLP. | |
10.1 | Form of Securities Purchase Agreement, dated April 23, 2024, by and between the Company and the purchaser party thereto.* | |
23.1 | Consent of Paul Hastings LLP (included in Exhibit 5.1). | |
99.1 | Press Release, dated April 24, 2024. | |
99.2 | Press Release, dated April 25, 2024. | |
104 | Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL). |
* | Non-material schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the SEC. |
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 | ||||||
Date: April 25, 2024 | By: | /s/ Jaisim Shah | ||||
Name: Jaisim Shah | ||||||
Title: Chief Executive Officer and President |