Company: SCLXW
Filing Date: 2025-01-17
Form Type: 10-Q
Source: 0000950170-25-006755
Chunk: 357

Company: Scilex Holding Co
Filing Date: 2025-01-17
Form: 10-Q
Item: Item 8
Chunk 357
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 indebtedness or to make any accelerated payments, and Oramed could seek to enforce its security interests in the collateral securing such indebtedness or other remedies available to it under the Oramed Note or as provided by applicable law. Oramed could also seek to enforce the guaranty under the Subsidiary Guarantee entered into by us and each of our subsidiaries, dated as of September 21, 2023, to carry out our payment obligations under the Oramed Note. Any failure by us to comply with the obligations under the Oramed Note could have a negative effect on our business, financial condition and results of operations.

In addition, the Senior Convertible Notes prohibit us from entering into specified fundamental transactions unless the successor entity assumes all of our obligations under the Senior Convertible Notes under a written agreement approved by the required holders of the Senior Convertible Notes before the transaction is completed. Upon consummation of specified fundamental transactions, the successor entity must confirm that upon conversion or redemption of the Senior Convertible Notes thereafter, shares of the successor entity will be issuable upon such conversion or redemption. The holders of the Senior Convertible Notes also have certain redemption rights upon a fundamental transaction constituting a change of control.

Our outstanding indebtedness and any future indebtedness we may incur, combined with our other financial obligations, could increase our vulnerability to adverse changes in general economic, industry and market conditions, limit our flexibility in planning for, or reacting to, changes in our business and the industry and impose a competitive disadvantage compared to our competitors that have less debt or better debt servicing options. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.

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The Oramed Note and Tranche B Notes impose certain operating and financial covenants and any failure to comply with such covenants could result in an event of default that could adversely affect our business, financial condition and results of operations.

We have entered into that certain Waiver under Senior Secured Promissory Note, dated November 21, 2024, with Oramed and that certain Waiver and Consent, dated November 21, 2024, with each of (i) Nomis Bay Ltd and BPY Limited, (ii) Oramed and (iii) 3i, LP, respectively, the result of which is that there is not presently an event of default under the Oramed Note and the Tranche B Notes (the “Existing Notes”) as a