This announcement, based on a press release statement, is not an offer to sell or a solicitation of an offer to buy the mentioned securities. With the stock down 71.08% year-to-date, investors seeking deeper insights into Scilex's financial health and growth prospects can access detailed analysis and Fair Value estimates through InvestingPro's advanced metrics and expert tools. With the stock down 71.08% year-to-date, investors seeking deeper insights into Scilex's financial health and growth prospects can access detailed analysis and Fair Value estimates through InvestingPro's advanced metrics and expert tools. The transaction involves the sale of over 26 million shares of common stock, pre-funded warrants to purchase approximately 2.4 million shares, and common warrants to purchase up to approximately 57.5 million shares.
The combined offering price is set at $0.59 per share of common stock and $0.5899 per pre-funded warrant. The pre-funded warrants are exercisable immediately after the offering closes, with an exercise price of $0.0001, while the common warrants, exercisable six months post-issuance, have an exercise price of $0.6490 per share. Half of these common warrants will expire five years after issuance, with the remainder expiring in two and a half years.
This strategic financial move is expected to close on or about December 13, 2024, subject to customary closing conditions. Scilex anticipates raising gross proceeds of approximately $17 million before fees and other expenses. InvestingPro analysis reveals that the company's current ratio of 0.2 indicates significant short-term liquidity challenges, making this capital raise particularly crucial. (Discover 6 more key insights about SCLX with InvestingPro's comprehensive analysis tools.) The company plans to allocate the net proceeds for general corporate purposes, which may include working capital, research and development, commercialization efforts, and potential acquisitions or debt repayments.
In conjunction with the offering, Scilex has agreed to a warrant amendment with an investor to exercise outstanding warrants for the purchase of approximately 1.76 million shares at a revised exercise price of $0.59, generating an additional $1.0 million in gross proceeds.
Scilex's portfolio includes ZTlido® for postherpetic neuralgia pain, ELYXYB® for acute migraine treatment, and Gloperba® for gout flare prophylaxis. The company also has several product candidates in development, including SP-102 for sciatica pain, which has completed a Phase 3 study and received Fast Track designation from the FDA.
The securities in this offering are issued pursuant to a shelf registration statement filed and declared effective in early 2024. A prospectus supplement and accompanying prospectus detailing the offering terms will be filed with the SEC and available on their website.
This announcement, based on a press release statement, is not an offer to sell or a solicitation of an offer to buy the mentioned securities.
In other recent news, Scilex Holding Company has been experiencing significant developments. The company recently announced a joint venture with IPMC, named Scilex Bio, to develop and commercialize KDS2010, a novel obesity and neurodegenerative disease treatment currently in Phase 2 clinical trials. Scilex also disclosed the sale of a significant portion of its stock to meet debt obligations, a strategic move to manage its debt effectively.
Simultaneously, the company appointed BPM LLP as its new independent registered public accounting firm, ensuring high standards of financial reporting and compliance. In addition, David Lemus resigned from Scilex's Board of Directors for personal and professional reasons.
Scilex also successfully negotiated waivers for potential defaults on its financial obligations, preventing immediate acceleration of payment obligations under the senior secured promissory note and the Tranche B notes. These recent developments reflect Scilex's ongoing efforts to manage its financial health and operational performance. Analysts from H.C. Wainwright maintain a Buy rating on Scilex, indicating a positive outlook for the company.
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