| Item 1.01. | Entry into a Material Definitive Agreement. |
On November 17, 2022, Scilex Holding Company (the “Company”) entered into a Standby Equity Purchase Agreement (the “Purchase Agreement”) with YA II PN, LTD., a Cayman Islands exempt limited partnership (“Yorkville”).
Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to Yorkville up to $500,000,000 of its shares of common stock, par value $0.0001 per share (the “Common Stock”), from time to time at the Company’s sole and absolute discretion (each such sale, an “Advance”) by delivering written notice to Yorkville (each, an “Advance Notice”) until the first day of the month following the 36-month anniversary of the date on which the initial Registration Statement (as defined below) has been declared effective by the U.S. Securities and Exchange Commission (the “SEC”). The shares of Common Stock purchased pursuant to an Advance will be purchased at a price equal to 98% of the lowest daily VWAP during the two consecutive trading days commencing on the date of delivery of an Advance Notice. “VWAP” means, for any trading day, the daily volume weighted average price of the Common Stock for such trading day on the Nasdaq Capital Market (“Nasdaq”) as reported by Bloomberg L.P. during regular trading hours. The Company may also specify a certain minimum acceptable price per share in each Advance.
Each Advance may be for a number of shares of Common Stock not to exceed 200% of the average of the daily trading volume of the Common Stock on Nasdaq during regular trading hours as reported by Bloomberg L.P. during the five trading days immediately preceding the date of the Advance Notice.
Yorkville’s purchase of shares of Common Stock under the Purchase Agreement would be subject to certain limitations, including that Yorkville could not purchase shares that would result in it (together with its affiliates) owning more than 4.99% of the outstanding voting power or number of Common Stock after such purchase or that would result in it owning more than 19.9% of the Company’s aggregate amount of Common Stock issued and outstanding as of the date of the Purchase Agreement (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including if the average price of all applicable sales of Common Stock under the Purchase Agreement equals or exceeds a certain minimum price.
As consideration for Yorkville’s commitment to purchase Common Stock, the Company shall within three trading days after the execution of the Purchase Agreement, pay YA Global II SPV, LLC, a subsidiary of Yorkville, a structuring fee of $10,000 and issue 250,000 shares of Common Stock to Yorkville as a commitment fee (the “Commitment Shares”).
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