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CUSIP No. 80880W106 | | 13D | | Page 2 of 5 pages |
Explanatory Note
This Amendment No. 2 to Schedule 13D (“Amendment No. 2”) amends and supplements the Schedule 13D filed by Sorrento Therapeutics, Inc. (the “Reporting Person”) with the United States Securities and Exchange Commission on November 17, 2022 (as amended to date, the “Schedule 13D”), relating to the common stock, $0.0001 par value per share (the “Common Stock”), of Scilex Holding Company (the “Issuer”). Capitalized terms used herein without definition shall have the meaning set forth in the Schedule 13D.
Item 4. | Purpose of Transaction |
Item 4 of the Schedule 13D is hereby amended and supplemented as follows:
DIP Facility
On February 13, 2023, the Reporting Person commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Proceedings”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). On February 21, 2023, the Bankruptcy Court granted on an interim basis a motion to approve the Reporting Person’s entry into a non-amortizing super-priority senior secured term loan facility with JMB Capital Partners Lending, LLC in an aggregate principal amount not to exceed $75,000,000 in term loan commitments (the “DIP Facility”), subject to the terms and conditions set forth in the Debtor-In-Possession Term Loan Facility Summary of Terms and Conditions (the “DIP Term Sheet”).
The DIP Facility is secured by a lien on substantially all of the Reporting Person’s unencumbered assets, which includes: (i) 61,985,795 shares of Common Stock; (ii) 29,057,097 shares of Series A Preferred Stock; and (iii) warrants exercisable for up to 4,490,617 shares of Common Stock.
Definitive financing documentation, including a credit agreement and other documents evidencing the DIP Facility are expected to be negotiated and executed at a later date. The Reporting Person anticipates seeking final approval of the DIP Facility from the Bankruptcy Court at a hearing on or around March 29, 2023.
The foregoing descriptions of the DIP Facility does not purport to be complete and is qualified in its entirety by reference to the DIP Term Sheet, which is filed as an exhibit to this Schedule 13D and incorporated herein by reference.
General
The Reporting Person acquired the securities described in this Schedule 13D in connection with the consummation of the Business Combination. The Reporting Person intends to review its investments in the Issuer on a continuing basis. Any actions the Reporting Person might undertake will be dependent upon the Reporting Person’s review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments.