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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):
July 10, 2024
Eloxx Pharmaceuticals, Inc.
(Exact name of registrant as specified
in its charter)
Delaware |
|
001-31326 |
|
84-1368850 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(I.R.S. Employer
Identification No.) |
P.O. Box 274, Arlington, MA |
|
02476 |
(Address of principal executive offices) |
|
(Zip Code) |
(Registrant’s telephone number,
including area code): (781) 577-5300
480 Arsenal Way, Suite
130, Watertown, MA 02472
(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
Symbol(s) |
Name
of each exchange on which
registered |
Common Stock, $0.01 par value per share |
ELOX |
OTC Pink Market |
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. |
Sixth Amendment to Hercules Loan and Security Agreement
On July 10, 2024 (the “Closing Date”),
Eloxx Pharmaceuticals, Inc. (the “Company”) entered into the Sixth Amendment (the “Sixth Amendment”) to the
Loan and Security Agreement, dated as of September 30, 2021, by and among (i) Hercules Capital, Inc., a Maryland corporation
(“Hercules”), in its capacity as administrative agent, and collateral agent, (ii) Hercules Capital IV, L.P., as a lender,
(iii) Domicilium Fund III LP and its affiliate, SD MF 4 LLC, a Delaware limited liability company (“SD MF”), as lenders
(together, “Domicilium”), (iv) the Company, as a borrower, (v) Zikani Therapeutics, Inc., a Delaware corporation
and wholly-owned subsidiary of the Company, as a borrower (together with the Company, the “Borrower”), and (vi) Eloxx
Pharmaceuticals Ltd., an Israeli company and wholly-owned subsidiary of the Company (as amended prior to the Sixth Amendment, the “Loan
Agreement” and, as amended by the Sixth Amendment, the “Amended Loan Agreement”). Prior to the Sixth Amendment, the
Fifth Amendment to the Loan Agreement (the “Fifth Amendment”) bifurcated the outstanding principal of the Tranche 1 Advance
under the Loan Agreement into a “Tranche 1A Advance” and a “Tranche 1B Advance.” On the Closing Date, the Tranche
1B Advance was assigned to Domicilium and its affiliates.
The Sixth Amendment provides for additional borrowings
in an aggregate amount of $3,175,000 (the “Tranche 2 Advance”), which was provided in multiple payments between July 5,
2024 and July 15, 2024. The Tranche 2 Advance principal and any accrued interest is to be repaid by the Company as described below
pursuant to the Royalty and Revenue Sharing Agreement. Additionally, Domicilium provided the Borrower with a Bridge Loan Advance of $288,000
(the “Bridge Loan Advance”) on May 31, 2024.
Optional
Conversion of Tranche 1A Advance and Tranche 1B Advance. If a Qualified Financing (as defined in the Sixth Amendment) of at
least $7.0 million occurs prior to April 1, 2025 (the “Term Loan Maturity Date”), each of the Tranche 1A Lenders and
Tranche 1B Lenders (each as defined in the Sixth Amendment) shall have the option, to convert all or part of the debt relating to such
advance into fully paid and nonassessable shares of the Company Stock issued in such Qualified Financing at the same price per share equal
to the price per share paid by the other cash purchasers of the Company Stock sold in the Qualified Financing.
Mandatory
Conversion of Bridge Loan Advance and Tranche 2 Advance. If a Qualified Financing occurs on or prior to the Term Loan Maturity
Date, then the Mandatory Conversion Obligations (composed of all principal and interest accrued on the Bridge Loan Advance and Tranche
2 Advance, but excluding $100,000 of the Tranche 2 Advance) shall automatically convert into fully paid and nonassessable shares of the
Company common stock issued in such Qualified Financing at the same price per share paid by the other cash purchasers in the Qualified
Financing.
In connection with the Sixth Amendment, the reporting
covenant to permit the Company to deliver its audited financial statements for the fiscal year ended December 31, 2023, was amended
to be no later than November 29, 2024.
Amendment to Securities Purchase Agreement
On the Closing Date, the Securities Purchase Agreement,
dated January 9, 2024, by and between the Company and SD MF, as Purchaser, was amended (the “Amended Purchase Agreement”)
to provide the Purchaser with certain anti-dilution rights in the event of a Qualifying Dilutive Issuance (as defined in the Amended Purchase
Agreement) made by the Company within 15 months of the Closing Date.
Royalty and Revenue Sharing Agreement
On the Closing Date, as a condition of SD MF’S
entry into the Sixth Amendment and in consideration of the Tranche 2 Advance, the Borrowers and Eloxx Pharmaceuticals, Ltd., a wholly
owned subsidiary of the Company, entered into a Royalty and Revenue Sharing Agreement (“Royalty Agreement”) with SD MF. Capitalized
terms under this heading “Royalty and Revenue Sharing Agreement” not otherwise defined herein have the definitions
ascribed to them in the Royalty Agreement.
Under the Royalty Agreement, the Company has agreed
to pay to Domicilium, an amount equal to (i) (x) 33% of the Development and Launch Milestone Payments for the three next occurring
Development and Launch Milestone Events (as defined in the Almirall License Agreement) being “Milestone Numbers” 1, 2, and
3 described in the Almirall License Agreement, minus (y) the amounts required to be paid by the Company pursuant to certain vendors
as defined in the Royalty Agreement, and (ii) (x) 25% of (1) each subsequent Development and Launch Milestone Payment plus
(2) any Priority Review Voucher Income (as defined in the Almirall License Agreement) realized by Eloxx, less (y) any amount
of such Development and Launch Milestone Payments which are due to Harvard University pursuant to the Harvard License Agreement, provided
the aggregate amount paid to Domicilium shall not exceed $53.0 million. Each Milestone Sharing Payment shall be applied as a repayment
or prepayment, as applicable, of the Loans (as defined in the Amended Loan Agreement) (including all interest and fees thereon) owed to
Domicilium, if any such Loans remain outstanding.
The Royalty Agreement provides for an amount based
on a percentage of the aggregate of (without duplication) the Net Sales, Royalties and any other income or revenue realized by the Company
solely related to or arising from the ELX-02 Compound or any ELX-02 Product, calculated in accordance with GAAP (collectively, the “ELX-02
Revenue”) (the “ELX-02 Revenue-Based Payment”). The ELX-02 Revenue-Based Payment with respect to each Fiscal Quarter
shall be 0.75% of ELX-02 Revenue during the applicable fiscal quarter. Commencing on the ZKN-013 royalty commencement date, the Company
promises to pay to Domicilium, an amount based on a percentage of the aggregate of (without duplication) the net sales, royalties and
any other income or revenue realized by the Company solely related to or arising from the ZKN-013 Compound, calculated in accordance with
GAAP (collectively, the “ZKN-013 Revenue”). The ZKN-013 revenue-based payment with respect to each fiscal quarter shall be
0.50% of ZKN-013 Revenue during the applicable fiscal quarter.
Equity
Participation Right. In the event that Company or subsidiaries issues or sells, or agrees to issue or sell, any equity interests
to any purchaser in connection with any equity financing entered into for the primary purpose of raising capital for the Company, the
Company shall offer up to 10% of such equity interests to Domicilium at the price and on such other terms which the purchaser is acquiring
the equity interests,
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of
a Registrant. |
The information set forth above in Item 1.01 of
this Current Report on Form 8-K regarding the financial obligations of the Company under the Amended Loan Agreement is incorporated
into this Item 2.03 by reference.
Forward-Looking Statements
This Form 8-K contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained
in this Form 8-K, including without limitation, statements regarding the Company’s expected performance under the terms of
the Amended Loan Agreement and the Royalty Agreement, the anticipated benefits of the Royalty Agreement, and expectations about the achievement
of key milestones and the Company’s payment of any milestone, royalty, or other payments under the Royalty Agreement are forward-looking
statements. Forward-looking statements can be identified by the words “aim,” “may,” “will,” “would,”
“should,” “expect,” “explore,” “plan,” “anticipate,” “could,”
“intend,” “target,” “project,” “contemplate,” “believe,” “estimate,”
“predict,” “potential,” “seeks,” or “continue” or the negative of these terms similar
expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on management’s
current plans, estimates, assumptions and projections based on information currently available to us. Forward-looking statements are subject
to known and unknown risks, uncertainties and assumptions, and actual results or outcomes may differ materially from those expressed or
implied in the forward-looking statements due to various important factors, including, but not limited to:; the Company’s ability
to obtain the capital necessary to fund the Company’s operations and repay amounts outstanding under the Amended Loan Agreement;
the Company’s ability to maintain compliance with the covenants contained in the Amended Loan Agreement and the terms of the Royalty
Agreement; the Company’s ability to obtain financing in the future through product licensing, public or private equity or debt financing
or otherwise; the Company’s ability to remain listed on the OTC Markets; general business conditions, regulatory environment, competition
and market for the Company’s products; and business ability and judgment of personnel, and the availability of qualified personnel
and other important factors discussed under the caption “Risk Factors” in the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2023, as any such factors may be updated from time to time in the Company’s other
filings with the SEC, accessible on the SEC’s website at www.sec.gov and the “Financials & Filings” page of
the Company’s website at https://investors.eloxxpharma.com/financials-filings.
All forward-looking statements speak only as of
the date of this Form 8-K and, except as required by applicable law, the Company has no obligation to update or revise any forward-looking
statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
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.
Date: July 16, 2024 |
ELOXX PHARMACEUTICALS, INC. |
|
|
|
|
|
By: |
/s/ Sumit Aggarwal |
|
Name: |
Sumit Aggarwal |
|
Title: |
President and Chief Executive Officer |
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Eloxx Pharmaceuticals (CE) (USOTC:ELOX)
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De Nov 2024 à Déc 2024
Eloxx Pharmaceuticals (CE) (USOTC:ELOX)
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