Eloxx Pharmaceuticals Secures Funding via Convertible Notes

TL;DR

Eloxx just got a cash infusion via convertible notes, watch for dilution!

AI Summary

On July 10, 2024, Eloxx Pharmaceuticals, Inc. entered into a Material Definitive Agreement, specifically a Convertible Senior Secured Promissory Note Purchase Agreement with certain investors. This agreement involves the issuance of convertible senior secured promissory notes, creating a direct financial obligation for the company.

Why It Matters

This filing indicates Eloxx Pharmaceuticals has secured new financing through convertible notes, which could impact its financial structure and future equity dilution.

Risk Assessment

Risk Level: medium — The issuance of convertible notes introduces financial obligations and potential future equity dilution, which carries inherent risks for existing shareholders.

Key Players & Entities

• Eloxx Pharmaceuticals, Inc. (company) — Registrant
• July 10, 2024 (date) — Date of earliest event reported
• Convertible Senior Secured Promissory Note Purchase Agreement (agreement) — Material Definitive Agreement

FAQ

Key Financial Figures

• $0.01 — e on which registered Common Stock, $0.01 par value per share ELOX OTC Pink Mar
• $3,175,000 — al borrowings in an aggregate amount of $3,175,000 (the "Tranche 2 Advance"), which was pr
• $288,000 — Borrower with a Bridge Loan Advance of $288,000 (the "Bridge Loan Advance") on May 31,
• $7.0 million — ned in the Sixth Amendment) of at least $7.0 million occurs prior to April 1, 2025 (the "Ter
• $100,000 — ce and Tranche 2 Advance, but excluding $100,000 of the Tranche 2 Advance) shall automat
• $53.0 million — unt paid to Domicilium shall not exceed $53.0 million. Each Milestone Sharing Payment shall b

Filing Documents

• tm2419633d1_8k.htm (8-K) — 40KB
• 0001104659-24-080251.txt ( ) — 251KB
• elox-20240710.xsd (EX-101.SCH) — 3KB
• elox-20240710_def.xml (EX-101.DEF) — 26KB
• elox-20240710_lab.xml (EX-101.LAB) — 35KB
• elox-20240710_pre.xml (EX-101.PRE) — 24KB
• tm2419633d1_8k_htm.xml (XML) — 5KB

01 Entry into a Material Definitive Agreement

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 def

03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of

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

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 "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 enviro

SIGNATURES

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

View Full Filing

View this 8-K filing on SEC EDGAR