UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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(1) On August 26, 2022, Endo International plc’s ordinary shares, which previously traded on the Nasdaq Global Select Market under the symbol ENDP, began trading exclusively on the market under the symbol ENDPQ. On September 14, 2022, Nasdaq filed a Form 25-NSE with the United States Securities and Exchange Commission and Endo International plc’s ordinary shares were subsequently delisted from the Nasdaq Global Select 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).
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 7.01. | Regulation FD Disclosure. |
As previously reported, in August 2022, Endo Ventures Limited (“EVL”) filed an adversary proceeding (the “Nevakar Litigation”) within the ongoing chapter 11 proceedings of Endo International plc (the “Company”) and certain of its affiliates (collectively, the “Debtors”) against Nevakar, Inc. and Nevakar Injectables Inc. (collectively, “Nevakar”) to enforce (i) a 2018 development, license and commercialization agreement (the “2018 Nevakar Agreement”) and (ii) an agreement for EVL to acquire six development-stage ready-to-use injectable product candidates from Nevakar Injectables, Inc. (the “2022 Nevakar Agreement”). In September 2022, Nevakar filed counterclaims against EVL.
Cleansing Materials
In November 2022, EVL and Nevakar reached a settlement in principle with respect to the Nevakar Litigation (the “Nevakar Settlement”), subject to definitive documentation and receipt of certain approvals. Pursuant to the proposed Nevakar Settlement, the 2018 Nevakar Agreement will be amended to revoke EVL’s license of two products covered by the 2018 Nevakar Agreement, modify EVL’s license to the remaining three products covered by the 2018 Nevakar Agreement to reduce the royalty owed to Nevakar, terminate any obligations of EVL to make payments to Nevakar upon achievement of contingent milestones, and eliminate Nevakar’s ability to terminate such licenses for EVL’s breach or material breach. EVL and Nevakar will also agree to a mutual release of certain claims under both the 2018 Nevakar Agreement and the 2022 Nevakar Agreement. The Nevakar Settlement is subject to, among other things, approval from the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors intend to file a motion seeking the Bankruptcy Court’s approval of the settlement agreement entered into on December 21, 2022 by EVL and Nevakar with respect to the Nevakar Litigation (the “Settlement Agreement”).
In connection with the proposed Nevakar Settlement, the Company provided materials (the “Cleansing Materials”) including a summary description of the terms of the proposed Nevakar Settlement to an ad hoc group (the “Ad Hoc First Lien Group”) of certain creditors that hold the Company’s first lien debt and are party to that certain Restructuring Support Agreement, dated as of August 16, 2022. The Company previously entered into confidentiality agreements (collectively, the “NDAs”) with the Ad Hoc First Lien Group. Pursuant to the NDAs, the Company has agreed to publicly disclose certain information, including the Cleansing Materials, upon the occurrence of certain events as set forth in the NDAs. A copy of the Cleansing Materials is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K. The Cleansing Materials are based solely on information available to the Company as of the date such materials were provided to the Ad Hoc First Lien Group.
The information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this Current Report on Form 8-K may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation, including, but not limited to, statements with respect to documents filed with the Bankruptcy Court and the chapter 11 proceedings, and any other statements that refer to the Company’s expected, estimated or anticipated future results or that do not relate solely to historical facts. Statements including words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “will,” “may,” “look forward,” “intend,” “guidance,” “future,” “potential” or similar expressions are forward-looking statements. All forward-looking statements in this communication reflect the Company’s current views as of the date of this communication about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to it and on assumptions it has made. Actual results may differ materially and adversely from current expectations based on a number of factors, including, among other things, the outcome of the Company’s contingency planning and restructuring activities; the timing, impact or
results of any pending or future litigation, investigations, proceedings or claims, including opioid, tax and antitrust related matters; actual or contingent liabilities; settlement discussions or negotiations, including the Nevakar Settlement and its acceptance by the Bankruptcy Court; the Company’s liquidity, financial performance, cash position and operations; the Company’s strategy; risks and uncertainties associated with chapter 11 proceedings; the negative impacts on the Company’s businesses as a result of filing for and operating under chapter 11 protection; the time, terms and ability to confirm a sale of the Company’s businesses under Section 363 of the U.S. Bankruptcy Code; the adequacy of the capital resources of the Company’s businesses and the difficulty in forecasting the liquidity requirements of the operations of the Company’s businesses; the unpredictability of the Company’s financial results while in chapter 11 proceedings; the Company’s ability to discharge claims in chapter 11 proceedings; negotiations with the holders of the Company’s indebtedness and its trade creditors and other significant creditors; and risks and uncertainties with performing under the terms of the restructuring support agreement and any other arrangement with lenders or creditors while in chapter 11 proceedings. The Company expressly disclaims any intent or obligation to update these forward-looking statements, except as required to do so by law.
Additional information concerning risk factors, including those referenced above, can be found in press releases issued by the Company, as well as the Company’s public periodic filings with the U.S. Securities and Exchange Commission and with securities regulators in Canada, including the discussion under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or other filings with the U.S. Securities and Exchange Commission. Copies of the Company’s press releases and additional information about the Company are available at www.endo.com or you can contact the Company’s Investor Relations Department at relations.investor@endo.com.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Number |
Description | |
| 99.1 | Cleansing Materials | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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.
| ENDO INTERNATIONAL PLC | ||
| By: | /s/ Matthew J. Maletta | |
| Name: | Matthew J. Maletta | |
| Title: | Executive Vice President, Chief Legal Officer and Company Secretary | |
Dated: December 22, 2022
Exhibit 99.1 Nevakar Litigation Update December 20, 2022 Confidential Cleansing Material Subject to FRE 408 & State Law Equivalents Preliminary and Subject to Material Change endo.com
Disclaimer This document has been prepared by Endo International plc (“Endo” or the “Company”) and its advisors from information provided by Company management and other sources, and is subject in all respects to the confidentiality agreement you have executed with the Company. All communications or inquiries relating to Endo or its affiliates should be directed to its advisors. No personnel of Endo or its affiliates should be contacted under any circumstances. This document is “as is” and is based, in part, on information obtained from other sources. We have assumed and relied upon the accuracy and completeness of such information for purposes of this document and have not independently verified any such information. Neither we nor any of our affiliates or agents, makes any representation or warranty, express or implied, in relation to the accuracy or completeness of the information contained in this document or any oral information provided in connection herewith, or any data it generates and expressly disclaim any and all liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information or any errors or omissions therein. Any views or terms contained herein are preliminary, and are based on financial, economic, market and other conditions prevailing as of the date of this document and are subject to change. We undertake no obligations or responsibility to update any of the information contained in this document. Past performance does not guarantee or predict future performance. This document does not constitute an offer to sell or the solicitation of an offer to buy any security, nor does it constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite or purchase or act as an agent or advisor or in any other capacity with respect to any transaction, or commit capital, or to participate in any trading strategies, and does not constitute legal, regulatory, accounting or tax advice to the recipient. This document does not constitute and should not be considered as any form of financial opinion or recommendation by us or any of our affiliates. This document is not a research report and should not be construed as such. This document is for informational purposes only and does not purport to contain all of the information that may be required to evaluate a possible decision with respect to a transaction involving the Company or any of its indebtedness. The Company and all of its respective affiliates, directors, officers, employees and advisers do not make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document or any other written, oral or other communications transmitted or otherwise made publicly available. This document is not intended to be all-inclusive or to contain all the information that a person may desire in considering a transaction and is not intended to form the basis for entering into such a transaction. You should consult your own legal, regulatory, tax, business, financial and accounting advisors to the extent you deem necessary and must make your own decision and perform your own independent investigation and analysis of the information and topics covered in this document. The information contained in this document is preliminary in nature and is subject to change, and any such changes may be material. Except as otherwise expressly noted herein, this document speaks as of the date noted on the title page. The delivery of this document does not create any implication that there has been no change in the business and affairs of Endo or its affiliates since such date. Neither Endo, its advisors, nor any of their respective affiliates or representatives undertake any obligation to update any of the information contained herein or to correct any inaccuracies or omissions that may become apparent. This document (i) has been prepared at the direction of the Company, (ii) from materials and information supplied by the Company and from other sources, (ii) contains confidential information, (iii) is being delivered for informational purposes only on a confidential basis and (iv) does not purport to contain all of the information that may be required or relevant to your evaluation of any potential transaction. You are responsible for conducting your own investigation and analysis and should consult your own professional advisors. By accepting this document, you agree that (i) neither you nor your agents, representatives, directors or employees will copy, reproduce or distribute to others this document, in whole or in part, at any time; (ii) you will keep confidential all information contained herein; and (iii) you will not use this document for any purpose, other than deciding whether to proceed with a further investigation of the Company or any transaction involving the Company or any of its indebtedness. Certain statements in this document may constitute “forward-looking statements” within the meaning of the federal securities laws. The Company’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements include, but are not limited to, statements regarding the Company or expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “budget,” “forecast,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “could,” “strive,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of the Company’s annual report filed with the Securities and Exchange Commission (the “SEC”) and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Most of these factors are outside the Company’s control and are difficult to predict. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Readers are cautioned not to put undue reliance on forward-looking statements, and no person assumes any obligation and no person intends to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. No assurance is given that the Company will achieve its expectations. 1
Settlement In Principle with Nevakar ► In resolution of their dispute, Endo and Nevakar (“NVK”) have agreed to amend their 2018 Agreement and grant a mutual release of claims. ► The terms of the amendment are summarized below: Topic Existing 2018 Agreement Amended 2018 Agreement Covered Endo licenses 5 products from NVK, and the Endo licenses 3 products from NVK, with no Products parties must jointly develop them obligation for joint development Lower royalty on net profit (as defined in the Royalties Higher royalties on net profit on all 5 products amendment) on the 3 retained products Contingent payments owed to NVK upon Milestones Milestone payments terminated achievement of certain milestones Future NVK has ability to terminate 2018 Agreement Litigation No ability to terminate licenses for a future Endo material breach Profile 2
The proposed settlement achieves multiple positive outcomes Forecasted Gross Profit ($million) ► The settlement provides certainty of outcome and avoids the cost and hazards of litigation. June 2022 Mgt. Presentation [a] Year Pre-Settle Post-Settle ► The settlement allows both parties to minimize the need for any future 2022 $ 1 $ 1 cooperation. 2023 20 20 ► The settlement is incrementally gross profit 2024 40 50 positive based on the previously disclosed projections reflected in the supplement to 2025 55 65 the June 2022 Management Presentation. 2026 50 60 Total $ 165 $ 195 Impact $ ‒ $ 30 3 [a] Forecasted gross profit is on a risk-adjusted basis consistent with the June 2022 Management Presentation