Oaktree Capital Group, LLC 6.625% PFD UT A (OAK-PA) SC 13D/AIMPEL PHARMACEUTICALS / Oaktree Capital ownership change

This Amendment No. 1 (this “Amendment No. 1”) to the statement of beneficial ownership on Schedule 13D amends and supplements the statement of beneficial ownership on Schedule 13D filed by the Reporting Persons on September 15, 2023 (the “Original Schedule 13D”, and together with this Amendment No. 1, the “Schedule 13D”). Except as amended in this Amendment No. 1, the Original Schedule 13D remains in full force and effect. Terms defined in the Original Schedule 13D are used in this Amendment No. 1 as so defined in the Original Schedule 13D, unless otherwise defined in this Amendment No. 1.

Item 3 is hereby amended to add the following after the second sentence of Item 3 of the Original Schedule 13D:

In addition, on October 2, 2023, the Issuer issued to the Oaktree Holders immediately exercisable warrants to acquire an aggregate of 445,293 shares of Common Stock at an exercise price per share of $0.01, in connection with the Issuer’s borrowing of an additional $2.5 million in aggregate principal amount of tranche B term loans.

 Item 4 is hereby amended and restated in its entirety as follows:

On September 5, 2023, the Issuer entered into the Second Amendment to Credit Agreement and Guaranty and Revenue Interest Financing Agreement (the “Second Amendment”) with Oaktree Fund Administration, LLC as administrative agent (the “Administrative Agent”), the Oaktree Holders, as existing lenders, and certain other lenders party thereto (collectively, the “Lenders”), which amends the Issuer’s (i) Credit Agreement and Guaranty dated March 17, 2022, as amended on August 21, 2023 (the “Original Agreement” and, as amended by the Second Amendment and the Third Amendment (as defined below), the “Amended Credit Agreement”), and (ii) the Revenue Interest Financing Agreement dated March 17, 2022, as amended on August 21, 2023. The Amended Credit Agreement provides for an aggregate principal loan amount to the Issuer by the Lenders of approximately $121.5 million, including up to $20 million in additional cash proceeds to the Issuer from the making of additional term loans, the exchange of approximately $96.5 million of outstanding principal under the Original Agreement, and an in-kind forbearance fee of $5.0 million.

Pursuant to the Second Amendment, the Issuer borrowed $4,500,000 of tranche B term loans at signing (in addition to $3,000,000 previously funded on August 21, 2023) and was granted the right to draw up to $12,500,000 more in additional tranche B term loans over the course of 2023, subject to the Issuer’s achievement of certain strategic transaction process milestones, satisfaction of minimum net revenue and product units sold covenants and satisfaction of certain other covenants and conditions specified in the Second Amendment.

Under the Second Amendment, the first lien tranche A provides for loans in an aggregate original principal loan of $101.5 million, consisting of $51.4 million exchanged for existing tranche A-1 term loans, a $5.0 million forbearance fee, $9.1 million exchanged for existing tranche A-2 term loans, and $36.0 million exchanged for the right to future revenue interest payments. The first lien tranche B provides for loans in an aggregate original principal loan of $20.0 million.

Interest will be paid in kind (PIK) on both the tranche A and tranche B term loans through the end of the forbearance period, which was extended to December 31, 2023, under the Second Amendment, and accrues at SOFR + 10.75%. The first lien tranche B is entitled to a 2x multiple on invested capital. The tranche A lenders and tranche B lenders will be entitled to be repaid a maximum aggregate amount of approximately $141.5 million (assuming the entire $20.0 million of tranche B loans are funded), plus PIK interest on the tranche A term loan.

The amounts outstanding under the Second Amendment are secured and collateralized by all of the Issuer’s assets. The Second Amendment also provides for certain modifications to the existing covenants, including additional reporting obligations, minimum net revenue and product units sold covenants and additional milestones. In addition, the Second Amendment includes customary events of default, the occurrence of which could result in termination of the Lenders’ commitments or the acceleration of the Issuer’s obligations under the Second Amendment.

Pursuant to the Amended Credit Agreement, the Issuer agreed to issue to the tranche B lenders, from time to time, warrants to purchase up to an aggregate of 4,749,800 shares of Common Stock, representing warrant coverage equal to an aggregate 19.99% of the Issuer’s outstanding shares of Common Stock as of the date thereof (the “Tranche B Warrants”). The Tranche B Warrants are to be issued to each tranche B lender upon each borrowing of tranche B term loans in proportion to the amount of tranche B term loans funded by such tranche B lender. In consideration for the funding of $4.5 million and $3 million of tranche B term loans on September 5, 2023 and August 21, 2023, respectively, or 37.5% of the original principal amount of the tranche B term loan, Tranche B Warrants exercisable for an aggregate of 1,781,175 shares of Common Stock, or 37.5% of the aggregate warrant coverage amount, were issued to the tranche B lenders at signing of the Second Amendment on September 5, 2023. The Issuer agreed that Tranche B Warrants exercisable for up to the remaining 2,968,625 shares of Common Stock, or 62.5% of the aggregate warrant coverage amount, would be issued to the tranche B lenders on a pro rata basis in connection with each subsequent draw, if any, by the Issuer of the tranche B term loans as described in the Amended Credit Agreement.

In their capacity as tranche B lenders, the Oaktree Holders were issued Tranche B Warrants pursuant to warrant certificates exercisable for an aggregate of 1,335,881 shares of Common Stock at the signing of the Second Amendment on September 5, 2023 (the “Tranche 1 Warrants”). In connection with the Issuer’s draw of an additional $5 million of tranche B term loans in connection with the Third Amendment, the Oaktree Holders were issued additional Tranche B Warrants pursuant to warrant certificates exercisable for an aggregate of 890,588 shares of Common Stock (collectively and together with the Tranche 1 Warrants, the “Warrants”). The Oaktree Holders may be issued additional Tranche B Warrants exercisable for up to an additional 1,335,881 shares of Common Stock from time to time as provided in the Amended Credit Agreement.

The Warrants are exercisable, in full or in part, at any time prior to the seventh (7^th) anniversary of their issuance or the consummation of a Change of Control (as defined in the Warrants), whichever occurs earlier, at an exercise price of $0.01 per share, provided that for so long as the Common Stock is listed on a public trading exchange, unless and until the Issuer obtains shareholder approval, the Warrants may only be exercised to the extent all Tranche B Warrants then outstanding are simultaneously exercised in accordance with their terms. The Warrants are subject to anti-dilution adjustments in the event of certain future subdivisions (by any stock split, recapitalization or otherwise), combinations or similar events, any capital reorganization, reclassification, consolidation or merger or other similar transaction of the Issuer that does not constitute a Change of Control as set forth in the Warrants. The Warrants may be exercised for cash in an amount equal to the aggregate exercise price, or in lieu of paying the aggregate exercise price, the Oaktree Holders may elect a cashless exercise in accordance with the terms of the Warrants. Prior to the issuance of shares of Common Stock upon exercise of the Warrants, the Oaktree Holders are not entitled to vote or be deemed the holder of shares of Common Stock, however the Oaktree Holders are entitled to receive, simultaneously with holders of the Common Stock, dividends and other distributions made to such holders of Common Stock.

Each of the Reporting Persons acquired the Warrants for investment purposes. The Reporting Persons will continuously evaluate the Issuer’s businesses, strategies, prospects, management, governance, operations, performance, financial matters, capital structure and prospects, market positions, strategic and other transactions (including transactions involving one or more of the Reporting Persons and/or their respective affiliates and/or portfolio companies and/or other stockholders of the Issuer), director and officer incentive programs, corporate governance decisions by the Issuer’s management and the Board of Directors of the Issuer (the “Board”), alternative investment opportunities, changes in law and/or regulations, general industry or economic conditions and all other factors that may increase the value of the Issuer’s securities beneficially owned by the Reporting Persons or that may be deemed relevant in determining whether additional securities will be acquired by the Reporting Persons or, if applicable, their affiliates or whether the Reporting Persons or, if applicable, any such affiliates will dispose of shares of Common Stock or other securities of the Issuer. Depending on such factors, at any time, the Reporting Persons may acquire shares of Common Stock or other securities of the Issuer in addition to the shares of Common Stock underlying the Warrants, including, without limitation, a controlling position in the Common Stock or some or all of the shares of Common Stock or other securities that are beneficially owned by the Reporting Persons may be sold, in either case in the open market, in privately negotiated transactions or otherwise. The Reporting Persons may also seek to modify the terms of the Issuer’s securities held by them, through various transactions, including, without limitation, refinancing or derivative transactions, provide additional capital or debt financing to the Issuer, or pledge their interests in the Issuer’s securities as collateral for liquidity purposes.

Other than as described in this Schedule 13D, none of the Reporting Persons and, to the best of their knowledge, none of the Covered Persons has any current plans or proposals which relate to or would result in any of the matters described in Items 4(a)-(j) of Schedule 13D. However, as part of their ongoing evaluation of their investment in the Issuer and investment alternatives, the Reporting Persons may consider such matters in the future and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, the Reporting Persons may hold discussions with or make informal recommendations or formal proposals to Issuer’s management or the Board, including any special committees of the Board and their respective advisors, other holders of the Issuer’s securities, industry analysts, financial sponsors, existing or potential strategic partners, sources or potential sources of capital and other third parties regarding such matters.

Pursuant to Rule 13d-4 of the Act, the Reporting Persons declare that filing this statement shall not be construed as an admission that any such person is, for the purposes of Section 13(d) and/or Section 13(g) of the Act, the beneficial owner of any securities covered by this statement.

All such ownership percentages of the securities reported herein are based upon 25,975,474 shares of Common Stock outstanding, calculated based on the sum of (i) 23,749,005 shares of Common Stock issued and outstanding as of August 15, 2023, as reported by the Issuer in its Form 10-Q filed with the SEC on August 18, 2023, and (ii) 2,226,469 shares of Common Stock issuable upon full exercise of the Warrants held by the Oaktree Holders.

Oaktree Capital Group, LLC, in its capacity as the indirect manager of Oaktree Strategic Credit Fund, may be deemed to beneficially own the 212,294 shares of Common Stock issuable upon exercise of the Warrants held directly by Oaktree Strategic Credit Fund;

Atlas OCM Holdings, LLC in its capacity as the indirect manager of Oaktree-TCDRS Strategic Credit, LLC, Oaktree-Forrest Multi-Strategy, LLC, Oaktree-TBMR Strategic Credit Fund C, LLC, Oaktree-TBMR Strategic Credit Fund F, LLC, Oaktree-TBMR Strategic Credit Fund G, LLC, Oaktree-TSE 16 Strategic Credit, LLC, INPRS Strategic Credit Holdings, LLC, Oaktree Gilead Investment Fund AIF (Delaware), L.P., Oaktree Specialty Lending Corporation, Oaktree GCP Fund Delaware Holdings, L.P., Oaktree AZ Strategic Lending Fund, L.P., Oaktree Loan Acquisition Fund, L.P., Oaktree PRE Life Sciences Fund, L.P., Oaktree Diversified Income Fund Inc., Oaktree LSL Fund Holdings EURRC S.a r.l., and Oaktree LSL Fund Delaware Holdings EURRC, L.P. (the “Atlas Entities”), may be deemed to beneficially own the 2,014,175 shares of Common Stock issuable upon exercise of the Warrants held directly by the Atlas Entities;

Brookfield Corporation, in its capacity as the indirect owner of the class A units of Oaktree Capital Group, LLC, may be deemed to beneficially own the 212,294 shares of Common Stock issuable upon exercise of the Warrants held directly by Oaktree Strategic Credit Fund;

BAM Partners Trust, in its capacity as the sole owner of Class B Limited Voting Shares of Brookfield Corporation, may be deemed to beneficially own the 212,294 shares of Common Stock issuable upon exercise of the Warrants held directly by Oaktree Strategic Credit Fund; and

Brookfield Asset Management ULC, in its capacity as the indirect owner of Class A units of Atlas OCM Holdings, LLC, may be deemed to beneficially own the 2,014,175 shares of Common Stock issuable upon exercise of the Warrants held directly by the Atlas Entities.

With respect to the Warrants exercisable immediately for shares of Common Stock reported herein, each of the Reporting Persons may be deemed to have shared voting and dispositive power or the shared power to direct the vote and disposition of the number of Warrants exercisable immediately for shares of Common Stock which such Reporting Person may be deemed to beneficially own as set forth above.

Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by any of the Reporting Persons that it is the beneficial owner of any of the Warrants exercisable immediately for shares of Common Stock referred to herein for the purposes of Section 13(d) of the Act, or for any other purpose, and such beneficial ownership is expressly disclaimed by each Reporting Person, other than each Oaktree Holder with respect to securities reported as directly held by such Oaktree Holder.