Scilex Holding Co. 10-Q: Notes, Agreements Detailed

TL;DR

Scilex 10-Q out: New notes issued Oct 8, royalty deals inked. Keep an eye on these.

AI Summary

Scilex Holding Co. filed its 10-Q for the period ending September 30, 2024. The filing details various financial agreements and activities, including a Royalty Purchase Agreement with Scilex Pharma and the issuance of Senior Secured Convertible Notes on October 8, 2024. The company's fiscal year ends on December 31st.

Why It Matters

This filing provides insight into Scilex Holding Co.'s ongoing financial arrangements and potential future obligations, which could impact its stock performance.

Risk Assessment

Risk Level: medium — The filing details complex financial instruments and agreements, suggesting potential financial risks and uncertainties for the company.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the financial period covered by the report.)
• 2025-01-17 — Filing Date (Shows when the report was officially submitted to the SEC.)
• 2024-10-08 — Senior Secured Convertible Notes Date (Marks a significant event related to the company's debt financing.)

Key Players & Entities

• Scilex Holding Co. (company) — Filer of the 10-Q
• 2024-09-30 (date) — End of the reporting period
• 2025-01-17 (date) — Filing date
• 2024-10-08 (date) — Date of Senior Secured Convertible Notes issuance
• Scilex Pharma (company) — Party to a Royalty Purchase Agreement

FAQ

Key Financial Figures

• $0.0001 — ch registered Common Stock, par value $0.0001 per share SCLX The Nasdaq Stock Mar
• $11.50 — mon stock, each at an exercise price of $11.50 per share SCLXW The Nasdaq Stock Ma
• $0 — 2,885 shares of common stock, par value $0.0001, outstanding. SCILEX HOLDING COM

Filing Documents

• sclx-20240930.htm (10-Q) — 3499KB
• sclx-ex31_1.htm (EX-31.1) — 13KB
• sclx-ex31_2.htm (EX-31.2) — 12KB
• sclx-ex32_1.htm (EX-32.1) — 12KB
• 0000950170-25-006755.txt ( ) — 13523KB
• sclx-20240930.xsd (EX-101.SCH) — 2156KB
• sclx-20240930_htm.xml (XML) — 2004KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations and Comprehensive Loss 2 Condensed Consolidated Statements of Stockholders' Deficit 3 Condensed Consolidated Statements of Cash Flows 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 39 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 61 Item 4.

Controls and Procedures

Controls and Procedures 61 PART II. OTHER INFORMATION 62 Item 1.

Legal Proceedings

Legal Proceedings 62 Item 1A.

Risk Factors

Risk Factors 63 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 82 Item 3. Defaults Upon Senior Securities 82 Item 4. Mine Safety Disclosures 82 Item 5. Other Information 82 Item 6. Exhibits 84

Signatures

Signatures 89 i SCILEX HOLDING COMPANY In this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the "Company", "Scilex", "we", "us", "our", and similar terms refer to Scilex Holding Company, a Delaware corporation formerly known as Vickers Vantage Corp. I ("Vickers"), and its consolidated subsidiaries. References to "Legacy Scilex" refer to the private Delaware corporation that is now our wholly owned subsidiary and named Scilex, Inc. (formerly known as "Scilex Holding Company"). On November 10, 2022, we consummated a business combination pursuant to the Agreement and Plan of Merger, dated as of March 17, 2022 (as amended, the "Merger Agreement"), by and among Vickers, Vantage Merger Sub Inc. ("Merger Sub"), a wholly owned subsidiary of Vickers, and Legacy Scilex. Pursuant to the terms of the Merger Agreement, the business combination (herein referred to as the "Business Combination" or "reverse recapitalization" for accounting purposes) between Vickers and Legacy Scilex was effected through the merger of Merger Sub with and into Legacy Scilex with Legacy Scilex surviving as Vickers's wholly owned subsidiary. In connection with the Business Combination, Vickers changed its name from Vickers Vantage Corp. I to Scilex Holding Company. Unless otherwise noted or the context requires otherwise, references to our "Common Stock" refer to our common stock, par value $0.0001 per share. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this Quarterly Report on Form 10-Q may constitute "forward-looking statements" for purposes of federal securities laws. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements appear in a number of places in this Quarterly Report on Form 10-Q including, without limitation, in the section titled " Management's Discussion and Analysis of Financial Condition and Results of Operation

Forward-looking statements in this Quarterly Report on Form 10-Q may include, but are not limited to, statements about

Forward-looking statements in this Quarterly Report on Form 10-Q may include, but are not limited to, statements about: our ability to maintain the listing of our Common Stock on the Nasdaq Capital Market; our public securities' liquidity and trading; our ability to raise financing in the future; our future use of equity or debt financings to execute our business strategy; our ability to use cash on hand to meet current and future financial obligations, including funding our operations, debt service requirements and capital expenditures; the outcome of any legal proceedings that may be instituted against us; our ability to attract and retain qualified directors, officers, employees and key personnel; our ability to compete effectively in a highly competitive market; the competition from larger biotechnology companies that have greater resources, technology, relationships and/or expertise; the ability to protect and enhance our corporate reputation and brand; the impact from future regulatory, judicial and legislative changes in our industry; our ability to obtain and maintain regulatory approval of any of our product candidates; ii our ability to research, discover and develop additional product candidates; our ability to grow and manage growth profitably; our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; our ability to execute our business plans and strategy; our ability to prevent, respond to, and recover from a cybersecurity incident; the effect of global economic and political developments, including the conflicts in Ukraine and Israel; and other factors detailed under the section titled "Risk Factors" in the Annual Report on Form 10-K, as updated by the risk factors described in the section of this Quarterly Report on Form 10-Q titled " Risk Factors. " Should one or more of these risks or uncertainties materialize or should any of the assumptions made by our ma

—FIN ANCIAL INFORMATION

PART I—FIN ANCIAL INFORMATION

Fin ancial Statements

Item 1. Fin ancial Statements SCILEX HOLDING COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for par value and share amounts) (Unaudited) September 30, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 77 $ 3,921 Accounts receivable, net 31,580 34,597 Inventory 2,404 4,214 Prepaid expenses and other 5,794 4,049 Total current assets 39,855 46,781 Property and equipment, net 711 722 Operating lease right-of-use asset 2,396 2,943 Intangibles, net 33,454 36,485 Investments 2,375 — Goodwill 13,481 13,481 Other long-term assets 8,158 897 Total assets $ 100,430 $ 101,309 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 43,400 $ 40,954 Accrued payroll 975 2,681 Accrued rebates and fees 141,709 89,658 Accrued expenses 9,671 7,408 Current portion of deferred consideration 458 491 Debt, current 84,636 108,429 Current portion of operating lease liabilities 688 759 Total current liabilities 281,537 250,380 Long-term portion of deferred consideration 2,556 2,895 Debt, net of issuance costs 14,332 17,038 Derivative liabilities 11,453 1,518 Operating lease liabilities 1,714 2,237 Other long-term liabilities 155 179 Total liabilities 311,747 274,247 Commitments and contingencies (See Note 11) Stockholders' deficit: Preferred stock, $ 0.0001 par value, 45,000,000 shares authorized; 29,057,097 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively — — Common stock, $ 0.0001 par value, 740,000,000 shares authorized; 191,790,520 shares issued and 131,721,935 shares outstanding as of September 30, 2024; 160,084,250 shares issued and 100,015,665 shares outstanding as of December 31, 2023 19 16 Additional paid-in capital 430,767 407,813 Accumulated other comprehensive income

View Full Filing

View this 10-Q filing on SEC EDGAR