Scilex pany(SCLX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents Scilex Holding Company's unaudited consolidated financial statements and notes on operations, accounting, liquidity, and recent events Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific points in time Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------------ | | Cash and cash equivalents | $4,099 | $3,272 | | Accounts receivable, net | $16,767 | $26,442 | | Inventory | $2,519 | $2,436 | | Prepaid expenses and other current assets | $10,286 | $9,397 | | Total current assets | $33,671 | $41,547 | | Property and equipment, net | $705 | $708 | | Operating lease right-of-use asset | $1,868 | $2,225 | | Intangibles, net | $31,443 | $32,453 | | Investments | $2,468 | $2,420 | | Goodwill | $13,481 | $13,481 | | Other long-term assets | $119 | $119 |\ | Total assets | $83,755 | $92,953 | | | | | | LIABILITIES AND STOCKHOLDERS' DEFICIT (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------------ | | Accounts payable | $59,155 | $52,620 | | Accrued payroll | $1,633 | $1,505 | | Accrued rebates and fees | $192,940 | $162,517 | | Accrued expenses | $6,548 | $2,841 | | Current portion of deferred consideration | $427 | $447 | | Debt, current | $39,871 | $34,876 | | Purchased revenue liability, current | $4,590 | $4,115 | | Current portion of operating lease liabilities | $768 | $714 | | Total current liabilities | $305,932 | $259,635 | | Long-term portion of deferred consideration | $2,240 | $2,448 | | Debt, net of issuance costs | — | $845 | | Purchased revenue liability, net of current portion | $3,010 | $2,685 | | Derivative liabilities | $20,269 | $18,303 | | Operating lease liabilities, net of current portion | $1,126 | $1,523 | | Other long-term liabilities | $165 | $155 | | Total liabilities | $332,742 | $285,594 | | Total stockholders' deficit | $(248,987) | $(192,641) | | Total liabilities and stockholders' deficit | $83,755 | $92,953 | Condensed Consolidated Statements of Operations This section details the company's financial performance over specific periods, showing revenues, expenses, and net loss Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $9,896 | $16,370 | $14,900 | $27,254 | | Cost of revenue | $3,272 | $4,390 | $4,656 | $8,230 | | Research and development | $6,187 | $2,004 | $8,643 | $5,112 | | Selling, general and administrative | $19,841 | $24,598 | $47,901 | $53,876 | | Intangible amortization | $1,008 | $1,001 | $2,010 | $2,028 | | Legal settlements | $95 | — | $95 | $(6,891) | | Total net operating costs and expenses | $30,403 | $31,993 | $63,305 | $62,355 | | Loss from operations | $(20,507) | $(15,623) | $(48,405) | $(35,101) | | Loss on derivative liability | $12,375 | $15,284 | $1,966 | $15,741 | | Change in fair value of debt and liability instruments | $8,366 | $6,099 | $14,480 | $10,004 | | Interest expense, net | $2,682 | $571 | $5,163 | $1,102 | | Loss on foreign currency exchange | $99 | $5 | $95 | $11 | | Total other expense | $23,522 | $21,959 | $21,704 | $26,858 | | Loss before income taxes | $(44,029) | $(37,582) | $(70,109) | $(61,959) | | Income tax expense | $19 | — | $19 | — | | Net loss | $(44,048) | $(37,582) | $(70,128) | $(61,959) | | Deemed dividend | $(43,753) | — | $(43,753) | — | | Net loss attributable to common stockholders | $(86,061) | $(37,582) | $(112,141) | $(61,959) | | Net loss per share attributable to common stockholders — basic and diluted | $(7.42) | $(7.67) | $(9.68) | $(15.49) | | Weighted average number of shares during the period — basic and diluted | 11,595 | 4,901 | 11,580 | 3,999 | Condensed Consolidated Statements of Stockholders' Deficit This section outlines changes in the company's equity over time, including net loss, stock-based compensation, and treasury stock movements - The company's total stockholders' deficit increased from $(192,641) thousand as of December 31, 2024, to $(248,987) thousand as of June 30, 2025, primarily due to a net loss of $(42,308) thousand and a deemed dividend of $(43,753) thousand related to anti-dilution adjustments for Penny Warrants upon a Reverse Stock Split[25][23][36] - Stock-based compensation contributed $3,314 thousand and $3,279 thousand to additional paid-in capital during the periods ending March 31, 2025, and June 30, 2025, respectively[25] - Treasury stock decreased from $(90,522) thousand to $(76,915) thousand, reflecting transfers for Tranche B Notes deferral, Gloperba Ex-U.S. License, and Oramed Note maturity extension[25] Condensed Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities, showing the net change in cash Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash proceeds from operating activities | $13,057 | $11,702 | | Net cash used for investing activities | $(548) | $(300) | | Net cash used for financing activities | $(11,682) | $(6,465) | | Net change in cash, cash equivalents and restricted cash | $827 | $4,937 | | Cash, cash equivalents and restricted cash at beginning of period | $3,272 | $4,729 | | Cash, cash