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What changed in Scilex Holding Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Scilex Holding Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+1323 added−883 removedSource: 10-K (2026-04-10) vs 10-K (2025-03-31)

Top changes in Scilex Holding Co's 2025 10-K

1323 paragraphs added · 883 removed · 630 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

254 edited+366 added−117 removed183 unchanged
Biggest changeFin ancial Statements SCILEX HOLDING COMPANY CONSOLIDATED BALANCE SHEETS (In thousands, except for par value and share amounts) December 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 3,272 $ 3,921 Accounts receivable, net 26,442 34,597 Inventory 2,436 4,214 Prepaid expenses and other current assets 9,397 4,049 Total current assets 41,547 46,781 Property and equipment, net 708 722 Operating lease right-of-use asset 2,225 2,943 Intangibles, net 32,453 36,485 Investments 2,420 — Goodwill 13,481 13,481 Other long-term assets 119 897 Total assets $ 92,953 $ 101,309 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 52,620 $ 40,954 Accrued payroll 1,505 2,681 Accrued rebates and fees 162,517 89,658 Accrued expenses 2,841 7,408 Current portion of deferred consideration 447 491 Debt, current 34,876 108,429 Purchased revenue liability, current 4,115 — Current portion of operating lease liabilities 714 759 Total current liabilities 259,635 250,380 Long-term portion of deferred consideration 2,448 2,895 Debt, net of issuance costs 845 17,038 Purchased revenue liability, net of current portion 2,685 — Derivative liabilities 18,303 1,518 Operating lease liabilities, net of current portion 1,523 2,237 Other long-term liabilities 155 179 Total liabilities 285,594 274,247 Commitments and contingencies (See Note 11) Stockholders’ deficit: Preferred stock, $ 0.0001 par value, 45,000,000 shares authorized Series A, 29,057,097 shares issued and outstanding as of each of December 31, 2024 and December 31, 2023 — — Series 1, 5,000,000 shares declared as a stock dividend, not yet distributed as of December 31, 2024; no shares authorized, issued and outstanding as of December 31, 2023 1 — Common stock, $ 0.0001 par value, 740,000,000 shares authorized; 243,312,885 shares issued and 183,244,300 shares outstanding as of December 31, 2024; 160,084,250 shares issued and 100,015,665 shares outstanding as of December 31, 2023 24 16 Additional paid-in capital 454,591 407,813 Accumulated other comprehensive income 6,317 — Accumulated deficit ( 563,052 ) ( 490,245 ) Treasury stock, at cost; 60,068,585 shares as of each of December 31, 2024 and December 31, 2023 ( 90,522 ) ( 90,522 ) Total stockholders’ deficit ( 192,641 ) ( 172,938 ) Total liabilities and stockholders’ deficit $ 92,953 $ 101,309 See accompanying notes to audited consolidated financial statements F- 3 SCILEX HOLDING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except for net loss per share amounts) Year Ended December 31, 2024 2023 Net revenue $ 56,590 $ 46,743 Net operating costs and expenses: Cost of revenue 16,689 15,681 Research and development 9,641 12,746 Selling, general and administrative 119,016 119,641 Intangible amortization 4,031 4,106 Legal settlements ( 9,391 ) — Total net operating costs and expenses 139,986 152,174 Loss from operations ( 83,396 ) ( 105,431 ) Other (income) expense, net: (Gain) loss on derivative liability ( 17,378 ) 512 Change in fair value of debt and liability instruments 4,782 7,189 Interest expense, net 1,963 1,068 Loss on foreign currency exchange 45 118 Total other (income) expense, net ( 10,588 ) 8,887 Loss before income taxes ( 72,808 ) ( 114,318 ) Income tax (benefit) expense ( 1 ) 13 Net loss $ ( 72,807 ) $ ( 114,331 ) Net loss per share attributable to common stockholders — basic $ ( 0.56 ) $ ( 1.28 ) Net loss per share attributable to common stockholders — diluted $ ( 0.61 ) $ ( 1.28 ) Weighted average number of shares during the period — basic 131,136 130,298 Weighted average number of shares during the period — diluted 134,075 130,298 Comprehensive loss: Net loss $ ( 72,807 ) $ ( 114,331 ) Other comprehensive income: Changes in fair value attributable to instrument-specific credit risk 6,317 — Total other comprehensive income 6,317 — Comprehensive loss $ ( 66,490 ) $ ( 114,331 ) See accompanying notes to audited consolidated financial statements F- 4 SCILEX HOLDING COMPANY CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY / (DEFICIT ) (In thousands) Preferred Stock Common Stock Additional Accumulated Other Accumulated Treasury Stock Stockholders’ Shares Amount Shares Amount Paid-in Capital Comprehensive Income Deficit Shares Amount Equity (Deficit) Balance, December 31, 2022 29,057 $ 3 141,349 $ 14 $ 412,136 $ — $ ( 375,914 ) — $ — $ 36,239 Shares issued under the Standby Equity Purchase Agreements — — 13,218 1 34,256 — — — — 34,257 Disbursement of funds to Sorrento — — — — ( 20,000 ) — — — — ( 20,000 ) Repurchase of Treasury Stock, Preferred Stock, and warrants — ( 3 ) — — ( 53,196 ) — — ( 60,069 ) ( 90,522 ) ( 143,721 ) Issuance of Penny Warrants — — — — 10,401 — — — — 10,401 Issuance of common stock in connection with Settlement Agreement — — 475 — 750 — — — — 750 Conversion of Convertible Debentures into common stock — — 632 — 7,735 — — — — 7,735 Retainer shares issued — — 4,000 1 — — — — — 1 Issuance of common stock upon warrants exercise — — 45 — 521 — — — — 521 Stock options exercised — — 365 — 614 — — — — 614 Stock-based compensation — — — — 14,596 — — — — 14,596 Net loss — — — — — — ( 114,331 ) — — ( 114,331 ) Balance, December 31, 2023 29,057 — 160,084 16 407,813 — ( 490,245 ) ( 60,069 ) ( 90,522 ) ( 172,938 ) Shares issued under the Standby Equity Purchase Agreements and under the ATM Sales Agreement — — 2,861 — 2,671 — — — — 2,671 Shares issued under the February 2024 BDO — — 5,882 1 3,768 — — — — 3,769 Shares issued under the April 2024 RDO — — 15,000 1 5,918 — — — — 5,919 April 2024 RDO Placement Agent Warrants and February 2024 BDO Representative Warrants — — — — 956 — — — — 956 Retainer shares issued — — 10,000 1 — — — — — 1 Fee Warrant issued in connection with the Commitment Letter — — — — 310 — — — — 310 Repurchase of warrants — — — — ( 298 ) — — — — ( 298 ) Common stock issuable under the SIPA — — — — 345 — — — — 345 Placement Agent Shares and October 2024 Placement Agent Warrants — — 2,197 — 3,792 — — — — 3,792 Conversion of Tranche B Notes into common stock — — 9,215 1 9,255 — — — — 9,256 Shares issued under December 2024 RDO — — 26,355 3 325 — — — — 328 StockBlock Warrants issued in connection with the December 2024 RDO — — — — 1,265 — — — — 1,265 F- 5 Stock dividend declared, not yet distributed 5,000 1 — — ( 1 ) — — — — — Issuance of common stock upon warrants exercise — — 11,230 1 2,310 — — — — 2,311 Shares issued under ESPP — — 334 — 246 — — — — 246 Stock options exercised — — 154 — 227 — — — — 227 Stock-based compensation — — — — 15,689 — — — — 15,689 Other comprehensive income — — — — — 6,317 — — — 6,317 Net loss — — — — — — ( 72,807 ) — — ( 72,807 ) Balance, December 31, 2024 34,057 $ 1 243,312 $ 24 $ 454,591 $ 6,317 $ ( 563,052 ) ( 60,069 ) $ ( 90,522 ) $ ( 192,641 ) See accompanying notes to audited consolidated financial statements F- 6 SCILEX HOLDING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 Operating activities Net loss $ ( 72,807 ) $ ( 114,331 ) Adjustments to reconcile net loss to net cash proceeds from (used for) operating activities: Depreciation and amortization 4,046 4,146 Amortization of debt issuance costs and debt discount 316 65 Non-cash operating lease cost 718 507 Stock-based compensation 15,689 14,596 Issuance of shares under Settlement Agreement — 750 (Gain) loss on derivative liability ( 17,378 ) 512 Allocated expense for financial instruments at fair value 17,297 — Change in fair value of debt and liability instruments 4,782 7,189 Allowances for expected credit losses 1,186 — Other 661 57 Changes in operating assets and liabilities: Accounts receivables, net ( 6,267 ) ( 13,361 ) Inventory 1,462 ( 2,838 ) Prepaid expenses and other ( 479 ) ( 441 ) Other long-term assets ( 30 ) 855 Accounts payable 7,419 19,880 Accrued payroll ( 1,176 ) 1,327 Accrued expenses ( 8,167 ) 2,310 Accrued rebates and fees 72,859 58,765 Operating lease liability ( 758 ) ( 711 ) Other long-term liabilities ( 24 ) 16 Net cash proceeds from (used for) operating activities 19,349 ( 20,707 ) Investing activities Acquisition consideration paid in cash for Romeg intangible asset acquisition ( 600 ) ( 300 ) Purchase of equity securities ( 2,000 ) — Purchase of convertible promissory note from Denali ( 75 ) — Purchase of property and equipment — ( 30 ) Net cash used for investing activities ( 2,675 ) ( 330 ) Financing activities Proceeds from issuance of shares under Standby Equity Purchase Agreements and ATM Sales Agreement 2,671 35,458 Proceeds from issuance of Convertible Debentures — 24,000 Proceeds from issuance of Revolving Facility 95,438 86,354 Proceeds from issuance of FSF Deposit 10,000 — Proceeds from issuance of Tranche B Notes and purchased revenue liability 25,000 — Repayment of Revolving Facility ( 112,791 ) ( 69,001 ) Repayment of Oramed Note ( 64,200 ) ( 5,000 ) Cash consideration paid in connection with warrant repurchase ( 300 ) — Transaction costs paid related to the Business Combination — ( 1,372 ) Repayment of Convertible Debentures ( 4,375 ) ( 15,625 ) Repayment of Tranche B Notes ( 3,283 ) — Payments of debt issuance costs ( 4,172 ) ( 380 ) Disbursement of funds to Sorrento — ( 20,000 ) Cash consideration paid in connection with share repurchase — ( 10,000 ) Transaction costs paid in connection with share repurchase — ( 1,987 ) Excise tax paid in connection with share repurchase ( 450 ) — Proceeds from issuance of shares under direct offerings 41,967 — Payments of direct offering issuance costs ( 4,370 ) — Payments of deferred transaction costs related to Semnur Business Combination ( 1,379 ) — Proceeds from stock options and warrants exercised and ESPP 2,113 1,135 Net cash (used for) proceeds from financing activities ( 18,131 ) 23,582 Net change in cash, cash equivalents and restricted cash ( 1,457 ) 2,545 Cash, cash equivalents and restricted cash at beginning of period 4,729 2,184 Cash, cash equivalents and restricted cash at end of period $ 3,272 $ 4,729 Supplemental disclosure: Cash paid for interest $ 1,561 $ 1,426 F- 7 Non-cash investing and financing activities Issuance of shares to B.
Biggest changeFin ancial Statements SCILEX HOLDING COMPANY CONSOLIDATED BALANCE SHEETS (In thousands, except for par value and share amounts) December 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 4,955 $ 3,272 Marketable securities 6,026 — Accounts receivable, net 15,244 26,442 Inventory 4,789 2,436 Prepaid expenses and other current assets 7,344 9,397 Total current assets 38,358 41,547 Property and equipment, net 13,599 708 Operating lease right-of-use asset 14,818 2,225 Intangibles, net 59,088 32,453 Investments 1,000 2,420 Equity method investment, at fair value 127,040 — Equity method investment, at fair value (pledged as collateral) 32,363 — Digital assets 64,711 — Goodwill 13,481 13,481 Other long-term assets 523 119 Total assets $ 364,981 $ 92,953 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 86,266 $ 52,620 Accrued payroll 3,270 1,505 Accrued rebates and fees 231,756 162,517 Accrued expenses 66,414 2,841 Current portion of deferred consideration 407 447 Debt, current 83,262 34,876 Promissory notes 3,517 — Purchased revenue liability, current 3,764 4,115 Current portion of operating lease liabilities 1,733 714 Other current liabilities 3,263 — Total current liabilities 483,652 259,635 Long-term portion of deferred consideration 2,041 2,448 Debt, net of issuance costs 22,480 845 Purchased revenue liability, net of current portion 4,636 2,685 Derivative liabilities 50,599 18,303 Operating lease liabilities, net of current portion 13,151 1,523 Other long-term liabilities 174 155 Total liabilities 576,733 285,594 Commitments and contingencies (See Note 13) Stockholders’ deficit: Preferred stock, $ 0.0001 par value, 45,000,000 shares authorized Series A, 29,057,097 shares issued and outstanding as of each of December 31, 2025 and December 31, 2024 — — Series 1, 5,000,000 shares declared as a stock dividend, not yet distributed as of December 31, 2025; and December 31, 2024 1 1 Common stock, $ 0.0001 par value, 740,000,000 shares authorized; 8,491,267 shares issued and 7,033,004 shares outstanding as of December 31, 2025; 6,951,622 shares issued and 5,235,377 shares outstanding as of December 31, 2024 1 1 Additional paid-in capital 796,721 454,614 Accumulated other comprehensive income ( 5,803 ) 6,317 Accumulated deficit ( 921,786 ) ( 563,052 ) Treasury stock, at cost; 1,458,263 shares as of December 31, 2025 and 1,716,245 as of December 31, 2024 ( 76,915 ) ( 90,522 ) Total stockholders’ deficit before noncontrolling interests ( 207,781 ) ( 192,641 ) Noncontrolling interests ( 3,971 ) — Total stockholders’ deficit ( 211,752 ) ( 192,641 ) Total liabilities and stockholders’ deficit $ 364,981 $ 92,953 See accompanying notes to audited consolidated financial statements F- 3 SCILEX HOLDING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except for net loss per share amounts) Year Ended December 31, 2025 2024 Net revenue $ 30,253 $ 56,590 Net operating costs and expenses: Cost of revenue 10,599 16,689 Research and development 20,710 9,641 Selling, general and administrative 266,884 119,016 Goodwill impairment 73,358 — Intangible amortization 4,364 4,031 Legal settlements 345 ( 9,391 ) Total net operating costs and expenses 376,260 139,986 Loss from operations ( 346,007 ) ( 83,396 ) Other (income) expense, net: (Gain) loss on derivative liability 22,693 ( 17,378 ) Change in fair value of debt and liability instruments 25,351 4,782 Interest expense, net 11,459 1,963 Loss on foreign currency exchange ( 86 ) 45 Loss on debt extinguishment, net 7,351 — Unrealized loss on digital assets, net 12,180 — Realized loss on digital assets, net 30,200 — Unrealized (gain) on equity investment, net ( 2,692 ) — Realized (gain) on equity investments, net ( 19,218 ) — Unrealized (gain) on equity method investments carried at fair value, net ( 54,760 ) — Realized (gain) on equity method investments carried at fair value, net ( 4,657 ) — Realized (gain) on securities 199 — Total other (income) expense, net 28,020 ( 10,588 ) Loss before income taxes ( 374,027 ) ( 72,808 ) Income tax expense (benefit) 26 ( 1 ) Net loss ( 374,053 ) ( 72,807 ) Net loss attributable to noncontrolling interests ( 15,319 ) — Net loss attributable to common stockholders before deemed dividend ( 358,734 ) ( 72,807 ) Deemed dividend ( 43,753 ) — Net loss attributable to common stockholders $ ( 402,487 ) $ ( 72,807 ) Net loss per share attributable to common stockholders — basic $ ( 36.48 ) $ ( 7.24 ) Net loss per share attributable to common stockholders — diluted $ ( 36.48 ) $ ( 8.05 ) Weighted average number of shares during the period — basic 11,034 10,061 Weighted average number of shares during the period — diluted 11,034 10,145 Comprehensive loss: Net loss attributable to common stockholders $ ( 358,734 ) $ ( 72,807 ) Other comprehensive income: Foreign currency translation adjustment ( 756 ) — Changes in fair value attributable to instrument-specific credit risk ( 11,364 ) 6,317 Total other comprehensive income ( 12,120 ) 6,317 Comprehensive loss attributable to common stockholders $ ( 370,854 ) $ ( 66,490 ) See accompanying notes to audited consolidated financial statements F- 4 SCILEX HOLDING COMPANY CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY / (DEFICIT ) (In thousands) Preferred Stock Common Stock Additional Accumulated Other Accumulated Treasury Stock Noncontrolling Stockholders’ Shares Amount Shares Amount Paid-in Capital Comprehensive Income Deficit Shares Amount Interest Equity (Deficit) Balance, December 31, 2023 29,057 $ — 4,574 $ 1 $ 407,828 $ — $ ( 490,245 ) 1,716 $ ( 90,522 ) $ — $ ( 172,938 ) Shares issued under the Standby Equity Purchase Agreements and under the ATM Sales Agreement — — 81 — 2,671 — — — — — 2,671 Shares issued under the February 2024 BDO — — 168 — 3,769 — — — — — 3,769 Shares issued under the April 2024 RDO — — 429 — 5,919 — — — — — 5,919 April 2024 RDO Placement Agent Warrants and February 2024 BDO Representative Warrants — — — — 956 — — — — — 956 Retainer shares issued — — 286 — 1 — — — — — 1 Fee Warrant issued in connection with the Commitment Letter — — — — 310 — — — — — 310 Repurchase of warrants — — — — ( 298 ) — — — — — ( 298 ) Common stock issuable under the SIPA — — — — 345 — — — — — 345 Placement Agent Shares and October 2024 Placement Agent Warrants — — 63 — 3,792 — — — — — 3,792 Conversion of Tranche B Notes into common stock — — 263 — 9,256 — — — — — 9,256 Shares issued under December 2024 RDO — — 753 — 328 — — — — — 328 StockBlock Warrants issued in connection with the December 2024 RDO — — — — 1,265 — — — — — 1,265 Stock dividend declared, not yet distributed 5,000 1 — — ( 1 ) — — — — — — Issuance of common stock upon warrants exercise — — 321 — 2,311 — — — — — 2,311 Shares issued under ESPP — — 10 — 246 — — — — — 246 Stock options exercised — — 4 — 227 — — — — — 227 Stock-based compensation — — — — 15,689 — — — — — 15,689 Other comprehensive income — — — — — 6,317 — — — — 6,317 Net loss — — — — — — ( 72,807 ) — — — ( 72,807 ) Balance, December 31, 2024 34,057 1 6,952 1 454,614 6,317 ( 563,052 ) 1,716 ( 90,522 ) — ( 192,641 ) Treasury Stock transferred to Tranche B Investors for Tranche B Notes deferral — — — — ( 5,353 ) — — ( 143 ) 7,535 — 2,182 Treasury Stock paid for Gloperba Ex-US License — — — — ( 808 ) — — ( 22 ) 1,174 — 366 Treasury Stock transferred to Oramed for the Oramed Note maturity extension — — — — ( 3,523 ) — — ( 93 ) 4,898 — 1,375 F- 5 Acquisition of controlling interest in Scilex Bio — — — — 1,816 — — — — 1,944 3,760 Reverse recapitalization - Semnur Business Combination — — — — 127,245 — — — — ( 1,716 ) 125,529 Sale of 12.5 million New Semnur Common — — — — 200,685 — — — — ( 685 ) 200,000 Exercise of April 2024 and December 2024 RDO warrants and issuance of November 2025 Warrants — — 905 — 19,767 — — — — — 19,767 Exercise of December 2024 RDO Warrants in exchange for Tranche B Notes deferral — — 179 — 3,527 — — — — — 3,527 Non-Controlling interest in Vivasor net assets at date of acquisition — — — — — — — — — 11,805 11,805 Issuance of common stock upon exercise of December 2024 RDO Warrants — — 450 — 10,237 — — — — — 10,237 Payments in lieu of fractional shares or Reverse Stock Split — — — — ( 1 ) — — — — — ( 1 ) Option fee and repurchase of Penny Warrants — — — — ( 27,000 ) — — — — — ( 27,000 ) Shares issued under ESPP — — 5 — 23 — — — — — 23 Stock-based compensation — — — — 15,492 — — — — — 15,492 Other comprehensive income — — — — — ( 12,120 ) — — — — ( 12,120 ) Net loss — — — — — — ( 358,734 ) — — ( 15,319 ) ( 374,053 ) Balance, December 31, 2025 34,057 $ 1 8,491 $ 1 $ 796,721 $ ( 5,803 ) $ ( 921,786 ) 1,458 $ ( 76,915 ) $ ( 3,971 ) $ ( 211,752 ) See accompanying notes to audited consolidated financial statements F- 6 SCILEX HOLDING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2025 2024 Operating activities Net loss including noncontrolling interest $ ( 374,053 ) $ ( 72,807 ) Adjustments to reconcile net loss to net cash proceeds from operating activities: Depreciation and amortization 4,623 4,046 Amortization of debt issuance costs and debt discount 409 316 Non-cash operating lease cost 812 718 Stock-based compensation 15,492 15,689 Fair value of Gloperba-Elyxyb RPA liability expensed 500 — Fair value of treasury Stock expensed - Tranche B and Oramed Note 3,557 — Fair value of September 2025 warrants expensed - Tranche B modification 3,091 — (Gain) loss on derivative liability 22,693 ( 17,378 ) Loss on extinguishment of derivative liability 7,350 — Goodwill impairment 73,358 — Financing costs and allocated expense for financial instruments at fair value — 17,297 In-process research and development expense 5,426 — Transaction costs expensed related to Semnur Business Combination 140,000 — Change in fair value of debt and liability instruments 25,351 4,782 Change in fair value of equity investments ( 2,692 ) — Change in fair value of digital assets 12,180 — Change in fair value of equity method investment, net ( 54,759 ) — Realized (gain) loss on investment, net ( 19,218 ) — Realized (gain) loss on digital assets, net 30,200 — Realized (gain) loss on equity method investment, net ( 4,657 ) — Realized Gains & Losses on Securities 199 — Allowances for expected credit losses — 1,186 Other ( 13 ) 661 Changes in operating assets and liabilities: Accounts receivables, net 13,837 ( 6,267 ) Inventory 1,799 1,462 Prepaid expenses and other 3,300 ( 479 ) Other long-term assets ( 3 ) ( 30 ) Accounts payable 13,121 7,419 Accrued payroll ( 1,095 ) ( 1,176 ) Accrued expenses 14,601 ( 8,167 ) Accrued rebates and fees 69,239 72,859 Operating lease liability ( 857 ) ( 758 ) Other long-term liabilities 25 ( 24 ) Net cash proceeds from operating activities 3,816 19,349 Investing activities Acquisition consideration paid in cash for Romeg intangible asset acquisition ( 600 ) ( 600 ) Purchase of equity securities — ( 2,000 ) Cash paid for in-process research and development, net ( 200 ) ( 75 ) Cash paid to settle Datavault Obligation ( 9,230 ) — Purchases of Bitcoin with cash ( 15,837 ) — Purchase of property and equipment ( 133 ) — Exercise of prefunded warrant ( 27 ) — Purchase of preferred shares of Vivasor ( 9,000 ) — Sale of Datavault AI Inc. shares for cash, net 39,606 — Repayments on promissory note ( 962 ) — Payment made for PA OPS investment ( 1,000 ) — Vivasor Cash Acquired 1,517 — Purchase of convertible promissory note from Denali ( 50 ) — Net cash proceeds from (used for) investing activities 4,084 ( 2,675 ) Financing activities Proceeds from issuance of shares under Standby Equity Purchase Agreements and ATM Sales Agreement — 2,671 Proceeds from issuance of Revolving Facility — 95,438 Proceeds from issuance of FSF Deposit — 10,000 Proceeds from issuance of Tranche B Notes and purchased revenue liability — 25,000 Repayment of Revolving Facility — ( 112,791 ) Repayment of Oramed Note — ( 64,200 ) Cash consideration paid in connection with warrant repurchase — ( 300 ) Cash assumed in Semnur Business Combination 35 — Repayment of Convertible Debentures — ( 4,375 ) Repayment of Tranche B Notes ( 20,532 ) ( 3,283 ) Payments of debt issuance costs ( 71 ) ( 4,172 ) Cash consideration paid in connection with the repurchase of Penny Warrants ( 27,000 ) — F- 7 Payments on purchased revenue liability ( 3,179 ) — Transaction costs paid in connection with share repurchase ( 996 ) — Proceeds from exercise of April 2024 RDO Warrants and December 2024 RDO Warrants 20,358 — Transaction costs paid in connection with issuance of common stock and exchange of April 2024 RDO Warrants and December 2024 RDO Warrants for November 2025 Warrants ( 1,745 ) — Payments for the termination of Tumim Purchase Agreement ( 2,700 ) — Proceeds from issuance of Scilex-St.
The Commitment Amount shall be payable as follows: (i) $ 85.0 million no later than the date that is 70 days following the date on which the Company receives the FSF Deposit (as defined below) (the “Outside Date” and the funding of the initial $ 85.0 million, the “Initial Closing”) and (ii) the remaining $ 15.0 million within 60 days following the Initial Closing (the funding of the second $ 15.0 million, the “Second Closing”).
The Commitment Amount shall be payable as follows: (i) $ 85.0 million no later than the date that is 70 days following the date on which the Company receives the FSF Deposit (as defined below) (the “Outside Date” and the funding of the initial $ 85.0 million, the “Initial Commitment Closing”) and (ii) the remaining $ 15.0 million within 60 days following the Initial Closing (the funding of the second $ 15.0 million, the “Second Closing”).
Pursuant to the Commitment Letter, FSF Lender was required to provide the Company a non-refundable deposit in immediately available funds in the aggregate principal amount of $ 10.0 million (the “FSF Deposit” and the date on which such funds are fully received, the “Deposit Date”), which amount will be creditable towards the $ 85.0 million required to be funded by FSF Lender at the Initial Closing.
Pursuant to the Commitment Letter, FSF Lender was required to provide the Company a non-refundable deposit in immediately available funds in the aggregate principal amount of $ 10.0 million (the “FSF Deposit” and the date on which such funds are fully received, the “Deposit Date”), which amount will be creditable towards the $ 85.0 million required to be funded by FSF Lender at the Initial Commitment Closing.
The Company has received in exchange for the issuance of the Tranche B Notes to the Tranche B Investors an aggregate amount in cash of $ 22,500,000 , excluding fees and expenses payable by the Company.
In exchange for the issuance of the Tranche B Notes to the Tranche B Investors, the Company has received an aggregate amount in cash of $ 22,500,000 , excluding fees and expenses payable by the Company.
In the event that Denali does not consummate an initial business combination, the Convertible Promissory Note will be repaid only from funds held outside of the trust account established in connection with the IPO or will be forfeited, eliminated or otherwise forgiven. No interest shall accrue on the unpaid principal balance of the Convertible Promissory Note.
In the event that Denali does not consummate an initial business combination, the Convertible Promissory Note will be repaid only from funds held outside of the trust account established in connection with the Denali IPO or will be forfeited, eliminated or otherwise forgiven. No interest shall accrue on the unpaid principal balance of the Convertible Promissory Note.
The Commitment Amount should be payable as follows: (i) $ 85.0 million no later than the Outside Date, which is 70 days following the date on which the Company received the FSF Deposit and (ii) the remaining $ 15.0 million within 60 days following the Initial Closing.
The Commitment Amount should be payable as follows: (i) $ 85.0 million no later than the Outside Date, which is 70 days following the date on which the Company received the FSF Deposit and (ii) the remaining $ 15.0 million within 60 days following the Initial Commitment Closing.
In lieu of bifurcating such features, the Company has elected the fair value option for this financial instrument and records the changes in the fair value within the consolidated statements of operations and comprehensive loss at the end of each reporting period.
In lieu of bifurcating such features, the Company has elected the fair value option for this financial instrument and records the changes in the fair value within the consolidated statements of operations and comprehensive loss at the end of each reporting period.
Upon satisfaction of such remaining obligations, the Commitment Letter shall be terminated and of no further force or effect and neither FSF Lender nor the Company shall have any further liability or obligations thereunder.
Upon satisfaction of such remaining obligations, the Commitment Letter shall be terminated and of no further force or effect and neither FSF Lender nor the Company shall have any further liability or obligations thereunder.
In consideration of Endeavor assuming the payment obligation of the Company in respect of the FSF Deposit, Endeavor will not be responsible for making any payment to the Company for (i) the product already delivered as of the date of such agreement in an amount of approximately $ 13.2 million and (ii) the Additional Product.
In consideration of Endeavor assuming the payment obligation of the Company in respect of the FSF Deposit, Endeavor will not be responsible for making any payment to the Company for (i) the product already delivered as of the date of such agreement in an amount of approximately $ 13.2 million and (ii) the Additional Product.
The Company has received in exchange for the issuance of the Tranche B Notes to the Tranche B Investors an aggregate amount in cash of $ 22,500,000 , excluding fees and expenses payable by the Company.
In exchange for the issuance of the Tranche B Notes to the Tranche B Investors, the Company has received an aggregate amount in cash of $ 22,500,000 , excluding fees and expenses payable by the Company.
The Company has received from Oramed in consideration for the Tranche B Notes issued to Oramed an exchange and reduction of the principal balance under the Oramed Note of $ 22,500,000 .
In consideration for the Tranche B Notes issued to Oramed, the Company has received from Oramed an exchange and reduction of the principal balance under the Oramed Note of $ 22,500,000 .
The October 2024 Placement Agent Warrants will have the same terms as the October 2024 Noteholder Warrants, except that the Placement Agents have agreed not to exercise the October 2024 Placement Agent Warrants for a period of 180 days following the date of issuance.
The October 2024 Placement Agent Warrants will have the same terms as the October 2024 Noteholder Warrants, except that the October 2024 Placement Agents have agreed not to exercise the October 2024 Placement Agent Warrants for a period of 180 days following the date of issuance.
In conjunction with the Tranche B Securities Purchase Agreement, the Company entered into the ZTlido Royalty Purchase Agreement (as defined below) for $ 5.0 million of the aggregate purchase price for the ZTlido Purchased Receivables in full consideration for the sale, transfer, conveyance and granting of the ZTlido Purchased Receivables, subject to the terms and conditions set forth in the ZTlido Royalty Purchase Agreement.
In conjunction with the Tranche B Securities Purchase Agreement, the Company entered into the ZTlido Royalty Purchase Agreement for $ 5.0 million of the aggregate purchase price for the ZTlido Purchased Receivables (as defined below) in full consideration for the sale, transfer, conveyance and granting of the ZTlido Purchased Receivables, subject to the terms and conditions set forth in the ZTlido Royalty Purchase Agreement.
The Royalty Purchase Agreement terminates six months following receipt by the ZTlido RPA Purchasers of all payments of the ZTlido Purchased Receivables to which each ZTlido RPA Purchaser is entitled during the period commencing on the closing date of the ZTlido Royalty Purchase Agreement and expiring on the tenth anniversary of such closing date.
The ZTlido Royalty Purchase Agreement terminates six months following receipt by the ZTlido RPA Purchasers of all payments of the ZTlido Purchased Receivables to which each ZTlido RPA Purchaser is entitled during the period commencing on the closing date of the ZTlido Royalty Purchase Agreement and expiring on the tenth anniversary of such closing date.
As compensation for such placement agent services, the Company paid the Placement Agents an aggregate cash fee equal to 8.0 % of the gross proceeds actually received by the Company from the April 2024 RDO.
As compensation for such placement agent services, the Company paid the April 2024 RDO Placement Agents an aggregate cash fee equal to 8.0 % of the gross proceeds actually received by the Company from the April 2024 RDO.
The issuance costs allocated to the equity component are recorded as the reduction of the offering proceeds and the amounts allocated to the liability component are expensed as incurred within the selling, general and administrative expenses in the Company's consolidated statement of operations.
The issuance costs allocated to the equity component are recorded as the reduction of the offering proceeds and the amounts allocated to the liability component are expensed as incurred within the selling, general and administrative expenses in the Company's consolidated statement of operations.
The Lido License Agreement supersedes and replaces the that certain Rest of World License Term Sheet parties entered into on October 8, 2024.
The Lido License Agreement supersedes and replaces that certain Rest of World License Term Sheet the parties entered into on October 8, 2024.
The Gloperba-Elyxyb Royalty Purchase Agreement shall terminate six months following receipt by the Gloperba-Elyxyb RPA Purchasers of all payments of the Purchased Receivables to which each Gloperba-Elyxyb RPA Purchaser is entitled during the Payment Term.
The Gloperba-Elyxyb Royalty Purchase Agreement shall terminate six months following receipt by the Gloperba-Elyxyb RPA Purchasers of all payments of the Gloperba-Elyxyb Purchased Receivables to which each Gloperba-Elyxyb RPA Purchaser is entitled during the Gloperba-Elyxyb Payment Term.
The Licensee granted to the Company a non-exclusive, non-transferable (except in connection with a permitted assignment of the Gloperba License Agreement), right and license under the Licensee Non-Blocking Patents (as defined therein) (i) in the United States, to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit Gloperba Product for commercialization of Gloperba Products in the United States in the Field (as defined therein), and (ii) worldwide, to develop and manufacture Gloperba Product for commercialization in the United States in the Field (as defined therein).
The Licensee granted to the Company a non-exclusive, non-transferable (except in connection with a permitted assignment of the Gloperba License Agreement), right and license under the Licensee Non-Blocking Patents (as defined therein) (i) in the United States, to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit the Gloperba Product for commercialization of the Gloperba Products in the United States in the Field, and (ii) worldwide, to develop and manufacture the Gloperba Product for commercialization in the United States in the Field.
Promptly after the Effective Date, the Company is required to (i) facilitate an introduction between the Licensee and the Company’s contract manufacturer of the Gloperba Product (the “Gloperba CMO”) as of the Effective Date, and (ii) use reasonable efforts to cause such Gloperba CMO to accept a direct engagement with the Licensee for the manufacturing or supply of the Gloperba Product in finished dosage form.
Promptly after the Gloperba Effective Date, the Company is required to (i) facilitate an introduction between the Licensee and the Company’s contract manufacturer of the Gloperba Product (the “Gloperba CMO”) as of the Gloperba Effective Date, and (ii) use reasonable efforts to cause such Gloperba CMO to accept a direct engagement with the Licensee for the manufacturing or supply of the Gloperba Product in finished dosage form.
If such definitive documents were entered into on or before the Outside Date, the Company agreed to issue to FSF Lender (i) at the Initial Closing, a warrant to purchase up to an aggregate of 24,375,000 shares (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction) of Common Stock (the “Initial Closing Warrant”), and (ii) at the Second Closing, a warrant to purchase up to an aggregate of 4,875,000 shares (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction) of Common Stock (the “Second Closing Warrant”), each to have an exercise price of $ 1.20 per share.
If such definitive documents were entered into on or before the Outside Date, the Company agreed to issue to FSF Lender (i) at the Initial Commitment Closing, a warrant to purchase up to an aggregate of 24,375,000 shares (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction) of Common Stock (the “Initial Commitment Closing Warrant”), and (ii) at the Second Closing, a warrant to purchase up to an aggregate of 4,875,000 shares (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction) of Common Stock (the “Second Closing Warrant”), each to have an exercise price of $ 1.20 per share.
Following each of the April 2024 RDO (as defined below and as described under Note 9), the receipt of the FSF Deposit (as described below) and the sale of shares of Common Stock pursuant to the ATM Sales Agreement, the Company made a mandatory prepayment of $ 9,578,835 , $ 7,000,000 and $ 1,760,796, respectively, to Oramed, which equals 70% of the net cash proceeds the Company received from the April 2024 RDO, the FSF Deposit and sale of shares of Common Stock pursuant to the ATM Sales Agreement.
Following each of the April 2024 RDO (as defined below and as described under Note 10), the receipt of the FSF Deposit (as described below) and the sale of shares of Common Stock pursuant to the ATM Sales Agreement, the Company made a mandatory prepayment of $ 9,578,835 , $ 7,000,000 and $ 1,760,796, respectively, to Oramed, which equals 70% of the net cash proceeds the Company received from the April 2024 RDO, the FSF Deposit and sale of shares of Common Stock pursuant to the ATM Sales Agreement.
The Company received the FSF Deposit on June 18, 2024 and issued to FSF Lender the Deposit Warrant to purchase up to an aggregate of 3,250,000 shares of Common Stock (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction), with an exercise price of $ 1.20 per share.
The Company received the FSF Deposit on June 18, 2024, and issued to FSF Lender the Deposit Warrant to purchase up to an aggregate of 3,250,000 shares of Common Stock (subject to adjustment for any stock dividend, stock split, or similar transaction), with an exercise price of $ 1.20 per share.
The Licensee granted to Scilex Pharma a non-exclusive, non-transferable, right and license under the Licensee Non-Blocking Patents (as defined therein) (i) in the Licensor Territory (as defined therein), to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit Lido Product for commercialization of Lido Products in the Licensor Territory in the Field (each as defined therein), and (ii) worldwide, to develop and manufacture Lido Product for commercialization in the Licensor Territory in the Field (each as defined therein).
The Licensee granted to Scilex Pharma a non-exclusive, non-transferable, right and license under the Licensee Non-Blocking Patents (as defined therein) (i) in the Licensor Territory (as defined therein), to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit Lido Product for commercialization of Lido Products in the Licensor Territory in the Field (as defined therein), and (ii) worldwide, to develop and manufacture Lido Product for commercialization in the Licensor Territory in the Field.
The Deposit Warrant was immediately exercisable and would expire five years from the date of issuance. If the Initial Closing did not occur on or prior to the Outside Date, the FSF Deposit should automatically convert into an unsecured loan on the first day after the Outside Date.
The Deposit Warrant was immediately exercisable and would expire five years from the date of issuance. If the Initial Commitment Closing did not occur on or prior to the Outside Date, the FSF Deposit should automatically convert into an unsecured loan on the first day after the Outside Date.
Upon the closing of the Semnur Business Combination, it is anticipated that Denali will change its name to “Semnur Pharmaceuticals, Inc.” (“New Semnur”). Shares of Denali common stock following the Domestication are hereinafter referred to as "New Semnur Common Shares". Shares of Denali Series A preferred stock following the Domestication are hereinafter referred to as “New Semnur Preferred Shares”.
Upon the closing of the Semnur Business Combination, it is anticipated that Denali will change its name to “Semnur Pharmaceuticals, Inc.” (“New Semnur”). Shares of Denali common stock following the Domestication are hereinafter referred to as “New Semnur Common Shares”. Shares of Denali Series A preferred stock following the Domestication are hereinafter referred to as “New Semnur Preferred Shares”.
The Initial Closing Warrant and the Second Closing Warrant would expire five years from the date of issuance. To evidence the FSF Loan, the Company agreed to issue to FSF Lender a Senior Secured Promissory Note (the “Secured Promissory Note”), which shall have a maturity date of five years after the date of issuance.
The Initial Commitment Closing Warrant and the Second Closing Warrant would expire five years from the date of issuance. To evidence the FSF Loan, the Company agreed to issue to FSF Lender a Senior Secured Promissory Note (the “Secured Promissory Note”), which shall have a maturity date of five years after the date of issuance.
Series A Preferred Stock As of December 31, 2024 and 2023, there were 29,057,097 shares of Series A Preferred Stock outstanding. On September 21, 2023, the Series A Preferred Stock was repurchased and derecognized for accounting purposes. The Series A Preferred Stock is currently held as collateral for the Oramed Note.
Series A Preferred Stock As of December 31, 2025 and 2024, there were 29,057,097 shares of Series A Preferred Stock outstanding. On September 21, 2023, the Series A Preferred Stock was repurchased and derecognized for accounting purposes. The Series A Preferred Stock is currently held as collateral for the Oramed Note.
The parties further agreed, upon receipt of the Specified September Payment by Oramed, (i) that notwithstanding the minimum Liquidity (as defined therein) requirements set forth in Section 7(b)(x) of the Oramed Note, the Company and its Subsidiaries (as defined therein) shall be required to maintain the following minimum liquidity during the specified time periods instead: from and after September 19, 2024 until the Maturity Date, $ 0 , and (ii) to extend the due date of the $ 20,000,000 amortization payment from September 23, 2024 to September 30, 2024 .
F- 41 The parties further agreed, upon receipt of the Specified September Payment by Oramed, (i) that notwithstanding the minimum Liquidity (as defined therein) requirements set forth in Section 7(b)(x) of the Oramed Note, the Company and its Subsidiaries (as defined therein) shall be required to maintain the following minimum liquidity during the specified time periods instead: from and after September 19, 2024, until the Maturity Date, $ 0 , and (ii) to extend the due date of the $ 20,000,000 amortization payment from September 23, 2024 , to September 30, 2024 .
Before the closing of the Sorrento SPA transactions and in connection with the transactions contemplated by the Sorrento SPA, the Company formed two entities: (a) Scilex DRE Holdings LLC (“Holdco”), a single purpose entity that is the Company’s direct wholly owned subsidiary and (b) Scilex Stock Acquisition Joint Venture LLC, a single purpose bankruptcy-remote entity that is the Company’s indirect wholly owned subsidiary (“SCLX JV”), which was F- 34 formed to hold the Purchased Securities.
Before the closing of the Sorrento SPA transactions and in connection with the transactions contemplated by the Sorrento SPA, the Company formed two entities: (a) Scilex DRE Holdings LLC (“Holdco”), a single purpose entity that is the Company’s direct wholly owned subsidiary and (b) Scilex Stock Acquisition Joint Venture LLC, a single purpose bankruptcy-remote entity that is the Company’s indirect wholly owned subsidiary (“SCLX JV”), which was formed to hold the Purchased Securities.
The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon six months’ written notice. On February 16, 2017, Scilex Pharma entered into a Commercial Supply Agreement (as amended, the “Supply Agreement”) with the two Developers to provide commercial supply of ZTlido and SP-103 to Scilex Pharma.
The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon six months’ written notice. F- 63 On February 16, 2017, Scilex Pharma entered into a Commercial Supply Agreement (as amended, the “Supply Agreement”) with the two Developers to provide commercial supply of ZTlido and SP-103 to Scilex Pharma.
The Penny Warrants are recognized in additional paid-in capital in the Company’s consolidated balance sheets. The fair value of Penny Warrants as of September 21, 2023, the date of issuance, was $ 10.4 million. During the year ended December 31, 2024 , there were 6,500,000 Penny Warrants exercised by Oramed for net proceeds of approximately $ 0.1 million.
The Penny Warrants are recognized in additional paid-in capital in the Company’s F- 50 consolidated balance sheets. The fair value of Penny Warrants as of September 21, 2023, the date of issuance, was $ 10.4 million. During the year ended December 31, 2024 , there were 6,500,000 Penny Warrants exercised by Oramed for net proceeds of approximately $ 0.1 million.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2024 and 2023 , the Company maintained a full valuation allowance against its deferred tax assets. Leases The Company determines if an arrangement is a lease at inception.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2025 and 2024 , the Company maintained a full valuation allowance against its deferred tax assets. Leases The Company determines if an arrangement is a lease at inception.
Product Returns The Company is obligated to accept the return of products sold that are expiring within six months, damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the term of its sales contracts, and estimates allowances for such amounts at the time of sale.
F- 17 Product Returns The Company is obligated to accept the return of products sold that are expiring within six months, damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the term of its sales contracts, and estimates allowances for such amounts at the time of sale.
Acquisitions and License Agreements SP-104 Acquisition In May 2022, the Company acquired the Delayed Burst Release Low Dose Naltrexone asset and intellectual property rights for the treatment of chronic pain, fibromyalgia and chronic post-COVID syndrome (collectively, the “SP-104 Assets”). Pursuant to the acquisition provisions, the Company is obligated to pay Aardvark Therapeutics, Inc.
Acquisitions SP-104 Acquisition In May 2022, the Company acquired the Delayed Burst Release Low Dose Naltrexone asset and intellectual property rights for the treatment of chronic pain, fibromyalgia and chronic post-COVID syndrome (collectively, the “SP-104 Assets”). Pursuant to the acquisition provisions, the Company is obligated to pay Aardvark Therapeutics, Inc.
Shares of the Dividend Stock, as declared by the Board of Directors of the Company on October 27, 2024 and not yet distributed F- 49 as of December 31, 2024, are also excluded from the computation of net loss per share because the associated Series 1 Preferred Stock is not considered to be a participating security.
Shares of the Dividend Stock, as declared by the Board of Directors of the Company on October 27, 2024 and not yet distributed as of December 31, 2024, are also excluded from the computation of net loss per share because the associated Series 1 Preferred Stock is not considered to be a participating security.
On September 17, 2024, the Company entered into the Satisfaction Agreement with FSF Lender and Endeavor, pursuant to which the remaining obligations in respect of the FSF Deposit shall be fully satisfied by the Company’s delivery of 28,000 cartons of ZTlido to Endeavor, which delivery shall occur no later than December 31, 2024.
On September 17, 2024, the Company entered into the Satisfaction Agreement with FSF Lender and Endeavor, pursuant to which the remaining obligations in respect of the FSF Deposit shall be fully satisfied by the Company’s F- 43 delivery of 28,000 cartons of ZTlido to Endeavor, which delivery shall occur no later than December 31, 2024.
Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. Upon commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life.
Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. Upon F- 13 commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life.
In November 2024, the Company delivered the Additional Product to Endeavor and fully satisfied the remaining obligations in respect of the FSF Deposit. On October 8, 2024, the Company entered into a securities purchase agreement (the “Tranche B Securities Purchase Agreement”) with certain institutional investors (collectively, the “Tranche B Investors”) and Oramed Pharmaceuticals Inc.
In November 2024, the Company delivered the Additional Product to Endeavor and fully satisfied the remaining obligations in respect of the FSF Deposit. On October 7, 2024, the Company entered into a securities purchase agreement (the “Tranche B Securities Purchase Agreement”) with certain institutional investors (collectively, the “Tranche B Investors”) and Oramed Pharmaceuticals Inc.
Pursuant to the Gloperba-Elyxyb Royalty Purchase Agreement, Scilex Pharma sold to the Gloperba-Elyxyb RPA Purchasers the right to receive 4 % of all aggregate net sales worldwide (the “Gloperba-Elyxyb Purchased Receivables”) with respect to Gloperba, Elyxyb, and any related, improved, successor, replacement and/or varying dosage forms of the foregoing (the “Gloperba-Elyxyb Covered Products”).
Pursuant to the Gloperba-Elyxyb Royalty Purchase Agreement, Scilex Pharma transferred to the Gloperba-Elyxyb RPA Purchasers the right to receive 4 % of all aggregate net sales worldwide (the “Gloperba-Elyxyb Purchased Receivables”) with respect to Gloperba, Elyxyb, and any related, improved, successor, replacement and/or varying dosage forms of the foregoing (the “Gloperba-Elyxyb Covered Products”).
Territory; and (3) pursuant to the amendment thereto, a license, with the right to (a) sublicense under the know-how and, if any, patents existing worldwide other than the Romeg U.S. Territory (the “Romeg Ex-U.S. Territory”), as F- 19 specified therein, to develop, manufacture and commercialize Licensed Products in the Romeg Ex-U.S.
Territory; and (3) pursuant to the amendment thereto, a license, with the right to (a) sublicense under the know-how and, if any, patents existing worldwide other than the Romeg U.S. Territory (the “Romeg Ex-U.S. Territory”), as specified therein, to develop, manufacture and commercialize Licensed Products in the Romeg Ex-U.S.
Pursuant to the Commitment Letter, FSF Lender provided the Company a non-refundable FSF Deposit in immediately available funds in the aggregate principal amount of $ 10.0 million on the Deposit Date, which amount would be F- 30 creditable towards the $ 85.0 million required to be funded by FSF Lender at the Initial Closing.
Pursuant to the Commitment Letter, FSF Lender provided the Company a non-refundable FSF Deposit in immediately available funds in the aggregate principal amount of $ 10.0 million on the Deposit Date, which amount would be creditable towards the $ 85.0 million required to be funded by FSF Lender at the Initial Commitment Closing.
The primary unobservable input utilized in determining the fair value of the warrant is the expected volatility of the Common Stock. The expected volatility assumption is based on the Company's historical volatility, historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants (see Note 9 ).
The primary unobservable input utilized in determining the fair value of the warrant is the expected volatility of the Common Stock. The expected volatility assumption is based on the Company’s historical volatility, historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants (see Note 10).
The exercise price of the April 2024 RDO Common Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Common Stock. StockBlock and its affiliate, Rodman & Renshaw LLC, acted as exclusive placement agents (the “Placement Agents”) in connection with the April 2024 RDO.
The exercise price of the April 2024 RDO Common Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Common Stock. StockBlock and its affiliate, Rodman & Renshaw LLC, acted as exclusive placement agents (the “April 2024 RDO Placement Agents”) in connection with the April 2024 RDO.
Equity Incentive Plan In June 2017, the Board of Directors of the Company adopted the Scilex Pharmaceuticals Inc. Equity Incentive Plan (the “Scilex Pharma 2017 Plan”). In connection with the corporate reorganization in March 2019, the Scilex Pharma 2017 Plan was terminated. Accordingly, after such time, no additional awards were granted under the Scilex Pharma 2017 Plan.
Equity Incentive Plan In June 2017, the Board of Directors of the Company adopted the Scilex Pharmaceuticals Inc. Equity Incentive Plan (the “Scilex Pharma 2017 Plan”). In connection with the corporate reorganization in March 2019, the Scilex Pharma F- 58 2017 Plan was terminated. Accordingly, after such time, no additional awards were granted under the Scilex Pharma 2017 Plan.
The $ 50.0 million of total proceeds received were allocated based on their relative fair value to the Tranche B Notes, the October 2024 Noteholder Warrants, and the ZTlido Royalty Purchase Agreement, with the excess of fair value over the proceeds received in amount of $ 2.6 million recognized as a loss upon issuance in change in fair value of debt and liability instruments in the consolidated statement of operations during the year ended December 31, 2024.
The $ 50.0 million of total proceeds received were allocated based on their relative fair value to the Tranche B Notes, the October 2024 Noteholder Warrants, and the ZTlido Royalty Purchase Agreement, with the excess of fair value over the proceeds received in amount of $ 2.6 million recognized as a loss upon issuance within the change in fair value of debt and liability instruments in the consolidated statements of operations during the year ended December 31, 2024.
Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of expenses during the reporting period.
F- 10 Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of expenses during the reporting period.
No expense was recorded in connection with the NSOs as of December 31, 2024, as until the date on which all payments and all obligations under the Oramed Note have been paid in full in cash, such options will not be or become exercisable, eligible for exchange, redemption or repurchase, eligible to participate in any dividends or distributions or have any voting rights in respect of the Company or any of its current or future subsidiaries of the Company, and following the closing of the transactions contemplated by the Semnur Business Combination Agreement, the Company, Denali or any of their respective current and future subsidiaries, successors and assigns.
No expense was recorded in connection with the NSOs as of December 31, 2025, as until the date on which all payments and all obligations under the Oramed Note have been paid in full in cash, such options will not be or become exercisable, eligible for exchange, redemption or repurchase, eligible to participate in any dividends or distributions or have any voting rights in respect of the Company or any of its current or future subsidiaries of the Company, and F- 60 following the closing of the transactions contemplated by the Semnur Business Combination Agreement, the Company, Denali or any of their respective current and future subsidiaries, successors and assigns.
Other than the following four lawsuits, the Company is not a party to any outstanding material litigation and management is not aware of any legal proceedings that, individually or in the aggregate, are deemed to be material to the Company’s financial condition or results of operations.
Other than the following three lawsuits, the Company is not a party to any outstanding material litigation and management is not aware of any legal proceedings that, individually or in the aggregate, are deemed to be material to the Company’s financial condition or results of operations.
Pursuant to the terms of the Scilex-Oramed SPA, the Company issued the Oramed Note (see Note 7 ), which replaced Sorrento’s outstanding obligations to Oramed, warrants to purchase up to an aggregate of 4,500,000 shares of Common Stock (the “Closing Penny Warrant”) with an exercise price of $ 0.01 per share and restrictions on exercisability, and warrants to purchase up to an aggregate of 8,500,000 shares of Common Stock (the “Subsequent Penny Warrants” and together with the Closing Penny Warrant, the “Penny Warrants”), each with an exercise price of $ 0.01 per share and each with restrictions on exercisability.
F- 49 Pursuant to the terms of the Scilex-Oramed SPA, the Company issued the Oramed Note (see Note 8), which replaced Sorrento’s outstanding obligations to Oramed, warrants to purchase up to an aggregate of 4,500,000 shares of Common Stock (the “Closing Penny Warrant”) with an exercise price of $ 0.01 per share and restrictions on exercisability, and warrants to purchase up to an aggregate of 8,500,000 shares of Common Stock (the “Subsequent Penny Warrants” and together with the Closing Penny Warrant, the “Penny Warrants”), each with an exercise price of $ 0.01 per share and each with restrictions on exercisability.
Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options and warrants, which consists of the incremental Common Stock issuable upon the exercise of stock options and warrants (using the treasury stock method or the reverse treasury stock method, as applicable).
Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for F- 18 the potentially dilutive impact of stock options and warrants, which consists of the incremental Common Stock issuable upon the exercise of stock options and warrants (using the treasury stock method or the reverse treasury stock method, as applicable).
Under this F- 29 agreement, the Company and the Guarantors granted to the Agent (on behalf of and for the benefit of the holders of the Oramed Note and any Additional Notes as defined thereunder) a security interest in all or substantially all of the properties of the Company and each of the Guarantors.
Under this agreement, the Company and the Guarantors granted to the Agent (on behalf of and for the benefit of the holders of the Oramed Note and any Additional Notes as defined thereunder) a security interest in all or substantially all of the properties of the Company and each of the Guarantors.
Holdco was formed to hold all of the equity interests in SCLX JV. Holdco and SCLX JV are parties to the Security Agreement and Subsidiary Guarantee (see Note 7). Series A Preferred Stock Pursuant to the terms of the Sorrento SPA, the Company repurchased all of the outstanding Series A Preferred Stock .
Holdco was formed to hold all the equity interests in SCLX JV. Holdco and SCLX JV are parties to the Security Agreement and Subsidiary Guarantee (see Note 8). Series A Preferred Stock Pursuant to the terms of the Sorrento SPA, the Company repurchased all of the outstanding Series A Preferred Stock .
The offering price per RDO Share and accompanying April 2024 RDO Common Warrant to purchase one share of Common Stock was $ 1.00 , for aggregate gross proceeds to the Company of $ 15,000,000 , before deducting the placement agent fees and other offering expenses.
The offering price per RDO Share and accompanying April 2024 RDO Common Warrant to purchase one share of Common Stock was $ 35.00 , for aggregate gross proceeds to the Company of $ 15,000,000 , before deducting the placement agent fees and other offering expenses.
The Company calculates the associated lease liability and corresponding ROU asset upon lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. As of December 31, 2024 , the Company has no finance leases .
The Company calculates the associated lease liability and corresponding ROU asset upon lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. As of December 31, 2025 , the Company has no finance leases .
The Company accounted for the December 2024 RDO Common Warrants and December 2024 RDO Pre-Funded Warrants as liability classified instruments (see Note 4) and the StockBlock Warrants as an equity classified instrument. The StockBlock Warrants are recognized in additional paid-in capital in the Company’s consolidated balance sheets.
The Company accounted for the December 2024 RDO Common Warrants and December 2024 RDO Pre-Funded Warrants as liability classified instruments (see Note 5) and the StockBlock Warrants as an equity classified instrument. The StockBlock Warrants are recognized in additional paid-in capital in the Company’s consolidated balance sheets.
Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments that are readily convertible into cash without penalty and with original maturities of three months or less at the date of purchase to be cash equivalents.
Cash, Cash Equivalents, Restricted Cash and Marketable Securities The Company considers all highly liquid investments that are readily convertible into cash without penalty and with original maturities of three months or less at the date of purchase to be cash equivalents.
The Company considers control to have transferred upon delivery because the customer has legal title to the product, physical possession of the product has been transferred to the customer, the customer has significant risks and rewards of ownership of the product, and the F- 14 Company has a present right to payment at that time.
The Company considers control to have transferred upon delivery because the customer has legal title to the product, physical possession of the product has been transferred to the customer, the customer has significant risks and rewards of ownership of the product, and the Company has a present right to payment at that time.
The Company accounted for the April 2024 RDO Common Warrants as a liability classified instrument (see Note 4) and the April 2024 RDO Placement Agent Warrants as an equity classified instrument. The April 2024 RDO Placement Agent Warrants are recognized in additional paid-in capital in the Company’s consolidated balance sheets.
The Company accounted for the April 2024 RDO Common Warrants as a liability classified instrument (see Note 5) and the April 2024 RDO Placement Agent Warrants as an equity classified instrument. The April 2024 RDO Placement Agent Warrants are recognized in additional paid-in capital in the Company’s consolidated balance sheets.
Contingent Consideration The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model.
Contingent Consideration F- 14 The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model.
Lease expense for lease payments is recognized on a straight-line basis over the lease term in selling, general and administrative expenses. Revenue Recognition The Company’s revenue is generated from product sales within the United States. The Company does not incur significant direct costs to obtain contracts with its customers.
Lease expense for lease payments is recognized on a straight-line basis over the lease term in selling, general and administrative expenses. F- 16 Revenue Recognition The Company’s revenue is primarily generated from product sales within the United States. The Company does not incur significant direct costs to obtain contracts with its customers.
Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2024 and 2023 were not material.
Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2025 and 2024 were not material.
The Company made matching contributions to the 401(k) plan totaling $ 0.6 million and $ 0.5 million for the years ended December 31, 2024 and 2023, respectively. Retainer Shares On February 13, 2023, the Company entered into a Stock Issuance Agreement (the “2023 SIA”) with a law firm for the provision of legal services to the Company.
The Company made matching contributions to the 401(k) plan totaling $ 0.4 million and $ 0.6 million for the years ended December 31, 2025 and 2024, respectively. Retainer Shares On February 13, 2023, the Company entered into a Stock Issuance Agreement (the “2023 SIA”) with a law firm for the provision of legal services to the Company.
Nature of Operations and Basis of Presentation Organization and Principal Activities Scilex Holding Company (“Scilex” and together with its wholly owned subsidiaries, the “Company”) is an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain.
Nature of Operations and Basis of Presentation Organization and Principal Activities Scilex Holding Company (“Scilex” and together with its consolidated subsidiaries, the “Company”) is an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31, 2024 and 2023 (in thousands): 2024 2023 Gross unrecognized tax benefits at the beginning of the year $ 1,071 $ 408 Increase related to prior year tax positions — 536 Increase related to current year tax positions 127 127 Gross unrecognized tax benefits at the end of the year $ 1,198 $ 1,071 As of December 31, 2024 and 2023 , the Company had $ 1.2 million and $ 1.1 million in total unrecognized tax benefits, respectively, which have been reflected as a reduction in deferred tax assets.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31, 2025 and 2024 (in thousands): 2025 2024 Gross unrecognized tax benefits at the beginning of the year $ 1,198 $ 1,071 Increase related to prior year tax positions ( 127 ) — Increase related to current year tax positions — 127 Gross unrecognized tax benefits at the end of the year $ 1,071 $ 1,198 As of December 31, 2025 and 2024 , the Company had $ 1.1 million and $ 1.2 million in total unrecognized tax benefits, respectively, which have been reflected as a reduction in deferred tax assets.
Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. The Company has one reporting unit.
Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. The Company has two reporting unit.
F- 15 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation , which establishes accounting for equity instruments exchanged for employee and consulting services.
Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation , which establishes accounting for equity instruments exchanged for employee and consulting services.
F- 35 The Company accounted for the Penny Warrants as an equity classified instrument as they are indexed to the Company’s own stock and meet the conditions to be classified in equity under FASB ASC 815, Derivatives and Hedging, including sufficient available shares for the Company to settle the exercise of the warrants in shares.
The Company accounted for the Penny Warrants as an equity classified instrument as they are indexed to the Company’s own stock and meet the conditions to be classified in equity under FASB ASC 815, Derivatives and Hedging, including sufficient available shares of Common Stock for the Company to settle the exercise of the warrants in shares of Common Stock.
GLOPERBA License Agreement On June 14, 2022 (the “Original Signing Date”), the Company entered into a License and Commercialization Agreement with RxOmeg Therapeutics LLC (a/k/a Romeg Therapeutics, LLC) (“Romeg”) for the in-licensing of certain intellectual property rights from Romeg with respect to the commercialization of GLOPERBA, which was amended by that First Amendment to License and Commercialization Agreement, dated as of January 16, 2025 (such agreement, as amended, the “Romeg License Agreement”).
License Agreements GLOPERBA License Agreement On June 14, 2022, the Company entered into a License and Commercialization Agreement with RxOmeg Therapeutics LLC (a/k/a Romeg Therapeutics, LLC) (“Romeg”) for the in-licensing of certain intellectual property rights from Romeg with respect to the commercialization of GLOPERBA, which was amended by that First Amendment to License and Commercialization Agreement, dated as of January 16, 2025 (such agreement, as amended, the “Romeg License Agreement”).
Gloperba Rest of World License Agreement On February 28, 2025 (the “Effective Date”), the Company entered into a License Agreement (the “Gloperba License Agreement”) with Scilex Pharma and the Licensee with respect to (i) services, compositions, products, dosages and formulations comprising Gloperba that have been or are later developed by or on behalf of the Company, including the product and any future product defined as a “Licensed Product” under the Romeg License Agreement, as amended and as may be further amended or restated from time to time, and (ii) any related, improved, successor or replacement forms of any such product Controlled (as defined therein) by the Company ((i) and (ii) collectively, the “Gloperba Product”).
Gloperba Rest of World License Agreement On February 28, 2025 (the “Gloperba Effective Date”), the Company entered into a License Agreement (the “Gloperba License Agreement”) with Scilex Pharma and the Licensee with respect to (i) services, compositions, products, dosages and formulations comprising Gloperba that have been or are later developed by or on behalf of the Company, including the product and any future product defined as a “Licensed Product” under the Romeg License Agreement, as amended and as may be further amended or restated from time to time, and (ii) any related, improved, successor or F- 26 replacement forms of any such product Controlled (as defined therein) by the Company ((i) and (ii) together, the “Gloperba Product”).
If the reported last sale price of the Common Stock equals or exceeds $ 18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders, the Company may redeem all the Public Warrants at a price of $ 0.01 per warrant upon not less than 30 days’ prior written notice.
If the reported last sale price of the Common Stock equals or exceeds $ 630.00 per share post reverse split price for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders, the Company may redeem all the Public Warrants at a price of $ 0.01 per warrant upon not less than 30 days’ prior written notice.
The Company is currently developing three product candidates, SP-102 (10 mg, dexamethasone sodium phosphate viscous gel), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica for which the Company has completed a Phase 3 study (“SP-102” or “SEMDEXA”), SP-103 (lidocaine topical system) 5.4% (“SP-103”), a next-generation, triple-strength formulation of ZTlido, for the treatment of chronic neck pain and for which the Company completed a Phase 2 trial in acute low back pain (“LBP”) in the third quarter of 2023, and SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-burst release low dose naltrexone hydrochloride capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride being developed for the treatment of fibromyalgia, for which Phase 1 trials were completed in the second quarter of 2022.
The Company is currently developing three product candidates, SP-102 (10 mg, dexamethasone sodium phosphate viscous gel), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica for which the Company initiated a second Phase 3 study (“SP-102” or “SEMDEXA”) in September 2025, SP-103 (lidocaine topical system) 5.4% (“SP-103”), a next-generation, triple-strength formulation of ZTlido, for the treatment of chronic neck pain and for which the Company completed a Phase 2 trial in acute low back pain (“LBP”), and SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-burst release low dose naltrexone hydrochloride capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride being developed for the treatment of fibromyalgia, for which Phase 1 trials were completed.
The April 2024 RDO Placement Agent Warrants have an exercise price of $ 1.25 per share (which represents 125 % of the combined offering price per share of Common Stock and the April 2024 RDO Common Warrant sold in the April 2024 RDO), will become exercisable on the six-month anniversary of the date of issuance and expire five years from the commencement of sales in the April 2024 RDO.
The April 2024 RDO Placement Agent Warrants have an exercise price of $ 43.75 per share (which represents 125 % of the combined offering price per share of Common Stock and the April 2024 RDO Common Warrant sold in the April 2024 RDO), will become exercisable on the six-month anniversary of the date of issuance and expire five years from the commencement of sales in the April 2024 RDO.
Scilex Pharma shall use commercially reasonable and diligent efforts to obtain and maintain regulatory approvals for SP-103 and all existing Lido Products in each country or jurisdiction in the Licensor Territory (as defined therein).
Scilex Pharma shall use commercially reasonable and diligent efforts to obtain and maintain regulatory approvals for SP-103 and all existing Lido Products in each country or jurisdiction in the Licensor Territory.
The Company elected the fair value option to account for the purchased revenue liability (as described in Note 4 “Fair Value Measurements” below).
The Company elected the fair value option to account for the purchased revenue liability (as described in Note 5 “Fair Value Measurements” below).
Significant unobservable inputs assumptions included the likelihood of receiving FDA approval for SP-104, expected timing for receipt of FDA approval for SP-104, and a discount rate of 10.0 % . As of December 31, 2024 and 2023, the fair value of contingent consideration related to the Development Milestone Payment was $ 0.2 million .
Significant unobservable inputs assumptions included the likelihood of receiving FDA approval for SP-104, expected timing for receipt of FDA approval for SP-104, and a discount rate of 9.2 % . As of December 31, 2025 and 2024, the fair value of contingent consideration related to the Development Milestone Payment was $ 0.2 million .
Operating Leases The Company leases administrative and research and development facilities under various non-cancelable lease agreements. Facility leases generally provide for periodic rent increases and may include options to extend. As of December 31, 2024, the Company’s leases have remaining lease terms of approximately 2.8 years.
Operating Leases The Company leases administrative and research and development facilities under various non-cancelable lease agreements. Facility leases generally provide for periodic rent increases and may include options to extend. As of December 31, 2025, the Company’s leases have remaining lease terms of approximately 10.2 years.
The Tranche B Notes are measured at fair value on a recurring basis using the Level 3 inputs. The Company uses the Binomial Lattice Model valuation technique to measure the fair value of the Tranche B Notes. The fair value as of December 31, 2024, was determined to be $ 23.6 million .
The Tranche B Notes are measured at fair value on a recurring basis using the Level 3 inputs. The Company uses the Binomial Lattice Model valuation technique to measure the fair value of the Tranche B Notes. The fair value as of December 31, 2025 and 2024, was determined to be $ 17.5 million and $ 23.6 million.
Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25 % and 35 % to the Developers based on net profits . For each of the years ended December 31, 2024 and 2023, Scilex Pharma made royalty payments in the amount of $ 8.3 million .
Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25 % and 35 % to the Developers based on net profits . For each of the years ended December 31, 2025 and 2024, Scilex Pharma made royalty payments in the amount of $ 6.3 million and $ 8.3 million , respectively.
The terms of the Conversion Shares will be identical to those of the private placement shares that were issued to Denali Capital Global Investments, LLC in connection with Denali’s initial public offering (the “IPO”).
The terms of the Conversion Shares will be identical to those of the private placement shares that were issued to Denali Capital Global Investments, LLC in connection with Denali’s initial public offering (the “Denali IPO”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs of December 31, 2024, (i) outstanding Penny Warrants to purchase an aggregate of 6,500,000 shares of our Common Stock are exercisable under the terms thereof, the exercise price of which is $0.01 per share, (ii) outstanding February 2024 BDO Firm Warrants to purchase an aggregate of 3,803,447 shares of our Common Stock are exercisable under the terms thereof, the exercise price of which is $1.70 per share; (iii) outstanding February 2024 BDO Representative Warrants to purchase an aggregate of 470,588 shares of our Common Stock are exercisable under the terms thereof, the exercise price of which is $2.125 per share; (iv) outstanding Deposit Warrant to purchase an aggregate of 3,250,000 shares of our Common Stock are exercisable under the terms thereof, the exercise price of which is $1.20 per share, (v) outstanding April 2024 RDO Common Warrants to purchase an aggregate of 15,000,000 shares of our Common Stock are exercisable under the terms thereof, the exercise price of which is $1.10 per share and (vi) outstanding April 2024 RDO Placement Agent Warrants to purchase an aggregate of 1,200,000 shares of our Common Stock are exercisable under the terms thereof, the exercise price of which is $1.25 per share.
Biggest changeAs of December 31, 2025, we have outstanding (i) 3,803,447 February 2024 BDO Firm Warrants which are currently exercisable for an aggregate of up to 108,686 shares of our Common Stock, the exercise price of which is $59.50 per share; (ii) 470,588 February 2024 BDO Representative Warrants, which are currently exercisable for an aggregate of up to 13,446 shares of our Common Stock, the exercise price of which is $74.38 per share; (iii) the Deposit Warrant, which is currently exercisable for an aggregate of up to 3,250,000 shares of our Common Stock, at an exercise price of $1.20 per share and (iv) 1,200,000 April 2024 RDO Placement Agent Warrants, which are currently exercisable for an aggregate of up to 34,286 shares of our Common Stock, the exercise price of which is $43.75 per share.
The Oramed Note and the Tranche B Notes contain certain customary events of default, including, without limitation, a cross-default to other specified indebtedness or any other indebtedness involving an obligation of certain amount, a failure in payment of principal, as well as any bankruptcy, insolvency, reorganization event.
The Oramed Note and the Tranche B Notes contain certain customary events of default, including, without limitation, a cross-default to other specified indebtedness or any other indebtedness involving an obligation of a certain amount, a failure in payment of principal, as well as any bankruptcy, insolvency or reorganization event.
Our plans are substantially dependent upon the success of future sales of ZTlido, ELYXYB and GLOPERBA among which ELYXYB and GLOPERBA are still in the early stages of commercialization, and are dependent upon, among other things, the success of our marketing of ZTlido, ELYXYB and GLOPERBA and our ability to secure additional payor contracts with terms that are consistent with our business plan.
Our plans are substantially dependent upon the success of future sales of ZTlido, GLOPERBA and ELYXYB among which ELYXYB and GLOPERBA are still in the early stages of commercialization, and are dependent upon, among other things, the success of our marketing of ZTlido, ELYXYB and GLOPERBA and our ability to secure additional payor contracts with terms that are consistent with our business plan.
Risks Related to our Commercial Operations and Product Development We obtain, or historically have obtained, our commercial supply of certain of our products, the clinical supply of our product candidates and certain of the raw materials used in our product candidates from sole or single source suppliers and manufacturers.
Risks Related to our Commercial Operations and Product Development We obtain, or historically have obtained, our commercial supply of certain of our products, the clinical supply of our product candidates and certain of the raw materials used in our product candidates from sole or single source suppliers and manufacturers.
Delays in clinical trials could result in increased costs to us and delay our ability to obtain commercial approval and generate additional revenue. Before obtaining marketing approval for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates for their intended indications.
Delays in clinical trials could result in increased costs for us and delay our ability to obtain commercial approval and generate additional revenue. Before obtaining marketing approval for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates for their intended indications.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local statutes and regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals.
The process of obtaining regulatory approvals and subsequent compliance with appropriate federal, state and local statutes and regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals.
In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in products that we successfully develop and commercialize, if any.
In addition, while we cannot currently determine the amount of royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in products that we successfully develop and commercialize, if any.
See the section of this Annual Report on Form 10-K titled “ Business – Legal Proceedings ” for additional information regarding such proceedings. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
See the section of this Annual Report on Form 10-K titled “ Legal Proceedings ” for additional information regarding such proceedings. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
We may not be able to protect our intellectual property rights throughout the world. The requirements for patentability and the patent enforcement differ in many countries. Filing, prosecuting and defending patents on ZTlido, GLOPERBA, ELYXYB and all of our product candidates throughout the world would be prohibitively expensive.
We may not be able to protect our intellectual property rights throughout the world. The requirements for patentability and patent enforcement differ in many countries. Filing, prosecuting and defending patents on ZTlido, GLOPERBA, ELYXYB and all of our product candidates throughout the world would be prohibitively expensive.
Patents granted before the implementation of the UPC have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
Patents granted before the implementation of the UPC have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries who are signatories to the UPC. We cannot predict with certainty the long-term effects of any potential changes.
Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries who are signatories to the UPC. We cannot predict with certainty the long-term effects of any potential changes.
Risks Related to Government Regulations The regulatory approval processes of the FDA and comparable non-U.S. regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business, financial condition and results of operations will be substantially harmed.
Risks Related to Government Regulations The regulatory approval processes of the FDA and comparable non-U.S. regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business, financial condition and results of operations will be substantially harmed.
See below risk factor, “ The SPAC Warrants may never be in the money, they may expire worthless and the terms of the SPAC Warrants may be amended in a manner adverse to a holder if holders of a majority of the then-outstanding SPAC Warrants approve of such amendment .” The SPAC Warrants may never be in the money, they may expire worthless and the terms of the SPAC Warrants may be amended in a manner adverse to a holder if holders of a majority of the then-outstanding SPAC Warrants approve of such amendment.
See below risk factor, “ The SPAC Warrants may never be in the money, they may expire worthless and the terms of the SPAC Warrants may be amended in a manner adverse to a holder if holders of a majority of the then-outstanding SPAC Warrants approve of such amendment.
Patent and Trademark Office (“PTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the non-compliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or block our ability to make, use and sell our product candidates; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing products; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or 81 conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; • any successful intellectual property challenge to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our product candidates, proprietary technologies and their uses; and • an interference proceeding can be provoked by a third party or instituted by the PTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013.
Patent and Trademark Office (“PTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the non-compliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or block our ability to make, use and sell our product candidates; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing products; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; • any successful intellectual property challenge to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our product candidates, proprietary technologies and their uses; and • an interference proceeding can be provoked by a third party or instituted by the PTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013.
Additionally, if it is determined by the government, which could include a government agency such as CMS, Health Resources and Services Administration (“HRSA”), the VA, or by the Office of Inspector General (“OIG”) or Department of Justice (“DOJ”), that the Statutory Price Reporting was incorrect, causing the government to essentially pay more than they should through the reimbursement and/or discount, the manufacturer may be subject to significant False Claims Act investigations, civil monetary penalties and/or additional fines; • the Prescription Drug Marketing Act, which restricts the manner in which manufacturers may disseminate complimentary drug samples to healthcare practitioners, requires physical and accounting controls, and establishes penalties for improper sample distribution; and • state law equivalents of each of the above federal laws, such as licensing, anti-kickback, false claims, consumer protection and unfair competition laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing information and marketing expenditures, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
Additionally, if it is determined by the government, which could include a government agency such as CMS, Health Resources and Services Administration (“HRSA”), the VA, or by the Office of Inspector General (“OIG”) or Department of Justice (“DOJ”), that the Statutory Price Reporting was incorrect, causing the government to essentially pay more than they should through the reimbursement and/or discount, the manufacturer may be subject to significant False Claims Act investigations, civil monetary penalties and/or additional fines; • the Prescription Drug Marketing Act, which restricts the manner in which manufacturers may disseminate complimentary drug samples to healthcare practitioners, requires physical and accounting controls, and establishes penalties for improper sample distribution; and • state law equivalents of each of the above federal laws, such as licensing, anti-kickback, false claims, consumer protection and unfair competition laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government that 103 otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to file reports with states regarding pricing information and marketing expenditures, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
The amount and timing of our future funding requirements will depend on many factors, some of which are outside of our control, including but not limited to: • the costs and expenses associated with our ongoing commercialization efforts for ZTlido, GLOPERBA and ELYXYB; • the degree of success we experience in commercializing ZTlido, GLOPERBA and ELYXYB; • the revenue generated by sales of ZTlido, GLOPERBA, ELYXYB and other products that may be approved, if any; • the scope, progress, results and costs of conducting studies and clinical trials for our product candidates, SEMDEXA, SP-103 and SP-104; • the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates; • the costs of manufacturing ZTlido, GLOPERBA, ELYXYB and our product candidates; • the timing and amount of any milestone, royalty or other payments we are required to make pursuant to any current or future collaboration or license agreements; • our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; • the extent to which ZTlido, GLOPERBA, ELYXYB or any of our product candidates, if approved for commercialization, is adopted by the physician community; • our need to expand our research and development activities; • the costs of acquiring, licensing or investing in businesses, product candidates and technologies; • the effect of competing products and product candidates and other market developments; • the number and types of future products we develop and commercialize; • any product liability or other lawsuits related to our products; • the expenses needed to attract, hire and retain skilled personnel; • the costs associated with being a public company; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; • the costs related to servicing of our debt; • the costs of financing additional clinical, regulatory and commercial activities; and • the extent and scope of our general and administrative expenses.
The amount and timing of our future funding requirements will depend on many factors, some of which are outside of our control, including but not limited to: • the costs and expenses associated with our ongoing commercialization efforts for ZTlido, GLOPERBA and ELYXYB; • the degree of success we experience in commercializing ZTlido, GLOPERBA and ELYXYB; • the revenue generated by sales of ZTlido, GLOPERBA, ELYXYB and other products that may be approved, if any; • the scope, progress, results and costs of conducting studies and clinical trials for our product candidates, SEMDEXA, SP-103 and SP-104; 63 • the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates; • the costs of manufacturing ZTlido, GLOPERBA, ELYXYB and our product candidates; • the timing and amount of any milestone, royalty or other payments we are required to make pursuant to any current or future collaboration or license agreements; • our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; • the extent to which ZTlido, GLOPERBA, ELYXYB or any of our product candidates, if approved for commercialization, is adopted by the physician community; • our need to expand our research and development activities; • the costs of acquiring, licensing or investing in businesses, product candidates and technologies; • the effect of competing products and product candidates and other market developments; • the number and types of future products we develop and commercialize; • any product liability or other lawsuits related to our products; • the expenses needed to attract, hire and retain skilled personnel; • the costs associated with being a public company; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; • the costs related to servicing of our debt; • the costs of financing additional clinical, regulatory and commercial activities; and • the extent and scope of our general and administrative expenses.
Conducting business internationally involves a number of risks, including: • multiple, sometimes conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses; • difficulties in enforcing our intellectual property rights and in defending against third-party threats and intellectual property enforcement actions against us, our distributors or any of our third-party suppliers; • failure by us or our distributors to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidates, if approved, in various countries; • difficulties in managing foreign operations; • cost and availability of shipping and other means of product transportation; • foreign currency exchange rate fluctuations; • changes in duties and tariffs, license obligations and other non-tariff barriers to trade; • the imposition of new trade restrictions; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • complexities associated with managing multiple payor-reimbursement regimes or self-pay systems; 76 • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and • failure to comply with the FCPA, including its books and records provisions and its anti-bribery provisions, and similar anti-bribery and anti-corruption laws in other jurisdictions, for example, by failing to maintain accurate information and control over sales or distributors’ activities.
Conducting business internationally involves a number of risks, including: • multiple, sometimes conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses; • difficulties in enforcing our intellectual property rights and in defending against third-party threats and intellectual property enforcement actions against us, our distributors or any of our third-party suppliers; • failure by us or our distributors to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidates, if approved, in various countries; • difficulties in managing foreign operations; • cost and availability of shipping and other means of product transportation; • foreign currency exchange rate fluctuations; • changes in duties and tariffs, license obligations and other non-tariff barriers to trade; • the imposition of new trade restrictions; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • complexities associated with managing multiple payor-reimbursement regimes or self-pay systems; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and • failure to comply with the FCPA, including its books and records provisions and its anti-bribery provisions, and similar anti-bribery and anti-corruption laws in other jurisdictions, for example, by failing to maintain accurate information and control over sales or distributors’ activities.
Oishi and Itochu have the right to terminate the Product Development Agreement and the Commercial Supply Agreement under certain circumstances, including, among other things: (1) if we are in material breach of the agreement and the breach is not curable or if the breach is curable and we fail to cure such material breach within 180 days after notice requesting to cure; (2) if, at any time during the term of the Product Development Agreement and the Commercial Supply Agreement, the market conditions are such that (a) our total net profits for ZTlido and SP-103 are equal to or less than five percent of our net sales of ZTlido and SP-103 for a period of four or more consecutive quarters, or (b) the economic viability of ZTlido and SP-103 is affected significantly as evidenced by documentation and substantial information by any external circumstances deemed detrimental to all parties as agreed to by us, on the one hand, and Oishi and Itochu, on the other hand, and the parties are unable to resolve the concerns under the foregoing clauses (a) and (b) after 30 days of good-faith discussion; and (3) in the event of our bankruptcy or assignment for the benefit of creditors.
Oishi and Itochu have the right to terminate the Product Development Agreement and the Commercial Supply Agreement under certain circumstances, including, among other things: (1) if we are in material breach of the agreement and the breach is not curable or if the breach is curable and we fail to cure such material breach within 180 days after notice requesting to cure; (2) if, at any time during the term of the Product Development Agreement 65 and the Commercial Supply Agreement, the market conditions are such that (a) our total net profits for ZTlido and SP-103 are equal to or less than five percent of our net sales of ZTlido and SP-103 for a period of four or more consecutive quarters, or (b) the economic viability of ZTlido and SP-103 is affected significantly as evidenced by documentation and substantial information by any external circumstances deemed detrimental to all parties as agreed to by us, on the one hand, and Oishi and Itochu, on the other hand, and the parties are unable to resolve the concerns under the foregoing clauses (a) and (b) after 30 days of good-faith discussion; and (3) in the event of our bankruptcy or assignment for the benefit of creditors.
For example: • Others may be able to make products that are similar to ZTlido, GLOPERBA, ELYXYB or our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; • We or our licensors or strategic partners might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; 91 • We or our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions; • Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • Our pending patent applications may not lead to issued patents; • Issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; • Our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • We may not develop additional proprietary technologies that are patentable; and • The patents of others may have an adverse effect on our business.
For example: • Others may be able to make products that are similar to ZTlido, GLOPERBA, ELYXYB or our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; • We or our licensors or strategic partners might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • We or our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions; • Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • Our pending patent applications may not lead to issued patents; • Issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; • Our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • We may not develop additional proprietary technologies that are patentable; and • The patents of others may have an adverse effect on our business.
We cannot be certain that others have not filed patent applications for technology covered by our pending applications, or that we were the first to invent the technology, because: • some patent applications in the United States may be maintained in secrecy until the patents are issued; • patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived; • pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our product candidates or the use of our product candidates; • identification of third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims; • patent applications in the United States are typically not published until 18 months after the priority date; and • publications in the scientific literature often lag behind actual discoveries.
We cannot be certain that others have not filed patent applications for technology covered by our pending applications, or that we were the first to invent the technology, because: • some patent applications in the United States may be maintained in secrecy until the patents are issued; • patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived; • pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our product candidates or the use of our product candidates; 87 • identification of third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims; • patent applications in the United States are typically not published until 18 months after the priority date; and • publications in the scientific literature often lag behind actual discoveries.
Any claims of patent infringement asserted by third parties would be time-consuming and could: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; 83 • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property; • require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.
Any claims of patent infringement asserted by third parties would be time-consuming and could: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property; • require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.
Market acceptance of ZTlido, ELYXYB and GLOPERBA depends on a number of factors, including: • acceptance by physicians, major operators of clinics and patients of ZTlido, ELYXYB and GLOPERBA as a safe and effective treatment for the relief of neuropathic pain associated with PHN (ZTlido), acute migraine pain (ELYXYB), and prevention of gout flares (GLOPERBA); 55 • the availability, cost and potential advantages of alternative treatments, including less expensive generic products; • the effectiveness of our sales and marketing efforts; • the availability of coverage, adequacy of reimbursement and favorability of pricing policies by third-party payors and government authorities; • the timing of market introduction of other competitive products; • the product labeling or any product inserts required by the FDA; and • the prevalence and severity of adverse side effects.
Market acceptance of ZTlido, ELYXYB and GLOPERBA depends on a number of factors, including: • acceptance by physicians, major operators of clinics and patients of ZTlido, ELYXYB and GLOPERBA as a safe and effective treatment for the relief of neuropathic pain associated with PHN (ZTlido), acute migraine pain (ELYXYB), and prevention of gout flares (GLOPERBA); • the availability, cost and potential advantages of alternative treatments, including less expensive generic products; • the effectiveness of our sales and marketing efforts; • the availability of coverage, adequacy of reimbursement and favorability of pricing policies by third-party payors and government authorities; • the timing of market introduction of other competitive products; • the product labeling or any product inserts required by the FDA; and • the prevalence and severity of adverse side effects.
Disputes may arise between us and our licensors regarding intellectual property rights subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • our financial or other obligations under the license agreement; • whether and the extent to which our technology and processes infringe on intellectual property rights of the licensor that are not subject to the licensing agreement; • our right to sublicense intellectual property rights to third parties under collaborative development relationships; 80 • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Disputes may arise between us and our licensors regarding intellectual property rights subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • our financial or other obligations under the license agreement; • whether and the extent to which our technology and processes infringe on intellectual property rights of the licensor that are not subject to the licensing agreement; • our right to sublicense intellectual property rights to third parties under collaborative development relationships; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Regardless of the merits or eventual outcome, liability claims may result in: • loss of revenue from product sales; • decreased demand for our product candidates or products that we develop; • injury to our reputation; • withdrawal of clinical trial participants; • initiation of investigations by regulators; • restrictions on labeling, the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; and • the inability to commercialize our product candidates.
Regardless of the merits or eventual outcome, liability claims may result in: 78 • loss of revenue from product sales; • decreased demand for our product candidates or products that we develop; • injury to our reputation; • withdrawal of clinical trial participants; • initiation of investigations by regulators; • restrictions on labeling, the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; and • the inability to commercialize our product candidates.
Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or 65 our clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, participants being exposed to unacceptable health risks, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, participants being exposed to unacceptable health risks, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
It is not always possible to identify and deter misconduct by our employees, independent contractors, consultants, commercial partners and vendors, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations, FDA debarment, exclusion from government-funded healthcare programs or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
It is not always possible to identify and deter misconduct by our employees, independent contractors, consultants, commercial partners and vendors, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in 102 protecting us from governmental investigations, FDA debarment, exclusion from government-funded healthcare programs or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
Pursuant to the Certificate of Incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom, will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees or stockholders to us or our stockholders; (iii) any action asserting a claim against us or any of our current or former directors, officers, employees or stockholders arising pursuant to any provision of the DGCL, the Certificate of Incorporation or the Bylaws; (iv) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws; (v) any action or proceeding asserting a claim against us or any of our current or former directors, officers, employees or stockholders as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware and (vi) any action asserting an “internal corporate claim,” as that term is defined in Section 115 of the DGCL; 111 provided that , for the avoidance of doubt, the foregoing forum selection provision will not apply to claims arising under the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Pursuant to the Certificate of Incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom, will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees or stockholders to us or our stockholders; (iii) any action asserting a claim against us or any of our current or former directors, officers, employees or stockholders arising pursuant to any provision of the DGCL, the Certificate of Incorporation or the Bylaws; (iv) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws; (v) any action or proceeding asserting a claim against us or any of our current or former directors, officers, employees or stockholders as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware and (vi) any action asserting an “internal corporate claim,” as that term is defined in Section 115 of the DGCL; 114 provided that , for the avoidance of doubt, the foregoing forum selection provision will not apply to claims arising under the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Events that may prevent successful or timely completion of clinical development include: • delays in obtaining regulatory authorizations to commence a clinical trial or reaching a consensus with regulatory authorities on trial design; • delays in identifying prospective clinical investigators or clinical trial sites that have necessary qualifications, interest and capacity to perform a requested protocol; • delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • delays in obtaining approval from one or more institutional review boards (“IRBs”); • IRBs refusing to approve, suspending or terminating the trial at the investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • changes to the clinical trial protocol; • delays in recruiting suitable subjects to participate in our clinical trials; • failure by us, any CROs we engage or any other third parties to adhere to clinical trial requirements; • failure to perform in accordance with GCPs; • delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; • delays in subjects completing participation in a trial or returning for post-treatment follow-up; • clinical trial sites or subjects dropping out of a trial; • key investigators departing their clinical sites; • lack of adequate funding to continue the trial; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • subjects experiencing severe or unexpected drug-related adverse effects; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event, after an inspection of our clinical trial operations, trial sites or manufacturing facilities, or for other reasons; • occurrence of serious adverse events in our trials or in trials of the same class of agents conducted by other sponsors; • changes in regulatory requirements or guidance that require amending or submitting new clinical protocols; • a facility manufacturing our product candidates or any of their components being ordered by the FDA to temporarily or permanently shut down due to violations of cGMP regulations or other applicable requirements; • any changes to our manufacturing process that may be necessary or desired; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials and/or not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements; • third-party contractors not performing data collection or analysis in a timely or accurate manner; or • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by subcontractors in support of our marketing applications.
Events that may prevent successful or timely completion of clinical development include: • delays in obtaining regulatory authorizations to commence a clinical trial or reaching a consensus with regulatory authorities on trial design; • delays in identifying prospective clinical investigators or clinical trial sites that have necessary qualifications, interest and capacity to perform a requested protocol; • delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • delays in obtaining approval from one or more institutional review boards (“IRBs”); • IRBs refusing to approve, suspending or terminating the trial at the investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • changes to the clinical trial protocol; • delays in recruiting suitable subjects to participate in our clinical trials; 68 • failure by us, any CROs we engage or any other third parties to adhere to clinical trial requirements; • failure to perform in accordance with GCPs; • delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; • delays in subjects completing participation in a trial or returning for post-treatment follow-up; • clinical trial sites or subjects dropping out of a trial; • key investigators departing their clinical sites; • lack of adequate funding to continue the trial; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • subjects experiencing severe or unexpected drug-related adverse effects; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event, after an inspection of our clinical trial operations, trial sites or manufacturing facilities, or for other reasons; • occurrence of serious adverse events in our trials or in trials of the same class of agents conducted by other sponsors; • changes in regulatory requirements or guidance that require amending or submitting new clinical protocols; • a facility manufacturing our product candidates or any of their components being ordered by the FDA to temporarily or permanently shut down or conduct significant remediation due to violations of cGMP regulations or other applicable requirements; • any changes to our manufacturing process that may be necessary or desired; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials and/or not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements; • third-party contractors not performing data collection or analysis in a timely or accurate manner; or • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by subcontractors in support of our marketing applications.
If we, our CROs and other contractors and consultants are unable to prevent such cybersecurity attacks or privacy violations or implement satisfactory remedial measures, our 77 operations could be disrupted, we may suffer loss of reputation, we may be the subject of governmental investigations, legal claims, or litigation, or we may incur financial loss or other regulatory penalties, each of which may not be covered by our insurance and may be material to our Company as a whole.
If we, our CROs and other contractors and consultants are unable to prevent such cybersecurity attacks or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, we may suffer loss of reputation, we may be the subject of governmental investigations, legal claims, or litigation, or we may incur financial loss or other regulatory penalties, each of which may not be covered by our insurance and may be material to our Company as a whole.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, cease marketing ZTlido, GLOPERBA or ELYXYB, or developing our product candidates, limit our uses, pay royalties or redesign our infringing product candidates, which may be impossible or require substantial time and monetary expenditure.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses 92 from third parties, cease marketing ZTlido, GLOPERBA or ELYXYB, or developing our product candidates, limit our uses, pay royalties or redesign our infringing product candidates, which may be impossible or require substantial time and monetary expenditure.
In addition, potential policy changes by the new administration may introduce additional uncertainty for our business, including changes to the level of scrutiny applied by the Health Resources and Services Administration (“HRSA”) to enforce non-compliance with the 340B program, new price restrictions on products we sell to Medicaid, Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in multisource markets.
In addition, potential policy changes by the current administration may introduce additional uncertainty for our business, including changes to the level of scrutiny applied by the Health Resources and Services Administration (“HRSA”) to enforce non-compliance with the 340B program, new price restrictions on products we sell to Medicaid, Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in multisource markets.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may be required to relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such future product candidates.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may be required to relinquish valuable rights 73 to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such future product candidates.
In addition, regulatory authorities may approve any of our product candidates for fewer or more limited indications 93 than we request, may not approve the price we intend to charge for our product candidates, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.
In addition, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our product candidates, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.
Further, the global equity markets in general have recently experienced extreme price and volume fluctuations, including as a result of the COVID-19 pandemic, economic uncertainty and increased interest rates, inflation, the government closure of Silicon Valley Bank 105 and Signature Bank, and liquidity concerns at other financial institutions that may be unrelated to our operating performance.
Further, the global equity markets in general have recently experienced extreme price and volume fluctuations, including as a result of the COVID-19 pandemic, economic uncertainty and increased interest rates, inflation, the government closure of Silicon Valley Bank and Signature Bank, and liquidity concerns at other financial institutions that may be unrelated to our operating performance.
In some instances, there can be significant variability in safety or efficacy results between different clinical trials or clinical trial sites for the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial procedures and the rate of dropout among clinical trial participants.
In some instances, there can be significant variability in safety or efficacy results between different clinical trials or clinical trial sites for the same product candidate due to numerous factors, including changes 74 in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial procedures and the rate of dropout among clinical trial participants.
If the Product Development Agreement is terminated for certain reasons, such as our material breach of the agreement, our bankruptcy, or lack of economic viability, we will be required to transfer all licensed intellectual property rights, including those relating to ZTlido and SP-103, to Oishi and Itochu or their designee, at our own cost and expense.
If the Product Development Agreement is terminated for certain reasons, such as our material breach of the agreement, our bankruptcy, or lack of economic viability, we will be required to transfer all licensed intellectual property rights, including those relating to ZTlido and 82 SP-103, to Oishi and Itochu or their designee, at our own cost and expense.
In the United States, for small molecule drug products, such as ZTlido, GLOPERBA and ELYXYB, the Hatch-Waxman Act provides generic companies powerful incentives to seek to invalidate our pharmaceutical patents. As a result, we expect that our U.S. patents on major pharmaceutical products will be 85 routinely challenged, and there can be no assurance that our patents will be upheld.
In the United States, for small molecule drug products, such as ZTlido, GLOPERBA and ELYXYB, the Hatch-Waxman Act provides generic companies powerful incentives to seek to invalidate our pharmaceutical patents. As a result, we expect that our U.S. patents on major pharmaceutical products will be routinely challenged, and there can be no assurance that our patents will be upheld.
Efforts to ensure that our business practices and arrangements with third parties will 99 comply with applicable healthcare laws and regulations will involve substantial costs. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
Efforts to ensure that our business practices and arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
Lifecore has the right to terminate the Lifecore Master Services Agreement under certain circumstances, including, but not limited to: (1) if we are in material breach of the agreement and fail to cure such breach within 30 days of written notice; (2) if we (a) become insolvent, (b) 62 cease to function as a going concern, (c) become convicted of or plead guilty to a charge of violating any law relating to either party’s business, or (d) engage in any act which materially impairs goodwill associated with SEMDEXA or materially impairs the terminating party’s trademark or trade name; (3) if we fail to pay past due invoices upon 30 days’ written notice, or (4) if we reject or fail to respond to a major change proposed by Lifecore that does not change Semnur’s written and approved acceptance criteria in its product specifications.
Lifecore has the right to terminate the Lifecore Master Services Agreement under certain circumstances, including, but not limited to: (1) if we are in material breach of the agreement and fail to cure such breach within 30 days of written notice; (2) if we (a) become insolvent, (b) cease to function as a going concern, (c) become convicted of or plead guilty to a charge of violating any law relating to either party’s business, or (d) engage in any act which materially impairs goodwill associated with SEMDEXA or materially impairs the terminating party’s trademark or trade name; (3) if we fail to pay past due invoices upon 30 days’ written notice, or (4) if we reject or fail to respond to a major change proposed by Lifecore that does not change Legacy Semnur’s written and approved acceptance criteria in its product specifications.
Our business may suffer reputational harm due to failures of our product candidates. The failure of any of our product candidates could have a lasting negative impact on our reputation, which could, in turn, impact our ability to successfully enter into future licensing arrangements or other transactions with potential counterparties, raise future capital or attract key personnel to join us.
Our business may suffer reputational harm due to failures of our product candidates. 75 The failure of any of our product candidates could have a lasting negative impact on our reputation, which could, in turn, impact our ability to successfully enter into future licensing arrangements or other transactions with potential counterparties, raise future capital or attract key personnel to join us.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal health care programs and commercial payers will pay for healthcare products and services, which could result in reduced demand for ZTlido, GLOPERBA, ELYXYB and our product candidates, if approved, or additional pricing pressures.
We expect that additional U.S. federal healthcare reform measures will be adopted or implemented in the future, any of which could limit the amounts that federal health care programs and commercial payers will pay for healthcare products and services, which could result in reduced demand for ZTlido, GLOPERBA, ELYXYB and our product candidates, if approved, or additional pricing pressures.
In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to it, because some patients who have 67 opted to enroll in our trials may instead opt to enroll in a trial being conducted by a competitor.
In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to it, because some patients who have opted to enroll in our trials may instead opt to enroll in a trial being conducted by a competitor.
An adverse determination in any such proceeding could reduce the scope of, or invalidate, our owned or in-licensed patent rights, allow third parties to commercialize ZTlido, GLOPERBA, ELYXYB and our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. 86 Additionally, the U.S.
An adverse determination in any such proceeding could reduce the scope of, or invalidate, our owned or in-licensed patent rights, allow third parties to commercialize ZTlido, GLOPERBA, ELYXYB and our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Additionally, the U.S.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals and methods of treatment of the human body, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents 93 and other intellectual property protection, particularly those relating to biopharmaceuticals and methods of treatment of the human body, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. 100 Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.
The American Taxpayer Relief Act of 2012 further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.
If approved, our product 68 candidates will face competition from commercially available drugs as well as drugs that are in the development pipelines of our competitors and later enter the market. Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates less competitive.
If approved, our product candidates will face competition from commercially available drugs as well as drugs that are in the development pipelines of our competitors and later enter the market. Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates less competitive.
In addition, these breaches and other unauthorized access to our systems can be difficult to detect, and any delay in identifying any such event may lead to increased harm of the type described above. Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and results of operations.
In addition, these breaches and other unauthorized access to our systems can be difficult to detect, and any delay in identifying any such event may lead to increased harm of the type described above. 81 Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and results of operations.
We and/or our directors and officers may be subject to litigation or other actions as a result of or relating to our internal investigation and our failure to timely file the Q3 Form 10-Q with the SEC and an unfavorable outcome with respect to such matters could harm our business, financial condition and results of operations.
We and/or our directors and officers may be subject to litigation or other actions as a result of or relating to our internal investigation and our failure to timely file the 2024 Q3 Form 10-Q with the SEC and an unfavorable outcome with respect to such matters could harm our business, financial condition and results of operations.
On March 27, 2020, then-President Trump signed into law the CARES Act, which included certain changes in tax law (including to the TCJA) intended to stimulate the U.S. economy in light of the COVID-19 pandemic, including temporary beneficial changes to the treatment of net operating losses, interest deductibility limitations and payroll tax matters.
On March 27, 2020, President Trump signed into law the CARES Act, which included certain changes in tax law (including to the TCJA) intended to stimulate the U.S. economy in light of the COVID-19 pandemic, including temporary beneficial changes to the treatment of net operating losses, interest deductibility limitations and payroll tax matters.
Risks Related to our Business and Operations • If we are unable to retain our key executives, it may delay our development efforts and harm our business, financial condition and results of operations. • Any disruption in our research and development facilities could adversely affect our business, financial condition and results of operations. 54 Risks Related to our Intellectual Property • We are substantially dependent on the intellectual property we in-license from Oishi and Itochu, and if we lose the right to license such intellectual property or if the Product Development Agreement is terminated for any reason, our ability to commercialize ZTlido and develop and commercialize SP-103 would be harmed. • We are party to the Romeg License Agreement for the in-licensing of certain intellectual property rights from Romeg with respect to the commercialization of GLOPERBA, and if we lose the right to license such intellectual property or if the Romeg License Agreement is terminated for any reason, our ability to commercialize GLOPERBA would be harmed. • If we are unable to maintain patent protection for ZTlido, GLOPERBA, ELYXYB and our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
Risks Related to our Business and Operations • If we are unable to retain our key executives, it may delay our development efforts and harm our business, financial condition and results of operations. • Any disruption in our research and development facilities could adversely affect our business, financial condition and results of operations. 57 Risks Related to our Intellectual Property • We are substantially dependent on the intellectual property we in-license from Oishi and Itochu, and if we lose the right to license such intellectual property or if the Product Development Agreement is terminated for any reason, our ability to commercialize ZTlido and develop and commercialize SP-103 would be harmed. • We are party to the Romeg License Agreement for the in-licensing of certain intellectual property rights from Romeg with respect to the commercialization of GLOPERBA, and if we lose the right to license such intellectual property or if the Romeg License Agreement is terminated for any reason, our ability to commercialize GLOPERBA would be harmed. • If we are unable to maintain patent protection for ZTlido, GLOPERBA, ELYXYB and our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
In the event that Lifecore decides to terminate the Lifecore Master Services Agreement, finding an alternative manufacturer on commercially reasonable terms, or at all, may be difficult. On June 6, 2023, Semnur entered into the Second Amendment to Lifecore Master Services Agreement with Lifecore, which extended the term of the agreement until December 31, 2028.
In the event that Lifecore decides to terminate the Lifecore Master Services Agreement, finding an alternative manufacturer on commercially reasonable terms, or at all, may be difficult. On June 6, 2023, Legacy Semnur entered into the Second Amendment to Lifecore Master Services Agreement with Lifecore, which extended the term of the agreement until December 31, 2028.
The licensing and acquisition of third-party proprietary rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party proprietary rights that we may 82 consider necessary or attractive in order to commercialize our product candidates.
The licensing and acquisition of third-party proprietary rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party proprietary rights that we may consider necessary or attractive in order to commercialize our product candidates.
While we do not intend to engage in unfair or deceptive acts or practices, the FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may be result in FTC enforcement. Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.
While we do not intend to engage in unfair or deceptive acts or practices, the FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may result in FTC enforcement. Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.
Pursuant to the Oramed Note, since the outstanding principal of the Oramed Note was not repaid in full on or prior to March 21, 2024, an exit fee of $3,056,250 has been earned with respect to the Oramed Note, which shall be due and payable on the date the outstanding principal amount of the Oramed Note is paid in full.
Pursuant to the Oramed Note, since the outstanding principal of the Oramed Note was not repaid in full on or prior to March 21, 2024, an exit fee of $3,056,250 has been earned with respect to the Oramed Note, which shall be due and payable on the date the outstanding 60 principal amount of the Oramed Note is paid in full.
As previously announced, our Board authorized our management to explore ways in which to maximize the value of Semnur and SP-102 (SEMDEXA™), the product candidate held by Semnur, for us and our stockholders, including by way of conducting a spin-off, merger, dividend, reclassification or other similar transaction.
As previously announced, our Board authorized our management to explore ways in which to maximize the value of Legacy Semnur, and SP-102 (SEMDEXA™), the product candidate held by Legacy Semnur, for us and our stockholders, including by way of conducting a spin-off, merger, dividend, reclassification or other similar transaction.
If a manufacturer overcharges the government in connection with its arrangements with Federal Supply Schedule or Tricare, the manufacturer may be required to refund the difference to the government. Failure to make necessary disclosures or to identify contract overcharges can result in allegations 102 against us under the False Claims Act and other laws and regulations.
If a manufacturer overcharges the government in connection with its arrangements with Federal Supply Schedule or Tricare, the manufacturer may be required to refund the difference to the government. Failure to make necessary disclosures or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
To the extent that the results of the trials are not satisfactory to the FDA or comparable non-U.S. regulatory authorities for support of a marketing approval, we may be required to expend significant resources, which may not be available to us, to conduct 71 additional trials in support of potential approval of our product candidates.
To the extent that the results of the trials are not satisfactory to the FDA or comparable non-U.S. regulatory authorities for support of a marketing approval, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
Generally, patents are granted a term of 20 years from the earliest claimed non-provisional filing date. In certain instances, patent term can be adjusted and increased to recapture a portion of delay incurred by the PTO in examining the patent application. The scope of patent protection may also be limited.
Generally, patents are granted a term of 20 years from the earliest claimed non-provisional filing date. In certain instances, patent terms can be adjusted and increased to recapture a portion of delay incurred by the PTO in examining the patent application. The scope of patent protection may also be limited.
The realization of any of the above risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of our Common Stock. The equity markets in general have recently experienced extreme price and volume fluctuations.
The realization of any of the 108 above risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of our Common Stock. The equity markets in general have recently experienced extreme price and volume fluctuations.
We could experience delays in satisfying regulatory authorities or manufacturing problems that result in delays in our development or commercialization programs, limit the supply of our product candidates, or otherwise harm our business. 72 We currently depend on contract manufacturers to conduct the manufacturing and supply activities for ZTlido, GLOPERBA, ELYXYB and our product candidates.
We could experience delays in satisfying regulatory authorities or manufacturing problems that result in delays in our development or commercialization programs, limit the supply of our product candidates, or otherwise harm our business. We currently depend on contract manufacturers to conduct the manufacturing and supply activities for ZTlido, GLOPERBA, ELYXYB and our product candidates.
Most of our revenue to date is attributable to sales of ZTlido, and we expect that sales of ZTlido will account for most of our revenue for at least the near term. Our relatively short operating history as a company makes any assessment of our future success and viability subject to significant uncertainty.
Most of our revenue to date is attributable to sales of ZTlido, and we expect that 59 sales of ZTlido will account for most of our revenue for at least the near term. Our relatively short operating history as a company makes any assessment of our future success and viability subject to significant uncertainty.
We face significant competition and our competitors may discover, develop or commercialize products faster or more successfully than us. The biotechnology and pharmaceutical industries are characterized by intense competition and rapid technological advances. In addition, the competition in the pain management market, and other relevant markets, is intense.
We face significant competition and our competitors may discover, develop or commercialize products faster or more successfully than us. 71 The biotechnology and pharmaceutical industries are characterized by intense competition and rapid technological advances. In addition, the competition in the pain management market, and other relevant markets, is intense.
Moreover, even when we obtain agreements assigning intellectual property to us, the assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
Moreover, even when we obtain agreements assigning intellectual property to us, the assignment of intellectual property rights may not be self-executing or 91 the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
Any brand names we intend to use for our product candidates will require authorization from the FDA regardless of whether we have secured a formal trademark registration from the PTO. The FDA typically conducts a review of proposed product brand names, including an evaluation of potential for confusion with other product names.
Any brand name we intend to use for our product candidates will require authorization from the FDA regardless of whether we have secured a formal trademark registration from the PTO. The FDA typically conducts a review of proposed product brand names, including an evaluation of potential for confusion with other product names.
We have the ability to redeem outstanding SPAC Warrants (other than Private Warrants still held by the initial purchasers thereof) at any time after they become exercisable and prior to their expiration, at a price of $0.01 per SPAC Warrant, provided that the closing price of our Common Stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on each of the 20 trading days within any 30-trading-day period commencing after the SPAC Warrants become exercisable and ending on the third trading day prior to the date on which notice of redemption is given.
We have the ability to redeem outstanding SPAC Warrants (other than Private Warrants still held by the initial purchasers thereof) at any time after they become exercisable and prior to their expiration, at a price of $0.01 per SPAC Warrant, provided that the closing price of our Common Stock equals or exceeds $630.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on each of the 20 trading days within any 30-trading-day period commencing after the SPAC Warrants become exercisable and ending on the third trading day prior to the date on which notice of redemption is given.
It is 64 possible that conflicts may arise with our collaborators, such as conflicts concerning the achievement of performance milestones, or the interpretation of significant terms under any agreement, such as those related to financial obligations or the ownership or control of intellectual property developed during the collaboration.
It is possible that conflicts may arise with our collaborators, such as conflicts concerning the achievement of performance milestones, or the interpretation of significant terms under any agreement, such as those related to financial obligations or the ownership or control of intellectual property developed during the collaboration.
We may not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. Additionally, coverage may be more limited than the purposes for which the product is approved by the FDA or similar regulatory authorities outside of the United States.
We may not be able to provide sufficient data to gain acceptance with respect to coverage and reimbursement. Additionally, 72 coverage may be more limited than the purposes for which the product is approved by the FDA or similar regulatory authorities outside of the United States.
Even if we are able to identify an acquisition that we would like to consummate, we may not be able to complete the acquisition on commercially reasonable 75 terms or the target may be acquired by another company. We may enter into negotiations for acquisitions that are not ultimately consummated.
Even if we are able to identify an acquisition that we would like to consummate, we may not be able to complete the acquisition on commercially reasonable terms, or the target may be acquired by another company. We may enter into negotiations for acquisitions that are not ultimately consummated.
Furthermore, the Inflation Reduction Act of 2022 (the “IRA”), PL 117-169, seeks to limit manufacturers’ price increases for drugs reimbursed by Medicare, to not more than the rate of inflation, at least where those increases would otherwise affect payments under Medicare.
Furthermore, the Inflation Reduction Act of 2022 (the “IRA”), PL 117-169, seeks to limit manufacturers’ price increases for drugs 106 reimbursed by Medicare, to not more than the rate of inflation, at least where those increases would otherwise affect payments under Medicare.
Upon consummation of specified fundamental transactions, the successor entity must confirm that upon conversion or redemption of the Tranche B Notes thereafter, shares of the successor entity will be issuable upon such conversion or redemption. The holders of the Tranche B Notes also have certain redemption rights upon a fundamental transaction constituting a change of control.
Upon consummation of specified fundamental transactions, the successor entity must confirm that upon conversion or redemption of the Tranche B Notes thereafter, shares of the successor entity will be issuable 60 upon such conversion or redemption. The holders of the Tranche B Notes also have certain redemption rights upon a fundamental transaction constituting a change of control.
If we fail to achieve certain milestones in our Product Development Agreement with Itochu and Oishi, we could lose rights that are important to our business. Certain of our existing license and supply agreements impose various milestone and other obligations on us.
If we fail to achieve certain milestones in our Product Development Agreement with Itochu and Oishi, we could lose rights that are important to our business. Certain of our existing license and supply agreements impose various milestones and other obligations on us.
There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can prevent a patent from issuing from a pending patent application, or be used to invalidate a patent.
There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can prevent a patent from issuing 84 from a pending patent application, or be used to invalidate a patent.
After a period for public comment on the administrative order, the FDA is able to issue a final administrative order, rather than a regulation, permitting the drug to be marketed over the counter. In 2023, the FDA has posted a final administrative order for external analgesic drug products for OTC human use.
After a period for public comment on the administrative order, the FDA is able to issue a final administrative order, rather than a regulation, permitting the drug to be marketed over the counter. In 2023, the FDA posted a final administrative order for external analgesic drug products for OTC human use.
Pursuant to the Amended and Restated Registration Rights Agreement, dated as of November 10, 2022, by and among us, Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd, Sorrento Therapeutics, Inc. and certain security holders set forth on the signature pages thereto (the “Registration Rights Agreement”), which was entered into in connection with the Business Combination, certain stockholders of Vickers and Legacy Scilex can each demand that we register their registrable securities under certain circumstances and will each also have piggyback registration rights for these securities.
Pursuant to the Amended and Restated Registration Rights Agreement, dated as of November 10, 2022, by and among us, Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd, Sorrento Therapeutics, Inc. and certain security holders set forth on the signature pages thereto (the “November 2022 Registration Rights Agreement”), which was entered into in connection with the Business Combination, certain stockholders of Vickers and Legacy Scilex can each demand that we register their registrable securities under certain circumstances and will each also have piggyback registration rights for these securities.
Any problems in our manufacturing process or facilities could make us a less attractive collaborator for potential partners, including larger biotechnology companies and academic research institutions, which could limit our access to additional attractive development programs.
Any problems in our manufacturing process or 76 facilities could make us a less attractive collaborator for potential partners, including larger biotechnology companies and academic research institutions, which could limit our access to additional attractive development programs.
There may be third-party patents, of which we are currently unaware, with claims to materials, formulations, methods of doing research, methods of manufacture or methods for treatment related to the use or manufacture of ZTlido, 88 GLOPERBA, ELYXYB or our product candidates.
There may be third-party patents, of which we are currently unaware, with claims to materials, formulations, methods of doing research, methods of manufacture or methods for treatment related to the use or manufacture of ZTlido, GLOPERBA, ELYXYB or our product candidates.
We face the risk of potential unauthorized disclosure or infringement, misappropriation or other violation of our intellectual property by CROs, which may reduce our trade secret and intellectual property protection and allow our potential competitors to access and exploit our proprietary technology.
We face the risk of potential unauthorized disclosure or infringement, misappropriation or other violation of our intellectual property by 67 CROs, which may reduce our trade secret and intellectual property protection and allow our potential competitors to access and exploit our proprietary technology.
If ZTlido, GLOPERBA, ELYXYB or any of our product candidates, methods, processes and other technologies are alleged to infringe on or be improperly based on the proprietary rights of other parties, we could face adverse consequences.
If ZTlido, GLOPERBA, ELYXYB 86 or any of our product candidates, methods, processes and other technologies are alleged to infringe on or be improperly based on the proprietary rights of other parties, we could face adverse consequences.
District Court for the Southern District of Florida alleging infringement of certain Orange Book patents covering ZTlido. See the section of this Annual Report on Form 10-K titled “ Business — Legal Proceedings ” for additional information regarding such proceedings.
District Court for the Southern District of Florida alleging infringement of certain Orange Book patents covering ZTlido. See the section of this Annual Report on Form 10-K titled “ Legal Proceedings ” for additional information regarding such proceedings.
In February 2024, we had a Type D meeting with the FDA to preview a newly designed trial, in order to reduce the potential need for any other additional trials prior to a 505(b)(2) NDA filing.
In February 2024, we had a Type D meeting with the FDA to preview the newly designed trial with the FDA, in order to reduce the potential need for any other additional confirmatory trials prior to a 505(b)(2) NDA filing.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+5 added−1 removed9 unchanged
Biggest changeOur Board and the Audit Committee also receive prompt and timely information from the Senior Director of IT and executive leadership regarding any cybersecurity risks that meet certain reporting thresholds, as well as ongoing updates regarding any such risk. Finally, the Incident Response Manager briefs corporate leadership on lessons learned from the incident during or after the recovery phase.
Biggest changeThe Board and the Audit Committee receive prompt updates from management regarding any cybersecurity risks that meet reporting thresholds and are briefed on lessons learned after the recovery phase, reinforcing their role in strategic oversight and accountability.
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition as of December 31, 2024 .
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition as of December 31, 2025 .
The Senior Director of IT acts as the Incident Manager and meets regularly with our Incident Response Team, including members of Financial Risk Management, IT Security and Human Resources senior management to discuss the necessary measures to take prior to and during an incident.
The Senior Director of IT acts as the Incident Manager and meets regularly with our Incident Response Team, including members of Financial Risk Management, IT Security, legal counsel, Internal Control and Human Resources senior management to discuss the necessary measures to take prior to and during an incident.
The Senior Director of IT, in collaboration with a team of IT professionals, our legal counsel and Human Resources, are tasked with implementing a program designed to protect our information systems from cybersecurity threats and manage material risks. The Senior Director of IT has served in various roles in information technology and information security for over 20 years.
The Senior Director of IT, in collaboration with a team of IT professionals, legal counsel, Internal Control, and Human Resources, 127 implements programs designed to protect information systems from cybersecurity threats and manage material risks.
For more information, please see the risk factor disclosures included in Item 1A of this Annual Report on Form 10-K. 116
For more information, please see the risk factor disclosures included in Item 1A of this Annual Report on Form 10-K. This ongoing assessment and communication between management and the Board ensures that cybersecurity risks are managed effectively and that both operational and strategic responses are aligned with the Company’s objectives.
The Senior Director of IT and senior management are informed about and monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to the Audit Committee when appropriate.
With over 20 years of experience, the Senior Director of IT is responsible for overseeing the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents in real time. Senior management monitors these activities and reports significant threats and incidents to the Audit Committee.
Removed
In the event of an incident, the Incident Manager meets regularly with the executive leadership team and keeps them apprised of the status of any incident during the incident response.
Added
In addition to these oversight activities, the Audit Committee and the Board play a pivotal role in ensuring the Company’s cybersecurity strategy aligns with its overall risk management framework.
Added
They are responsible for reviewing and approving major cybersecurity policies, monitoring the effectiveness of the Company’s risk mitigation efforts, and staying informed about significant incidents or threats that may impact business operations. The Board also ensures that management has the resources and authority needed to implement cybersecurity initiatives and provides guidance on prioritizing investments in information security.
Added
Management’s responsibilities extend to the day-to-day administration of cybersecurity policies, processes, and practices. This includes proactively monitoring for threats, conducting vulnerability assessments, responding to incidents, and providing regular training to employees. In the event of an incident, the Incident Manager collaborates closely with executive leadership, keeping them informed of the incident’s status and coordinating response actions.
Added
Management is also tasked with continuously improving the Company’s cybersecurity posture by learning from past incidents and adapting policies and procedures accordingly. Furthermore, management ensures compliance with recognized frameworks such as the NIST Cybersecurity Framework and oversees the engagement of third-party providers for independent risk assessments.
Added
Management’s operational responsibilities are complemented by the Board’s strategic oversight, ensuring that the Company stays ahead of evolving cybersecurity risks and maintains a comprehensive risk management strategy.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+3 added−4 removed3 unchanged
Biggest changeDividends Except as set forth below, we have never declared or paid any dividends on shares of our Common Stock. We anticipate that we will retain all of our future earnings, if any, to fund the development and growth of our business. Any future determination to pay dividends on our capital stock will be at the discretion of our Board.
Biggest changeWe anticipate that we will retain all of our future earnings, if any, to fund the development and growth of our business. Any future determination to pay dividends on our capital stock will be at the discretion of our Board.
Further, our ability to pay dividends may be limited by covenants of any existing outstanding indebtedness and future outstanding indebtedness we or our subsidiaries incur. Securities Authorized for Issuance Under Equity Compensation Plans See Item 12 of Part III for information regarding securities authorized for issuance under our equity compensation plans. Unregistered Sales of Equity Securities 118 None.
Further, our ability to pay dividends may be limited by covenants of any existing outstanding indebtedness and future outstanding indebtedness we or our subsidiaries incur. Securities Authorized for Issuance Under Equity Compensation Plans See Item 12 of Part III for information regarding securities authorized for issuance under our equity compensation plans.
Holders As of March 25, 2025, there were 315 holders of record of our Common Stock and two holders of record of our Public Warrants, which amount does not include participants of The Depository Trust Company or beneficial owners holding shares through nominee names.
Holders As of April 2 2026, there were 120 holders of record of our Common Stock and two holders of record of our Public Warrants, which amount does not include participants of The Depository Trust Company or beneficial owners holding shares through nominee names.
Removed
As previously disclosed on October 27, 2024, our Board declared a stock dividend (the “Dividend”) consisting of an aggregate of 5,000,000 shares (the “Dividend Stock”) of Series 1 Mandatory Exchangeable Preferred Stock, par value $0.0001 per share, to record holders of the following Company securities as of the close of business on November 7, 2024 (which date was subsequently changed to April 11, 2025) (the “Record Date”): (i) our Common Stock (such record holders, the “Record Common Holders”), (ii) certain warrants to purchase Common Stock that have not been exercised prior to the Record Date (and which have the right to participate in the Dividend pursuant to the terms of their respective warrants, other than, for the avoidance of doubt any warrants to purchase Common Stock with an exercise price of $11.50 per share, and any other warrants that by their terms have not vested and are therefore not entitled to participate in the Dividend) (such warrants, the “Participating Warrants” and such record holders, the “Record Warrant Holders”), (iii) the Tranche B Notes issued by us in October 2024 (such notes, the “Participating Notes” and such record holders, the “Record Note Holders”), and (iv) our Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock” and such record holder, the “Record Preferred Holder” and together with the Record Common Holders, the Record Warrant Holders, and the Record Note Holders, the “Record Holders”).
Added
Dividends Except with respect to the stock dividend of Series 1 Mandatory Exchangeable Preferred Stock, par value $0.0001 per share, announced in October 2024, which dividend lapsed, unpaid, by the terms of the Certificate of Designations for such series of preferred stock, we have never declared or paid any dividends on shares of our Common Stock.
Removed
Subject to the Board’s right to change the Record Date, the Dividend (unless otherwise determined by the Board) shall be paid on such date to be determined by subsequent resolutions of the Board, which payment date shall be within 60 days following the Record Date (i.e., by June 10, 2025) (such date as determined by the Board, the “Payment Date”) and shall be apportioned on a pro rata basis among the Record Holders in accordance with each Record Holder’s ownership percentage of our common stock (assuming the full exercise of all Participating Warrants to purchase common stock held by the Record Warrant Holders, the conversion of all Participating Notes held by the Record Note Holders and deemed conversion of all outstanding Series A Preferred Stock held by the Record Preferred Holder) as of the Record Date as set forth in the records of our transfer agent (with respect to the Record Common Holders and Record Preferred Holder) and ours (with respect to the Record Warrant Holders and the Record Note Holders) as of the Record Date.
Added
Unregistered Sales of Equity Securities Except as previously reported in our Current Reports on Form 8-K, we did not undertake any unregistered sales of our equity securities during the year ended December 31, 2025.
Removed
As of the date of this Annual Report on Form 10-K, the Board has not yet set a Payment Date for the Dividend and retains the right to revoke the Dividend and change the Record Date.
Added
We did not repurchase any shares or other units of any class of our equity securities registered under Section 12 of the Exchange Act during the year ended December 31, 2025. Item 6. [Reserved] 129
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Total number of warrants purchased Average price paid per warrant September 1 – September 30, 2024 4,000,000 $0.075(1) Total 4,000,000 $0.075 (1) As previously disclosed on September 23, 2024, we entered into a letter agreement with Oramed (the “Oramed Letter Agreement”), dated as of September 20, 2024, pursuant to which we agreed to, among other things, pay Oramed $300,000 to repurchase 4,000,000 SPAC Warrants held by Oramed.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

119 edited+96 added−59 removed79 unchanged
Biggest changeResults of Operations The following tables summarize our results of operations for the years ended December 31, 2024 and 2023 (in thousands) : Year Ended December 31, 2024 2023 Changes Statements of Operations Data: Net revenue $ 56,590 $ 46,743 $ 9,847 Net operating costs and expenses: Cost of revenue 16,689 15,681 1,008 Research and development 9,641 12,746 (3,105 ) Selling, general and administrative 119,016 119,641 (625 ) Intangible amortization 4,031 4,106 (75 ) Legal settlements (9,391 ) — (9,391 ) Total net operating costs and expenses 139,986 152,174 (12,188 ) Loss from operations (83,396 ) (105,431 ) 22,035 Other (income) expense, net: (Gain) loss on derivative liability (17,378 ) 512 (17,890 ) Change in fair value of debt and liability instruments 4,782 7,189 (2,407 ) Interest expense, net 1,963 1,068 895 Loss on foreign currency exchange 45 118 (73 ) Total other (income) expense, net (10,588 ) 8,887 (19,475 ) Loss before income taxes (72,808 ) (114,318 ) 41,510 Income tax (benefit) expense (1 ) 13 (14 ) Net loss $ (72,807 ) $ (114,331 ) $ 41,524 Comparison of the Years Ended December 31, 2024 and 2023 126 Net Revenue The following table summarizes net revenue by product for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Increase (Decrease) ZTlido Net Revenue $ 52,094 $ 46,300 $ 5,794 ELYXYB Net Revenue 4,258 443 3,815 GLOPERBA Net Revenue 238 — 238 Total Net Revenue $ 56,590 $ 46,743 $ 9,847 Net revenue for the years ended December 31, 2024 and 2023 was $56.6 million and $46.7 million, respectively.
Biggest changeResults of Operations The following tables summarize our results of operations for the years ended December 31, 2025, and 2024 (in thousands) : Year Ended December 31, 2025 2024 Changes Statements of Operations Data: Net revenue $ 30,253 $ 56,590 $ (26,337 ) Net operating costs and expenses: Cost of revenue 10,599 16,689 (6,090 ) Research and development 20,710 9,641 11,069 Selling, general and administrative 266,884 119,016 147,868 Goodwill impairment 73,358 — — Intangible amortization 4,364 4,031 333 Legal settlements 345 (9,391 ) 9,736 Total net operating costs and expenses 376,260 139,986 162,916 Loss from operations (346,007 ) (83,396 ) (189,253 ) Other (income) expense, net: (Gain) loss on derivative liability 22,693 (17,378 ) 40,071 Change in fair value of debt and liability instruments 25,351 4,782 20,569 Loss on debt extinguishment, net 7,351 — 7,351 Interest expense, net 11,459 1,963 9,496 Loss on foreign currency exchange (86 ) 45 (131 ) Unrealized loss on digital assets, net 12,180 — 12,180 Realized loss on digital assets, net 30,200 — 30,200 Unrealized (gain) on equity investment, net (2,692 ) — (2,692 ) Realized (gain) on equity investments, net (19,218 ) — (19,218 ) Unrealized (gain) on equity method investments carried at fair value, net (54,760 ) — (54,760 ) Realized (gain) on equity method investments carried at fair value, net (4,657 ) — (4,657 ) Realized (gain) on securities 199 — — Total other (income) expense, net 28,020 (10,588 ) 77,356 Loss before income taxes (374,027 ) (72,808 ) (266,609 ) Income tax expense (benefit) 26 (1 ) 27 Net loss $ (374,053 ) $ (72,807 ) $ (266,636 ) Comparison of the Years Ended December 31, 2025, and 2024: 135 Net Revenue The following table summarizes net revenue by product for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Increase (Decrease) ZTlido Net Revenue $ 25,626 $ 52,094 $ (26,468 ) ELYXYB Net Revenue 3,798 4,258 (460 ) GLOPERBA Net Revenue 151 238 (87 ) Vivasor Contract Revenue Net Revenue 678 — 678 Total Net Revenue $ 30,253 $ 56,590 $ (27,015 ) Net revenue for the years ended December 31, 2025 and 2024 was $30.3 million and $56.6 million, respectively.
The loss recognized during the year ended December 31, 2023 was attributed to losses of $4.4 million for the Convertible Debentures and $2.8 million for the Oramed Note. The Convertible Debentures were issued in March and April 2023 in an aggregate principal amount of $25.0 million, which were fully repaid during the first quarter of 2024.
The loss recognized during the year ended December 31, 2024, was attributed to losses of $4.4 million for the Convertible Debentures and $2.8 million for the Oramed Note. The Convertible Debentures were issued in March and April 2023 in an aggregate principal amount of $25.0 million, which were fully repaid during the first quarter of 2024.
The Commitment Amount shall be payable as follows: (i) $85 million no later than the date that is 70 days following the date on which we receive the FSF Deposit (the “Outside Date” and the funding of the initial $85 million, the “Initial Closing”) and (ii) the remaining $15 million within 60 days following the Initial Closing.
The Commitment Amount shall be payable as follows: (i) $85 million no later than the date that is 70 days following the date on which we receive the FSF Deposit (the “Outside Date” and the funding of the initial $85 million, the “Initial Commitment Closing”) and (ii) the remaining $15 million within 60 days following the Initial Commitment Closing.
Pursuant to the Commitment Letter, the FSF Lender provided us the non-refundable FSF Deposit in immediately available funds in the aggregate principal amount of $10 million on June 18, 2024 (the “Deposit Date”), which amount will be creditable towards the $85 million required to be funded by FSF Lender at the Initial Closing.
Pursuant to the Commitment Letter, the FSF Lender provided us the non-refundable FSF Deposit in immediately available funds in the aggregate principal amount of $10 million on June 18, 2024 (the “Deposit Date”), which amount will be creditable towards the $85 million required to be funded by FSF Lender at the Initial Commitment Closing.
Cash Flows from Financing Activities For the year ended December 31, 2024 , net cash used for financing activities was approximately $18.1 million and is primarily related to the repayment of an aggregate of $184.6 million of borrowings under the Revolving Facility, the Oramed Note, the Convertible Debentures and the Tranche B Notes, the payment of an aggregate of $4.4 million of transaction costs related to the February 2024 BDO, the April 2024 RDO and the December 2024 RDO, the payment of an aggregate of $4.2 million of transaction cost related to the Tranche B Notes and the ZTlido Royalty Purchase Agreement, a $1.4 million payment of deferred transaction costs related to the Semnur Business Combination, a $0.5 million payment of excise tax on stock repurchases, and a payment of $0.3 million cash in consideration of the repurchase of a certain portion of the SPAC Warrants, partially offset by $95.5 million in gross proceeds from the Revolving Facility, an aggregate of $42.0 million in gross proceeds from the issuance of shares under the February 2024 BDO, April 2024 RDO, December 2024 RDO and the exercise of the February 2024 BDO Firm Warrants, an aggregate of $25.0 million in gross proceeds from issuance of Tranche B Notes and ZTlido Royalty Purchase Agreement, $10.0 million in proceeds from receiving the FSF Deposit, an aggregate of $2.7 million in proceeds from the Standby Equity Purchase Agreements and the ATM Sales Agreement and an aggregate of $2.1 million in proceeds from the exercise of stock options and warrants and purchases under the ESPP.
For the year ended December 31, 2024 , net cash used for financing activities was approximately $18.1 million and is primarily related to the repayment of an aggregate of $184.6 million of borrowings under the Revolving Facility, the Oramed Note, the Convertible Debentures and the Tranche B Notes, the payment of an aggregate of $4.4 million of transaction costs related to the February 2024 BDO, the April 2024 RDO and the December 2024 RDO, the payment of an aggregate of $4.2 million of transaction cost related to the Tranche B Notes and the ZTlido Royalty Purchase Agreement, a $1.4 million payment of deferred transaction costs related to the Semnur Business Combination, a $0.5 million payment of excise tax on stock repurchases, and a payment of $0.3 million cash in consideration of the repurchase of a certain portion of the SPAC Warrants, partially offset by $95.5 million in gross proceeds from the Revolving Facility, an aggregate of $42.2 million in gross proceeds from the issuance of shares under the February 2024 BDO, April 2024 RDO, December 2024 RDO and the exercise of the February 2024 BDO Firm Warrants, an aggregate of $25.5 million in gross proceeds from issuance of Tranche B Notes and ZTlido Royalty Purchase Agreement, $10.7 million in proceeds from receiving the FSF Deposit, an aggregate of $2.7 million in proceeds from the Standby Equity Purchase Agreements and the ATM Sales Agreement and an aggregate of $2.1 million in proceeds from the exercise of stock options and warrants and purchases under the ESPP.
These provisions include, but are not limited to: • an exemption from compliance with the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”); 139 • an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation; • reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and • exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements.
These provisions include, but are not limited to: • an exemption from compliance with the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”); • an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation; • reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and • exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements.
We in-licensed the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution (“GLOPERBA”), an FDA-approved prophylactic treatment for painful gout flares in adults, in the United States of America (“U.S.” or the “United States”). We launched GLOPERBA in June 2024 and believe we are well-positioned to market and distribute the product.
We also in-licensed the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution (“GLOPERBA”), an FDA-approved prophylactic treatment for painful gout flares in adults, in the United States of America (“U.S.” or the “United States”). We launched GLOPERBA in June 2024 and believe we are well-positioned to market and distribute the product.
Cardinal Health 105 purchased and shipped ZTlido to customer wholesale distribution centers. Cardinal Health 105 also performed order management services on our 120 behalf. On April 2, 2022, we announced the expansion of our direct distribution network to national and regional wholesalers and pharmacies. Cardinal Health 105 will continue to provide traditional third-party logistics functions for us.
Cardinal Health 105 purchased and shipped ZTlido to customer wholesale distribution centers. Cardinal Health 105 also performed order management services on our behalf. On April 2, 2022, we announced the expansion of our direct distribution network to national and regional wholesalers and pharmacies. Cardinal Health 105 will continue to provide traditional third-party logistics functions for us.
On the Deposit Date, we issued to FSF Lender a warrant to purchase up to an aggregate of 3,250,000 shares of Common Stock (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction) (the “Deposit Warrant”), with an exercise price of $1.20 per share.
On the Deposit Date, we issued to FSF Lender a warrant to purchase up to an aggregate of 3,250,000 shares of Common Stock (subject to 142 adjustment for any stock dividend, stock split, reverse stock split or similar transaction) (the “Deposit Warrant”), with an exercise price of $1.20 per share.
ZTlido, ELYXYB and GLOPERBA Royalties In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with Itochu and Oishi (together, the “Developers”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and SP-103, for Scilex Pharma.
ZTlido, ELYXYB and GLOPERBA Royalties 140 In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with Itochu and Oishi (together, the “Developers”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and SP-103, for Scilex Pharma.
Increase of lidocaine load in topical system by three times, compared with approved ZTlido, 5.4% vs. 1.8%, did not result in signs of systemic toxicity or increased application site reactions with daily applications over one month treatment.
The increase of lidocaine load in topical system by three times, compared with approved ZTlido, 5.4% vs. 1.8%, did not result in signs of systemic toxicity or increased application site reactions with daily applications over one month treatment.
February 2024 Bought Deal Offering 131 On February 29, 2024, we entered into an underwriting agreement (the “February 2024 BDO Underwriting Agreement”) with Rodman & Renshaw LLC and StockBlock, as the representatives (the “Representatives”) of the underwriters named in Schedule A (the “Underwriters”).
February 2024 Bought Deal Offering On February 29, 2024, we entered into an underwriting agreement (the “February 2024 BDO Underwriting Agreement”) with Rodman & Renshaw LLC and StockBlock, as the representatives (the “Representatives”) of the underwriters named in Schedule A (the “Underwriters”).
The Convertible Debentures, the Oramed Note, the Tranche B Notes and the purchased revenue liability are discussed in Note 7 titled “ Debt” of the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. These instruments are measured at fair value on a recurring basis using Level 3 inputs.
The Convertible Debentures, the Oramed Note, the Tranche B Notes and the purchased revenue liability are discussed in Note 8 titled “ Debt” of the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. These instruments are measured at fair value on a recurring basis using Level 3 inputs.
Since our inception, we have invested substantial efforts and financial resources on acquiring product and technology rights while building our intellectual property portfolio and infrastructure. In June 2022, we in-licensed the exclusive right to commercialize GLOPERBA oral solution, an FDA-approved prophylactic treatment for painful gout flares in adults, in the U.S.
Since our inception, we have invested substantial efforts and financial resources into acquiring product and technology rights while building our intellectual property portfolio and infrastructure. In June 2022, we in-licensed the exclusive right to commercialize GLOPERBA oral solution, an FDA-approved prophylactic treatment for painful gout flares in adults, in the U.S.
Contingent consideration obligations are comprised of regulatory milestones and additional payments that will be due upon the achievement of certain amounts of net sales (see Note 3 titled “ Acquisitions and License Agreements ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
Contingent consideration obligations are comprised of regulatory milestones and additional payments that will be due upon the achievement of certain amounts of net sales (see Note 3 titled “ Acquisitions ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
In addition, in conjunction with and pursuant to the letter agreement we entered into with Oramed, dated as of October 2, 2025 (the “Tranche B Letter Agreement”), we are also responsible for the payment of legal fees of outside counsel for Oramed relating to or arising out of the transactions contemplated hereby and the payment date extensions described under the Tranche B Letter Agreement.
In addition, in conjunction with and pursuant to the letter agreement we entered into with Oramed, dated as of October 2, 2024 (the “Tranche B Letter Agreement”), we are also responsible for the payment of legal fees of outside counsel for Oramed relating to or arising out of the transactions contemplated hereby and the payment date extensions described under the Tranche B Letter Agreement.
Scilex qualifies and will remain a smaller reporting company until the last day of the fiscal year in which (i) Scilex has annual revenue of at least $100 million and a public float that equals or exceeds $700 million as of the last business day of its most recently completed second fiscal quarter or (ii) Scilex has a public float that equals or exceeds $250 million as of the last business day of its most recently completed second fiscal quarter. 140
Scilex qualifies and will remain a smaller reporting company until the last day of the fiscal year in which (i) Scilex has annual revenue of at least $100 million and a public float that equals or exceeds $700 million as of the last business day of its most recently completed second fiscal quarter or (ii) Scilex has a public float that equals or exceeds $250 million as of the last business day of its most recently completed second fiscal quarter. 153
If we incur additional indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on 135 our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
If we incur additional indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating 146 restrictions that could adversely impact our ability to conduct our business.
Derivative Liability Derivative liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expire, with changes in the fair value between reporting periods recorded as other income or expense.
Derivative Liability Derivative liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expired, with changes in the fair value between reporting periods recorded as other income or expense.
The offering price per share and accompanying April 2024 RDO Common Warrant to purchase one share of Common Stock was $1.00, for aggregate gross proceeds to us of $15,000,000, before deducting the placement agent fees and other offering expenses.
The offering price per share and accompanying April 2024 RDO Common Warrant to purchase one share of Common Stock was $35.00, for aggregate gross proceeds to us of $15,000,000, before deducting the placement agent fees and other offering expenses.
The exercise price of the February 2024 BDO Common Warrants is subject to certain adjustments, including (but not limited to) for stock dividends, stock splits, combinations and reclassifications of the Common Stock.
The exercise price of the February 2024 141 BDO Common Warrants is subject to certain adjustments, including (but not limited to) stock dividends, stock splits, combinations and reclassifications of the Common Stock.
The warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value meas urement.
The warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value measurement.
The February 2024 BDO Representative Warrants are immediately exercisable and have the same terms as the February 2024 BDO Common Warrants described above, except that the exercise price of the February 2024 BDO Representative Warrants is $2.125 per share, which represents 125% of the combined public offering price per Firm Share and accompanying February 2024 BDO Firm Warrant.
The February 2024 BDO Representative Warrants are immediately exercisable and have the same terms as the February 2024 BDO Common Warrants described above, except that the exercise price of the February 2024 BDO Representative Warrants is $74.38 per share, which represents 125% of the combined public offering price per Firm Share and accompanying February 2024 BDO Firm Warrant.
Our development pipeline consists of three product candidates, (i) SP-102 (“SEMDEXA”) (10 mg, dexamethasone sodium phosphate viscous gel), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain or sciatica with completed Phase 3 study, (ii) SP-103 (lidocaine topical system) 5.4% (“SP-103”), a Phase 2, next-generation, triple-strength formulation of ZTlido, for the treatment of chronic neck pain associated with muscle spasms and for which we have completed a Phase 2 trial in acute low back pain (“LBP”) in the third quarter of 2023, and (iii) SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride formulation for treatment of fibromyalgia, for which Phase 1 trials were completed in the second quarter of 2022.
Our development pipeline consists of three product candidates, (i) SP-102 (“SEMDEXA”) (10 mg, dexamethasone sodium phosphate viscous gel), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain or sciatica, which is in the second Phase 3 study initiated in September 2025, (ii) SP-103 (lidocaine topical system) 5.4% (“SP-103”), a Phase 2, next-generation, triple-strength formulation of ZTlido for the treatment of chronic neck pain associated with muscle spasms and for which we have completed a Phase 2 trial in acute low back pain (“LBP”), and (iii) SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride formulation for the treatment of fibromyalgia, for which Phase 1 trials were completed.
See Note 4 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
April 2024 Registered Direct Offering On April 23, 2024, we entered into a securities purchase agreement (the “April 2024 RDO Purchase Agreement”) with the investor named therein, pursuant to which we sold and issued, in a registered direct offering (the “April 2024 RDO”): (i) an aggregate of 15,000,000 shares (the “April 2024 RDO Shares”) of Common Stock, and (ii) common warrants to purchase up to 15,000,000 shares of Common Stock (the “April 2024 RDO Common Warrants”).
April 2024 Registered Direct Offering On April 23, 2024, we entered into a securities purchase agreement (the “April 2024 RDO Purchase Agreement”) with the investor named therein, pursuant to which we sold and issued, in a registered direct offering (the “April 2024 RDO”): (i) an aggregate of 428,572 shares (the “April 2024 RDO Shares”) of Common Stock, and (ii) common warrants to purchase up to 428,572 shares of Common Stock (the “April 2024 RDO Common Warrants”).
The April 2024 RDO Placement Agent Warrants have an exercise price of $1.25 per share (which represents 125% of the combined offering price per share of Common Stock and the April 2024 RDO Common Warrant sold in the April 2024 RDO), will become exercisable on the six-month anniversary of the date of issuance and expire five years from the commencement of sales in the April 2024 RDO.
The April 2024 RDO Placement Agent Warrants have an exercise price of $43.75 per share (which represents 125% of the combined offering price per share of Common Stock and the April 2024 RDO Common Warrant sold in the April 2024 RDO), will become exercisable on the six-month anniversary of the date of issuance and expire five years from the commencement of sales in the April 2024 RDO.
Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25% and 35% to the Developers based on net profits. During each of the years ended December 31, 2024 and 2023, Scilex Pharma made royalty payments in the amount of $8.3 million.
Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25% and 35% to the Developers based on net profits. During each of the years ended December 31, 2025, and 2024, Scilex Pharma made royalty payments in the amount of $6.3 million and $8.3 million, respectively.
In connection with the February 2024 BDO, pursuant to the February 2024 BDO Underwriting Agreement, we issued to the Representatives warrants (the “February 2024 BDO Representative Warrants”, and together with the February 2024 BDO Common Warrants, the “February 2024 BDO Warrants”) to purchase up to an aggregate of 470,588 shares of Common Stock (which represents 8.0% of the aggregate number of February 2024 BDO Firm Shares sold in the February 2024 BDO).
In connection with the February 2024 BDO, pursuant to the February 2024 BDO Underwriting Agreement, we issued to the Representatives warrants (the “February 2024 BDO Representative Warrants”, and together with the February 2024 BDO Common Warrants, the “February 2024 BDO Warrants”) to purchase up to an aggregate of 13,446 shares of Common Stock (which represents 8.0% of the aggregate number of February 2024 BDO Firm Shares sold in the February 2024 BDO).
As consideration for the license under the Romeg License Agreement, we are obligated to make royalty payments on net sales of GLOPERBA that range from low-single digit to mid-single digit percentages based on annual net sales. During the years ended December 31, 2024 and 2023, we made royalty payments in the amount of $0.6 million and $0.3 million, respectively.
As consideration for the license under the Romeg License Agreement, we are obligated to make royalty payments on net sales of GLOPERBA that range from low-single digit to mid-single digit percentages based on annual net sales. During each of the years ended December 31, 2025, and 2024, we made royalty payments in the amount of $0.6 million.
The gain recognized during the year ended December 31, 2024 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants (each as defined below).
The gain recognized during the year ended December 31, 2024 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants.
Subject to certain ownership limitations, the April 2024 RDO Common Warrants are exercisable on the six-month anniversary from the date of issuance, will expire on the five-year anniversary of the date of issuance and have an exercise price of $1.10 per share.
Subject to certain ownership limitations, the April 2024 RDO Common Warrants are exercisable on the six-month anniversary from the date of issuance, will expire on the five-year anniversary of the date of issuance and have an exercise price of $38.50 per share.
Loss on Foreign Currency Exchange Loss on foreign currency exchange relates to foreign exchange losses on payments made to our foreign supplier, Itochu, a manufacturer and supplier of lidocaine tape products, including ZTlido and SP-103.
(Gain) Loss on Foreign Currency Exchange (Gain) Loss on foreign currency exchange relates to foreign exchange (gain) losses on payments made to our foreign supplier, “Itochu”, a manufacturer and supplier of lidocaine tape products, including ZTlido and SP-103.
Subject to certain ownership limitations, the February 2024 BDO Common Warrants are exercisable immediately, will expire on the five-year anniversary of the date of issuance and have an exercise price of $1.70 per share.
Subject to certain ownership limitations, the February 2024 BDO Common Warrants are exercisable immediately, will expire on the five-year anniversary of the date of issuance and have an exercise price of $59.50 per share.
We market ZTlido through a dedicated sales force of over 70 people, targeting 10,000 primary care physicians, pain specialists, neurologists and palliative care physicians who we believe treat the majority of PHN patients.
We market ZTlido through a third-party dedicated sales force of over 30 people, targeting 10,000 primary care physicians, pain specialists, neurologists and palliative care physicians who we believe treat the majority of PHN patients.
Deferred Consideration As of December 31, 2024, we have $2.9 million of deferred consideration related to minimum royalty payments that were included in the initial measurement of consideration transferred for the GLOPERBA license. Deferred consideration minimum royalty payments began in July 2023.
Deferred Consideration As of December 31, 2025, we have $2.4 million of deferred consideration related to minimum royalty payments that were included in the initial measurement of consideration transferred for the GLOPERBA license. Deferred consideration minimum royalty payments began in July 2023.
On January 2, 2025, we entered into a deferral and consent letter with each of (i) Nomis Bay Ltd and BPY Limited (the “Nomis Bay Consent”), (ii) Oramed (the “Oramed Consent”) and (iii) 3i, LP (the “3i Consent” and, together with the Nomis Bay Consent and the Oramed Consent, the “Tranche B Consents”), respectively, pursuant to which the Tranche B Noteholders agreed to defer our obligation to make the First Amortization Payment until January 31, 2025.
On January 2, 2025, we entered into a deferral and consent letter with each of (i) Nomis Bay Ltd and BPY Limited (the “Nomis Bay Consent”), (ii) Oramed (the “Oramed Consent”) and (iii) 3i, LP (the “3i Consent” and, collectively with the Nomis Bay Consent and the Oramed Consent, the “Tranche B Consents”), respectively, pursuant to which the Tranche B Noteholders agreed to defer our obligation to make the First Amortization Payment until January 31, 2025 and then further to October 8, 2026.
The combined offering price (a) per share of Common Stock and accompanying December 2024 RDO Common Warrants was $0.59 and (b) per Pre-Funded Warrant and accompanying December 2024 RDO Common Warrants was $0.5899. We received approximately $17.0 million in gross proceeds from the December 2024 RDO, before deducting offering fees and expenses.
The combined offering price (a) per share of Common Stock and accompanying December 2024 RDO Common Warrants was $20.65 and (b) per Pre-Funded Warrant and accompanying December 2024 RDO Common Warrants was $20.6499. We received approximately $17.0 million in gross proceeds from the December 2024 RDO, before deducting offering fees and expenses.
Our ability to generate revenue sufficient to achieve profitability will depend on the successful commercialization of our products, ZTlido, GLOPERBA and ELYXYB, and the development of our product candidates. We had a net loss of $72.8 million and $114.3 million for the years ended December 31, 2024 and 2023, respectively.
Our ability to generate sufficient revenue to achieve profitability will depend on the successful commercialization of our products, ZTlido, GLOPERBA and ELYXYB, and the development of our product candidates. We had a net loss of $374.1 million and $72.8 million for the years ended December 31, 2025, and 2024, respectively.
As of December 31, 2024 and 2023, Scilex Pharma had ending balances of accrued royalty payables of $4.0 million and $2.4 million, respectively.
As of December 31, 2025, and 2024, Scilex Pharma had ending balances of accrued royalty payables of $2.1 million and $4.0 million, respectively.
The October 2024 Noteholder Warrants are immediately exercisable for cash at an exercise price equal to $1.09 per share of Common Stock (which was automatically reduced to $1.04 per share of Common Stock subsequent to the December 2024 RDO (as defined below) in accordance with the terms of such warrants) and will expire five years from the issuance date.
The October 2024 Noteholder Warrants are immediately exercisable for cash at an exercise price equal to $38.15 per share of Common Stock (which was automatically reduced to $36.44 per share of Common Stock subsequent to the December 2024 RDO (as defined below) in accordance with the terms of such warrants) and will expire five years from the issuance date.
To the extent any of the February 2024 BDO Firm Warrants, February 2024 BDO Representative Warrants, April 2024 RDO Common Warrants, April 2024 RDO Placement Agent Warrants, Deposit Warrant, October 2024 Noteholder Warrants, October 2024 Placement Agent Warrants, December 2024 RDO Common Warrants and StockBlock Warrants is exercised, we will receive additional proceeds.
To the extent any of the February 2024 BDO Firm Warrants, February 2024 BDO Representative Warrants, April 2024 RDO Placement Agent Warrants, Deposit Warrant, October 2024 Noteholder Warrants, October 2024 Placement Agent Warrants, December 2024 RDO Common Warrants, StockBlock Warrants, the Exchange Warrants, the September 2025 Warrants, the November 2025 Warrants and the February 2026 Warrants is exercised, we will receive additional proceeds.
We also issued to the Placement Agents or their respective designees common warrants, substantially in the form of the April 2024 RDO Common Warrants, to purchase up to 1,200,000 shares of Common Stock (the “April 132 2024 RDO Placement Agent Warrants” and together with the “April 2024 RDO Common Warrants”, the “April 2024 RDO Warrants”), representing up to 8.0% of the total number of the April 2024 RDO Shares issued in the April 2024 RDO.
We also issued to the Placement Agents or their respective designees common warrants, substantially in the form of the April 2024 RDO Common Warrants, to purchase up to 34,286 shares of Common Stock (the “April 2024 RDO Placement Agent Warrants” and together with the “April 2024 RDO Common Warrants”, the “April 2024 RDO Warrants”), representing up to 8.0% of the total number of the April 2024 RDO Shares issued in the April 2024 RDO.
See Note 2 titled “Liquidity and Going Concern” to our consolidated financial statements and our independent registered public accounting firm report included elsewhere in this Annual Report on Form 10-K for additional information.
See Note 2 titled “ Liquidity and Going Concern ” to our consolidated financial statements and our independent registered public accounting firm report included elsewhere in this Annual Report on Form 10-K for additional information.
Pursuant to the February 2024 BDO Underwriting Agreement, we sold, in an underwritten offering (the “February 2024 BDO”), 5,882,353 shares (the “February 2024 BDO Firm Shares”) of the Common Stock, and accompanying common warrants to purchase up to an aggregate of 5,882,353 shares of Common Stock (the “February 2024 BDO Firm Warrants”).
Pursuant to the February 2024 BDO Underwriting Agreement, we sold, in an underwritten offering (the “February 2024 BDO”), 168,068 shares (the “February 2024 BDO Firm Shares”) of the Common Stock, and accompanying common warrants to purchase up to an aggregate of 168,068 shares of Common Stock (the “February 2024 BDO Firm Warrants”).
We are obligated to make quarterly royalty payments on net sales of ELYXYB in the ELYXYB Territory that range from high single digits to the low double digits on net sales based on the volume of sales.
We are obligated to make quarterly royalty payments on net sales of ELYXYB in the ELYXYB Territory that range from high single digits to the low double digits on net sales based on the volume of sales. In April 2023, we launched ELYXYB in the U.S.
Purchased Revenue Liability As of December 31, 2024, the fair value of the purchased revenue liability was $6.8 million pursuant to the ZTlido Royalty Purchase Agreement (see Note 7 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
Purchased Revenue Liability As of December 31, 2025, the fair value of the purchased revenue liability was $8.4 million pursuant to the ZTlido Royalty Purchase Agreement and Gloperba-Elyxyb Royalty Purchase Agreement (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
Tranche B Notes As of December 31, 2024, the fair value of the Tranche B Notes outstanding was $23.6 million pursuant to the Tranche B Securities Purchase Agreement (see Note 7 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
Tranche B Notes As of December 31, 2025, the fair value of the Tranche B Notes outstanding was $17.5 million pursuant to the Tranche B Securities Purchase Agreement (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
Change in Fair Value of Debt and Liability Instruments Change in fair value of debt and liability instruments for the years ended December 31, 2024 and 2023 was $4.8 million and $7.2 million, respectively.
Change in Fair Value of Debt and Liability Instruments Change in fair value of debt and liability instruments for the years ended December 31, 2025 and 2024 was $25.4 million and $4.8 million, respectively.
The October 2024 Noteholder Warrants issued to the Tranche B Investors are initially exercisable for 3,750,000 shares of Common Stock in the aggregate. The October 2024 Noteholder Warrants issued to Oramed are initially exercisable for 3,750,000 shares of Common Stock.
The October 2024 Noteholder Warrants issued to the Tranche B Investors are initially exercisable for 107,142 shares of Common Stock in the aggregate. The October 2024 Noteholder Warrants issued to Oramed are initially exercisable for 107,142 shares of Common Stock.
Research and Development Research and development expenses are expensed when incurred and consist primarily of costs incurred for our research activities, including the development of our product candidates, and include: • costs related to clinical trials; • salaries, benefits and other related costs, including stock-based compensation expense for personnel engaged in research and development functions; and • costs related to outside consultants.
We expect the cost of revenue to fluctuate with related net sales revenue. 132 Research and Development Research and development expenses are expensed when incurred and consist primarily of costs incurred for our research activities, including the development of our product candidates, and include: • costs related to clinical trials; • salaries, benefits and other related costs, including stock-based compensation expense for personnel engaged in research and development functions; and • costs related to outside consultants.
However, our ability to generate proceeds will depend on the market price of our Common Stock. If the price of our Common Stock remains below $11.50 per share, we believe warrant holders will be unlikely to cash exercise their SPAC Warrants, resulting in little or no cash proceeds to us.
If the price of our Common Stock remains below $402.50 per share, we believe warrant holders will be unlikely to cash exercise their SPAC Warrants, resulting in little or no cash proceeds to us.
Critical Accounting Estimates This management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which are prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Critical Accounting Estimates This management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which are prepared in accordance with “U.S. GAAP”.
Interest Expense, Net Interest expense, net consists of interest related to the loans in an aggregate principal amount of up to $30.0 million (the “Revolving Facility”) made available by eCapital Healthcare Corp. pursuant to a Credit and Security Agreement (the “eCapital Credit Agreement”) that Scilex Pharma entered into on June 27, 2023.
Interest expense, net for the twelve months ended December 31, 2024 consists of interest related to the loans in an aggregate principal amount of up to $30.0 million (the “Revolving Facility”) made available by eCapital Healthcare Corp. pursuant to a Credit and Security Agreement (the “eCapital Credit Agreement”) that “Scilex Pharma”, entered into on June 27, 2023.
Pursuant to the Warrant Amendment, the investor agreed to exercise outstanding warrants to purchase an aggregate of 1,764,706 shares of Common Stock in cash at an amended exercise price of $0.59 per share.
Pursuant to the Warrant Amendment, the investor agreed to exercise outstanding warrants to purchase an aggregate of 1,764,706 shares of Common Stock in cash at an amended exercise price of $0.59 per share. The gross proceeds to us from such exercise was approximately $1.0 million.
SP-103 has also been granted fast track designation by the FDA for LBP. We received our SP-103 Phase 2 top-line results in August 2023 and the trial achieved its objectives characterizing safety, tolerability and preliminary efficacy of SP-103 in acute LBP associated with muscle spasms. SP-103 was safe and well tolerated.
We received our SP-103 Phase 2 top-line results in August 2023, and the trial achieved its objectives characterizing safety, tolerability and preliminary efficacy of SP-103 in acute LBP associated with muscle spasms. SP-103 was safe and well tolerated.
December 2024 Registered Direct Offering On December 11, 2024, we entered into a securities purchase agreement (the “December 2024 RDO Purchase Agreement”) with the investors named therein, pursuant to which we agreed to sell and issue, in a registered direct offering (the “December 2024 RDO”): (i) an aggregate of 26,355,347 shares of Common Stock, (ii) pre-funded warrants to purchase up to 2,401,132 shares of Common Stock (the “December 2024 RDO Pre-Funded Warrants”) and (iii) common warrants to purchase up to 57,512,958 shares of Common Stock (the “December 2024 RDO Common Warrants” and together with the December 2024 RDO Pre-Funded Warrants and the warrants issued to StockBlock pursuant to certain contractual obligations between us and StockBlock (the “StockBlock Warrants”), the “December 2024 RDO Warrants”).
December 2024 Registered Direct Offering On December 11, 2024, we entered into a securities purchase agreement (the “December 2024 RDO Purchase Agreement”) with the investors named therein, pursuant to which we agreed to sell and issue, in a registered direct offering (the “December 2024 RDO”): (i) an aggregate of 753,009 shares of Common Stock, (ii) pre-funded warrants to purchase up to 68,604 shares of Common Stock (the “December 2024 RDO Pre-Funded Warrants”) and (iii) common warrants to purchase up to 1,642,871 shares of Common Stock (the “December 2024 RDO Common Warrants” and together with the December 2024 RDO Pre-Funded Warrants and the warrants issued to StockBlock pursuant to certain contractual obligations between us and StockBlock (the “StockBlock Warrants”), the “December 2024 RDO Warrants”).
The Oramed Note was issued in September 2023 in the principal amount of $101.9 million, of which the principal amount of $25.0 million remained outstanding as of December 31, 2024.
The Oramed Note was issued in September 2023 in the principal amount of $101.9 million, of which the principal amount of $28.2 million remained outstanding as of December 31, 2025.
We will continue to analyze the SP-103 Phase 2 trial data along with an investigator study of ZTlido in patients with neck pain completed in the second half of 2023, which also has shown promising top-line efficacy and safety results. SP-103, if approved, could become the first FDA-approved lidocaine topical product for the treatment of acute pain.
We will continue to analyze the SP-103 Phase 2 trial data along with an investigator study of ZTlido in patients with neck pain completed in the second half of 2023, which also has shown promising top-line efficacy and safety results.
Our performance obligations with respect to sales of ZTlido, ELYXYB and GLOPERBA are satisfied at a certain point in time, and we consider control to have transferred upon delivery to the customer, because, upon delivery, the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards in connection with 137 ownership of the asset, and we have a present right to payment from the customer at that time.
We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. 149 Our performance obligations with respect to sales of ZTlido, ELYXYB and GLOPERBA are satisfied at a certain point in time, and we consider control to have transferred upon delivery to the customer, because, upon delivery, the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards in connection with ownership of the asset, and we have a present right to payment from the customer at that time.
Recent Developments Deferral and Consent under Tranche B Senior Secured Convertible Note Pursuant to the Tranche B Notes, commencing on January 2, 2025 (the “First Amortization Payment Date”), we are required to redeem in cash (the “First Amortization Payment”) such portion of the principal amount of the Tranche B Notes equal to each Tranche B Noteholder’s Holder Pro Rata Amount (as defined in the Tranche B Notes) of $6,250,000 per fiscal quarter at a redemption price equal to 100% of such Amortization Amount (as defined in the Tranche B Notes).
Pursuant to the Tranche B Notes, commencing on January 2, 2025, we were required to redeem in cash (the “First Amortization Payment”) such portion of the principal amount of the Tranche B Notes equal to each Tranche B Noteholder’s Holder Pro Rata Amount (as defined in the Tranche B Notes) of $6,250,000 per fiscal quarter at a redemption price equal to 100% of such Amortization Amount (as defined in the Tranche B Notes).
See Note 11 titled “ Commitments and Contingencies ” of the Notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. Other (Income) Expense (Gain) loss on Derivative Liability (Gain) loss on derivative liability includes the remeasurement of the derivative warrant liability.
Other (Income) Expense (Gain) loss on Derivative Liability (Gain) loss on derivative liability includes the remeasurement of the derivative warrant liability. See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
In addition to the liquidity provided by revenue generating products and the issuance of the Common Stock under the ATM Sales Agreement, the February 2024 BDO Underwriting Agreement, the April 2024 RDO Purchase Agreement, the Tranche B Securities Purchase Agreement and the December 2024 RDO Purchase Agreement, as of December 31, 2024, we will receive up to an aggregate of approximately $74.4 million from the exercise of the Private Warrants and public warrants to purchase Common Stock (the “Public Warrants”, and together with the Private Warrants, the “ SPAC Warrants”) (at an exercise price of $11.50 per share of Common Stock), assuming the exercise in full of all of the SPAC Warrants for cash, but will not receive any proceeds from the sale of the shares of our Common Stock issuable upon such exercise.
In addition to the liquidity provided by revenue generating products, as of December 31, 2025, we would receive up to an aggregate of approximately $80.0 million from the exercise of the Private Warrants and public warrants to purchase Common Stock (the “Public Warrants”, and together with the Private Warrants, the “ SPAC Warrants”) (at an exercise price of $402.50 per share of Common Stock), assuming the exercise in full of all of the SPAC Warrants for cash, but will not receive any proceeds from the sale of the shares of our Common Stock issuable upon such exercise.
The decrease of $0.1 million is related to the full amortization of the assembled workforce intangible asset (see Note 6 titled “ Goodwill and Intangible Assets ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
The increase of $0.4 million is related to the amortization of the Datavault acquired license (see Note 7 titled “ Goodwill and Intangible Assets ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).
During the year ended December 31, 2024, we sold 2,764,187 shares of Common Stock pursuant to the ATM Sales Agreement for net proceeds of approximately $2.7 million. There were no sales made under the ATM Sales Agreement subsequent to December 31, 2024.
During the year ended December 31, 2024, we sold 78,976 shares of Common Stock pursuant to the ATM Sales Agreement for net proceeds of approximately $2.7 million.
We do not have significant costs associated with obtaining contracts with our customers. We recognize revenue when control of the products is transferred to the customers in an amount that reflects the consideration we expect to receive from the customers in exchange for those products.
We recognize revenue when control of the products is transferred to the customers in an amount that reflects the consideration we expect to receive from the customers in exchange for those products.
We received from Oramed in consideration for the Tranche B Notes issued to Oramed an exchange and reduction of the principal balance under the Oramed Note of $22,500,000.
We received in exchange for the issuance of the Tranche B Notes to the Tranche B Investors an aggregate amount in cash of $22,500,000, excluding fees and expenses payable by us. We received from Oramed in consideration for the Tranche B Notes issued to Oramed an exchange and reduction of the principal balance under the Oramed Note of $22,500,000.
The increase of $9.9 million was comprised of $5.8 million, $3.8 million and $0.2 million increase in net product sales of ZTlido, ELYXYB and GLOPERBA, respectively, with GLOPERBA sales commencing in June 2024.
The decrease of $26.3 million comprised of $26.4 million, $0.5 million and $0.1 million decrease in net product sales of ZTlido, ELYXYB and GLOPERBA, respectively, with GLOPERBA sales commencing in June 2024.
Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in our customer contracts, customary industry practices and current government regulations. Rebates and Chargebacks Rebates are discounts that we pay under either government or private health care programs.
Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in our customer contracts, customary industry practices and current government regulations.
In April 2023, we launched ELYXYB in the U.S. 130 During the year ended December 31, 2024 and 2023, we made royalty payments in the amount of $0.3 million and $26.0 thousand, respectively. As of December 31, 2024 and 2023, we had ending balances of accrued royalty payables of $0.1 million and $5.0 thousand, respectively.
During the year ended December 31, 2025, and 2024, we made royalty payments in the amount of $0.2 million and $0.3 million, respectively. As of December 31, 2025, and December 31, 2024, we had ending balances of accrued royalty payables of $0.2 million and $0.1 million.
The combined price per Firm Share and accompanying February 2024 BDO Firm Warrant paid by the Underwriters was $1.564, which amount reflects the combined public offering price of $1.70, less underwriting discounts and commissions.
Each February 2024 BDO Firm Share was sold together with a February 2024 BDO Firm Warrant at a combined public offering price of $59.50. The combined price per Firm Share and accompanying February 2024 BDO Firm Warrant paid by the Underwriters was $54.74, which amount reflects the combined public offering price of $59.50, less underwriting discounts and commissions.
Product returns are presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheets. Co-payment Assistance Patients who have commercial insurance or pay cash and meet certain eligibility requirements may receive co- payment assistance. We accrue for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators.
We accrue for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Co-payment assistance is presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheets.
We expect that any net revenue we generate will fluctuate from year to year as a result of the unpredictability of the demand for our product. 124 Operating Costs and Expenses Cost of Revenue Cost of revenue consists of the cost of purchasing ZTlido, ELYXYB and GLOPERBA from our manufacturing partners, inventory write-downs related to expiration dates for on-hand inventory, cost of shipments, and royalty payments to our manufacturers.
Operating Costs and Expenses Cost of Revenue Cost of revenue consists of the cost of purchasing ZTlido, ELYXYB and GLOPERBA from our manufacturing partners, inventory write-downs related to expiration dates for on-hand inventory, cost of shipments, and royalty payments to our manufacturers.
As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance or the application of existing guidance to changes in Scilex’s business could significantly affect our business, financial condition and results of operations.
As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance or the application of existing guidance to changes in Scilex’s business could significantly affect our business, financial condition and results of operations. 152 In addition, we are in the process of evaluating the benefits of relying on the other exemptions and reduced reporting requirements provided by the JOBS Act.
Pursuant to the Tranche B Securities Purchase Agreement, we agreed to issue and sell, in a registered offering directly to the Tranche B Noteholders: (i) a new tranche B of senior secured convertible notes in the aggregate principal amount of $50.0 million (the “Tranche B Notes”), which notes will mature on the two-year anniversary of the issuance date and will be convertible into shares of our Common Stock at a conversion price equal to $1.09 per share (which was automatically reduced to $1.04 per share of Common Stock subsequent to the December 2024 RDO (as defined below) in accordance with the terms of such notes) and (ii) warrants (the “October 2024 Noteholder Warrants”) to purchase up to 7,500,000 shares of our Common Stock directly to the Tranche B Noteholders. 133 We received in exchange for the issuance of the Tranche B Notes to the Tranche B Investors an aggregate amount in cash of $22,500,000, excluding fees and expenses payable by us.
Pursuant to the Tranche B Securities Purchase Agreement, we agreed to issue and sell, in a registered offering directly to the Tranche B Noteholders: (i) the “Tranche B Notes”), which will mature on the two-year anniversary of the issuance date and will be convertible into shares of our Common Stock at a conversion price equal to $38.15 per share (which was automatically reduced to $36.40 per share of Common Stock subsequent to the December 2024 RDO (as defined below) in accordance with the terms of such notes) and (ii) warrants (the “October 2024 Noteholder Warrants”) to purchase up to 214,284 shares of our Common Stock directly to the Tranche B Noteholders.
Legal Settlements Legal settlements for the years ended December 31, 2024 and 2023 were $9.4 million and nil, respectively. The increase was attributed to litigation settlements that were entered into during the first quarter of 2024. See Note 11 titled “ Commitments and Contingencies ” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Legal Settlements Legal settlements consist of gains on litigation settlements that were entered into during the first quarter of 2024. See Note 13 titled “ Commitments and Contingencies ” of the Notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
In connection with the offering of the Tranche B Notes, we issued to StockBlock Securities LLC (“StockBlock”) and its affiliate, Rodman & Renshaw LLC (the “Placement Agents”) or their respective designees, (i) 2,197,802 shares of Common Stock (the “Placement Agent Shares”) and (ii) Placement Agent Warrants to purchase up to 3,669,724 shares of Common Stock (the “October 2024 Placement Agent Warrants”).
We shall also be responsible for the payment of any fees of the Agent and the legal fees incurred thereby relating to or arising out of the transactions contemplated by the Tranche B Securities Purchase Agreement. 143 In connection with the offering of the Tranche B Notes, we issued to StockBlock Securities LLC (“StockBlock”) and its affiliate, Rodman & Renshaw LLC (the “Placement Agents”) or their respective designees, (i) 2,197,802 shares of Common Stock (the “Placement Agent Shares”) and (ii) Placement Agent Warrants to purchase up to 104,848 shares of Common Stock (the “October 2024 Placement Agent Warrants”).
Interest expense related to these financial instruments is included in the changes in fair value. Recent Accounting Pronouncements See Note 1 titled “ Nature of Operations and Basis of Presentation ” of the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
There were no goodwill impairment charges recorded during fiscal 2024. Recent Accounting Pronouncements See Note 1 titled “ Nature of Operations and Basis of Presentation ” of the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
Food and Drug Administration (“FDA”) for the relief of neuropathic pain associated with post-herpetic neuralgia (“PHN”), which is a form of post-shingles nerve pain. ZTlido possesses novel delivery and adhesion technology designed to address many of the limitations of current prescription lidocaine patches by providing significantly improved adhesion and continuous pain relief throughout the 12-hour administration period.
ZTlido possesses novel delivery and adhesion technology designed to address many of the limitations of current prescription lidocaine patches by providing significantly improved adhesion and continuous pain relief throughout the 12-hour administration period.
SEMDEXA has been granted fast track designation by the FDA and, if approved, could become the first FDA-approved alternative to off-label epidural steroid injections, which are administered over 12 million times annually in the United States. We have completed a pivotal Phase 3 study with final results received in March 2022, which results reflected achievement of primary and secondary endpoints.
SEMDEXA has been granted fast track designation by the FDA and, if approved, could become the first FDA-approved alternative to off-label epidural steroid injections, which are administered over 12 million times annually in the United States.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. As a “ smaller reporting company ” as defined by Item 10 of Regulation S-K, we are not required to provide the information specified under this Item 7A of this Annual Report on Form 10-K.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information specified under this Item 7A of this Annual Report on Form 10-K.

Other SCLXW 10-K year-over-year comparisons