0001193125-24-078991 | POS AM | XBRL Viewer

Income Taxes

12 Months Ended

Dec. 31, 2023

12. Income Taxes

Total loss before income taxes for the years ended December 31, 2023, 2022 and 2021 did not include a foreign component.

The components of the provision expense (benefit) were as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	Year Ended December 31,
	2023			2022			2021
Current income tax expense (benefit):
Federal	$	—		$	—		$	—
State		13			4			5

Total current		13			4			5
Deferred income tax expense (benefit):
Federal		(16,514	)		(10,396	)		(12,981	)
State		(11,247	)		(1,851	)		(2,472	)

Total deferred		(27,761	)		(12,247	)		(15,453	)
Changes in tax rate		(1,471	)		1,347			31
Changes in valuation allowance		29,232			10,900			15,422

Total income tax expense from continuing operations	$	13		$	4		$	5

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2023 and 2022 (in thousands):


	Year Ended December 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	71,434		$	48,984
Debt related interest		16,898			15,272
Capitalized research and development		4,936			2,014
Tax credit carryforwards		3,960			1,630
Stock based compensation		525			1,602
Accrued expense and reserves		1,584			568
Operating lease liabilities		774			315
Other		159			77

Total deferred tax assets		100,270			70,462
Less valuation allowance		(96,776	)		(67,543	)

Total deferred tax assets		3,494			2,919

Deferred tax liabilities:
Intangible assets		(2,734	)		(2,666	)
Operating lease right-of-use assets		(760	)		(253	)

Total deferred tax liabilities		(3,494	)		(2,919	)

Net deferred tax liabilities	$	—		$	—

The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	Year Ended December 31,
	2023			2022			2021
Income tax benefit at federal statutory rate	$	(24,007	)	$	(4,905	)	$	(19,150	)
Valuation allowance		29,232			10,900			15,422
Debt discount and interest limitation		—			(9,293	)		8,954
Compensation expense		3,798			2,469			224
Acquisition related charges		260			992			75
Prior year true-up and carryback		(5,079	)		(713	)		(3,968	)
State, net of federal tax benefit		(5,127	)		(174	)		(2,545	)
Change in fair value of Convertible Debentures		1,752			—			—
Change in tax rates		(1,471	)		—			—
Other		655			728			993

Income tax expense	$	13		$	4		$	5

The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the deferred tax assets will not be realized. Due to such uncertainties surrounding the realization of the deferred tax assets, the Company maintains a valuation allowance of $96.8 million against its deferred tax assets as of December 31, 2023. Realization of the deferred tax assets will be primarily dependent upon the Company’s ability to generate sufficient taxable income prior to the expiration of its net operating losses.

As of December 31, 2023, the Company had $278.7 million and $114.0 million of federal and state net operating loss carryforwards, respectively. The net operating loss carryforwards begin to expire in 2035 and 2034 for federal and state, respectively. As of December 31, 2023, the Company had a total of $265.9 million of federal net operating losses

that have an indefinite life and will not expire, and had federal research and development income tax credits of $3.4 million which will begin to expire in 2035. As of December 31, 2023, the Company had California research and development income tax credits of $1.9 million that have an indefinite life and will not expire.

Internal Revenue Code Section 382 rules apply to limit a corporation’s ability to utilize existing net operating loss and tax credit carryforwards once the corporation experiences an ownership change as defined in Section 382. For the years ended December 31, 2023 and 2022, there was no impact of such limitations on the Company’s income tax provision.

The Company is subject to taxation in U.S. federal and state tax jurisdictions. All of the Company’s tax years will remain open for three years for examination by the federal and state tax authorities from the date of utilizations of net operating loss. There are no active tax compliance audits as of December 31, 2023.

A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	2023		2022		2021
Beginning balance	$	408	$	408	$	406
Increase related to prior year tax positions		536		—		2
Increases related to current year tax positions		127		—		—

Ending balance	$	1,071	$	408	$	408

As of December 31, 2023, 2022 and 2021, the Company had $1.1 million, $0.4 million and $0.4 million in total unrecognized tax benefits, respectively. If these were to be recognized, they would affect the effective tax rate, however given the full valuation allowance in the jurisdiction in which the unrecognized tax benefits relate to, the impact on the effective tax rate would be nil.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. No interest or penalties have been recognized as of and for the periods ended December 31, 2023, 2022 and 2021.

The Company believes that no material amount of the liabilities for uncertain tax positions are expected to reverse within 12 months of December 31, 2023.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Nature of Operations and Basis of Presentation - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 3,921	$ 2,184
Restricted cash	808	0
Total cash, cash equivalents, and restricted cash	$ 4,729	$ 2,184	$ 4,338	$ 4,839

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 3,921	$ 2,184
Accounts receivable, net	34,597	21,236
Inventory	4,214	1,378
Prepaid expenses and other	4,049	4,810
Total current assets:	46,781	29,608
Property and equipment, net	722	772
Operating lease right-of-use asset	2,943	1,131
Intangibles, net	36,485	40,591
Goodwill	13,481	13,481
Other long term assets	897	944
Total assets	101,309	86,527
Current liabilities:
Accounts payable	40,954	8,450
Accrued payroll	2,681	1,354
Accrued rebates and fees	89,658	30,893
Accrued expenses	7,408	3,136
Current portion of deferred consideration	491	264
Debt, current	108,429	0
Current portion of operating lease liabilities	759	745
Total current liabilities:	250,380	44,842
Long-term portion of deferred consideration	2,895	3,387
Debt, net of issuance costs	17,038	0
Derivative liabilities	1,518	1,231
Operating lease liabilities	2,237	665
Other long-term liabilities	179	163
Total liabilities	274,247	50,288
Commitments and contingencies (See Note 11)
Stockholders' (deficit) equity:
Preferred stock, $0.0001 par value, 45,000,000 shares authorized; 29,057,097 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively	0	3
Common stock, $0.0001 par value, 740,000,000 shares authorized; 160,084,250 shares issued and 100,015,665 shares outstanding as of December 31, 2023; 141,348,856 shares issued and outstanding as of December 31, 2022	16	14
Additional paid-in capital	407,813	412,136
Accumulated deficit	(490,245)	(375,914)
Treasury stock, at cost; 60,068,585 shares and nil shares as of September 30, 2023 and December 31, 2022, respectively	(90,522)	0
Total stockholders' (deficit) equity	(172,938)	36,239
Total liabilities and stockholders' (deficit) equity	$ 101,309	$ 86,527

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Operating activities
Net loss	$ (114,331)	$ (23,364)	$ (88,424)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	4,146	3,961	3,779
Amortization of debt issuance costs and debt discount	65	3,142	7,909
Scilex Pharma Notes principal increase	0	0	28,000
Payment on the Scilex Pharma Notes attributed to accreted interest related to the debt discount	0	(21,190)	(12,487)
(Gain) loss on debt extinguishment, net	0	(28,634)	12,463
Non-cash operating lease cost	507	492	372
Stock-based compensation	14,596	5,280	5,822
Issuance of shares under Settlement Agreement	750	0	0
Loss (gain) on derivative liability	512	(8,310)	300
Forfeitures of private warrants	0	1,697	0
Change in fair value of debt and liability instruments	7,189	0	0
Other	57	0	0
Changes in operating assets and liabilities:
Accounts receivables, net	(13,361)	(6,968)	(1,142)
Inventory	(2,838)	1,184	(1,417)
Prepaid expenses and other	(441)	(2,629)	1,479
Other long-term assets	855	350	0
Accounts payable	19,880	2,806	(3,836)
Accrued Payroll	1,327	(2,379)	(21)
Accrued expenses	2,310	(123)	664
Accrued rebates and fees	58,765	23,531	(255)
Other liabilities	(711)	(392)	(80)
Related party payable	0	30,125	18,210
Other long-term liabilities	16	163	0
Net cash used for operating activities	(20,707)	(21,258)	(28,664)
Investing activities
Acquisition consideration paid in cash for Romeg intangible asset acquisition	(300)	(2,060)	0
Purchase of property, plant, and equipment	(30)	(7)	0
Net cash used for investing activities	(330)	(2,067)	0
Financing activities
Proceeds from issuance of shares under Standby Equity Purchase Agreements	35,458	0	0
Proceeds from issuance of Convertible Debentures	24,000	0	0
Repayment of Convertible Debentures	(15,625)	0	0
Proceeds from issuance of Revolving Facility	86,354	0	0
Repayment of Revolving Facility	(69,001)	0	0
Repayment of Oramed Note	(5,000)	0	0
Transaction costs paid related to the Business Combination	(1,372)	(2,949)	0
Payments of debt issuance costs	(380)	0	0
Disbursement of funds to Sorrento	(20,000)	0	0
Cash consideration paid in connection with share repurchase	(10,000)	0	0
Transaction costs paid in connection with share repurchase	(1,987)	0	0
Proceeds from the Business Combination	0	3,375	0
Proceeds from stock options and warrants exercised	1,135	96	0
Proceeds from related party payable	0	51,900	47,850
Proceeds from related party note payable	0	62,500	14,700
Proceeds from other loans	0	9,857	47,832
Repayment of principal on the Scilex Pharma Notes	0	(84,808)	(33,387)
Repayment on other loans	0	(18,800)	(48,832)
Net cash proceeds from financing activities	23,582	21,171	28,163
Net change in cash, cash equivalents and restricted cash	2,545	(2,154)	(501)
Cash and cash equivalents at beginning of period	2,184	4,338	4,839
Cash and cash equivalents at end of period	4,729	2,184	4,338
Supplemental disclosure:
Cash paid for interest	1,426	0	0
Supplemental disclosure of non-cash financing activity
Issuance of shares to B.Riley pursuant to B. Riley Purchase Agreement	1,869	0	0
Conversion of Convertible Debentures into common stock	7,735	0	0
Right-of-use assets obtained in exchange for operating lease liabilities with lease modification	2,523	0	0
Oramed Note issuance at fair value	106,252	0	0
Other non-cash consideration in connection with share repurchase	26,154	0	0
Excise tax in connection with share repurchase included in accrued expenses	1,310	0	0
Related party debt converted to equity pursuant to Debt Exchange Agreement	0	289,733	0
Deferred consideration for Romeg intangible asset acquisition	0	3,650	0
Promissory Note issued to Sorrento in exchange for the SP-104 license	0	4,162	0
Fair value adjustment to derivative liability in troubled debt restructuring	0	30,400	0
Scilex Pharma Notes principal increase	0	0	28,000
Transaction costs obligation assumed by Sorrento	$ 0	$ 5,148	$ 0

Junior DIP Facility and Sorrento Share Purchase Agreement (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	Sep. 21, 2023	Jul. 05, 2023	Dec. 31, 2023
Penny Warrants [Member]
Price per share	$ 0.01
Fair Value Of Warrants	$ 10.4
Warrants exercisable date			Mar. 14, 2025
Subsequent Penny Warrants 1 [Member]
Warrant vesting date			Mar. 19, 2024
Subsequent Penny Warrants 1 [Member] \| Common Stock [Member]
Issue of warrants			2,125,000
Subsequent Penny Warrants 2 [Member]
Warrant vesting date			Jun. 17, 2024
Subsequent Penny Warrants 2 [Member] \| Common Stock [Member]
Issue of warrants			2,125,000
Subsequent Penny Warrants 3 [Member]
Warrant vesting date			Sep. 15, 2024
Subsequent Penny Warrants 3 [Member] \| Common Stock [Member]
Issue of warrants			2,125,000
Subsequent Penny Warrants 4 [Member]
Warrant vesting date			Dec. 14, 2024
Subsequent Penny Warrants 4 [Member] \| Common Stock [Member]
Issue of warrants			2,125,000
Sorrento Stock Purchase Agreement \| Common Stock [Member]
Shares Purchased Under Stock Purchase Agreement	60,068,585
Sorrento Stock Purchase Agreement \| Preferred Stock [Member]
Shares Purchased Under Stock Purchase Agreement	29,057,097
Shares Purchased At Par Value Under Stock Purchase Agreement	$ 0.0001
Fair Value of stock repurchased	$ 52.6
Sorrento Stock Purchase Agreement \| Private Warrants [Member]
Shares Purchased Under Stock Purchase Agreement	3,104,000
Sorrento Stock Purchase Agreement \| Public Warrants [Member]
Shares Purchased Under Stock Purchase Agreement	1,386,617
Oramed Note
Legal fees and expenses	$ 12.3
Cash payment	$ 10.0
Oramed Note \| Closing Penny Warrant [Member] \| Common Stock [Member]
Issue of warrants	4,500,000
Price per share	$ 0.01
Oramed Note \| Subsequent Penny Warrants [Member]
Transfer of warrants	4,000,000
Oramed Note \| Subsequent Penny Warrants [Member] \| Common Stock [Member]
Issue of warrants	8,500,000
Price per share	$ 0.01
Oramed Note \| Penny Warrants [Member] \| Common Stock [Member]
Number Of Share Outstanding	9.90%
Maximum [Member] \| Subsequent Penny Warrants [Member]
Warrants exercisable date			Mar. 14, 2025
Minimum [Member] \| Subsequent Penny Warrants [Member]
Warrants exercisable date			Dec. 14, 2024
Sorrento
Excise tax liability			$ 1.3
Sorrento \| Junior DIP Facility
Initial principal amount		$ 20.0
Debt instrument, interest rate		12.00%
Exit fee		2.00%
Debt instrument, description		The Junior DIP Facility was to mature on the earliest of: (i) September 30, 2023; (ii) the effective date of any Chapter 11 plan of reorganization with respect to Sorrento; (iii) the consummation of any sale or other disposition of all or substantially all of the assets of Sorrento; (iv) the date of the acceleration of the DIP Loans and the termination of the DIP Commitments (as defined in the Junior DIP Loan Agreement) in accordance with the DIP Documents (as defined in the Junior DIP Loan Agreement); and (v) dismissal of the Chapter 11 Cases or conversion of the Chapter 11 Cases into cases under Chapter 7 of the Bankruptcy Code.

Net Loss Per Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

13. Net Loss Per Share

The following table sets forth the reconciliation of basic and diluted loss per share for the years ended December 31, 2023, 2022 and 2021 (in thousands except per share data):


	Year Ended December 31,
	2023			2022			2021
Net loss	$	(114,331	)	$	(23,364	)	$	(88,424	)
Premium on redemption of Preferred Stock		(52,645	)		—			—

Net loss for basic and diluted loss per share available to common stockholders	$	(166,976	)	$	(23,364	)	$	(88,424	)

Weighted average number of shares outstanding - basic		130,298			134,226			132,858
Effect of dilutive securities		—			—			—

Weighted average number of shares and assumed conversions - diluted		130,298			134,226			132,858
Loss per share
Basic and diluted	$	(1.28	)	$	(0.17	)	$	(0.67	)

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Premium paid on redemption of Preferred Stock was added to the net loss to arrive at loss available for common stockholders as it represents a dividend to the preferred stockholder. Diluted earnings per share is computed using the weighted average number of Common Stock and, if dilutive, potential Common Stock outstanding during the period. Potential Common Stock consists of the incremental Common Stock issuable upon the exercise of stock options and warrants (using the treasury stock method).

In the computation of net loss per share, treasury shares are not included as part of the outstanding shares.

In accordance with FASB ASC 260,

Earnings Per Share,

Penny Warrants are warrants that would be exercised for no or little consideration and therefore should be included in the calculation of weighted average shares outstanding for purposes of calculating basic and diluted net income (loss) per share. The Closing Penny Warrants become exercisable upon the passage of time and are included in basic and diluted net income (loss) per share from the closing date of September 21, 2023. The Subsequent Penny Warrants to purchase up to an aggregate of 8,500,000 shares of Common Stock are not vested as of the closing date of September 21, 2023 and the vesting is based on the passage of time, the Company’s repayment of the Oramed Note or the occurrence of the Management Sale Trigger Date (as defined therein). Therefore, these Subsequent Penny Warrants are included in the computation for diluted net income per share once all other exercise contingencies are removed except for the passage of time.

The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:


	December 31, 2023		December 31, 2022		December 31, 2021
Stock options		33,123,798		16,939,093		18,967,724
Public Warrants		6,854,309		6,899,988		—
Private Warrants		3,613,383		4,104,000		—
Retainer Shares		4,000,000		—		—
Shares Issuable pursuant to ESPP		29,806		—		—
Convertible Debentures		546,921		—		—

Total		48,168,217		27,943,081		18,967,724

Subsequent Events (Additional Information (Details) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Thousands	Feb. 29, 2024	Feb. 16, 2024
Subsequent Event [Line Items]
Sold of common share	8.00%
Common stock underwriters exercise, shares	541,176
Legal fees and expenses	$ 200,000
Out Of Pocket Expense	$ 15,950
Sold Of Public Offering Price	1.7
Combined Price Paid Of Warrant	$ 1.564
Subsequent Event, Description		On February 16, 2024, the Company and B. Riley mutually agreed to terminate the B. Riley Purchase Agreement. The termination is effective as of February 16, 2024.
Rodman & Renshaw LLC
Subsequent Event [Line Items]
Common stock sold	5,882,353
Common Warrants Purchase	5,882,353
Purchase Of Common Shares	882,352
Price of Optional Share	$ 1.5548
Price of optional warrant	0.0092
Public Offering Price Per Optional Share	1.69
Public Offering Per Optional Warrant	0.01
Public Offering Price	1.7
Exercise Price Of Warrant	$ 1.7
Warrant [Member]
Subsequent Event [Line Items]
Common Warrants Purchase	882,352
Aggregate shares purchase common warrants	470,588
Exercise price of the Representative Warrants	$ 2.125
Combined public offering price	125.00%

Acquisitions	12 Months Ended
Acquisitions	Dec. 31, 2023
Disclosure Text Block [Abstract]
Acquisitions	3. 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. (“Aardvark”) (i) $3.0 million upon initial approval by the FDA of a new drug application for the SP-104 Assets (which amount may be paid in shares of Common Stock or cash, in the Company’s sole discretion) (the “Development Milestone Payment”) and (ii) $20.0 million in cash, upon achievement of certain net sales by the Company of a commercial product that uses the SP-104 Assets (the “Sales Milestone Payment”). The Company will also pay Aardvark certain royalties in the single digits based on percentages of annual net sales by the Company of a commercial product that uses the SP-104 Assets. The Sales Milestone Payment and sale volume-based future royalties were determined to meet a scope exception for derivative accounting and will not be recognized until the contingencies are realized. The Development Milestone Payment represents a liability, which will be measured at fair value for each reporting period. As of December 31, 2023 and December 31, 2022, the contingent consideration associated with the Development Milestone Payment was $0.2 million, recorded in the other long-term liabilities. GLOPERBA License Agreement In June 2022, the Company entered into a license agreement (the “Romeg License Agreement”) with RxOmeg Therapeutics, LLC (a/k/a Romeg Therapeutics, Inc.) (“Romeg”). Pursuant to the Romeg License Agreement, among other things, Romeg granted the Company (a) a transferable license, with a right to sublicense, to (i) commercialize the pharmaceutical product comprising liquid formulations of colchicine for the prophylactic treatment of gout in adult humans (the “Initial Licensed Product” or “GLOPERBA”) in the United States (including its territories) (the “GLOPERBA Territory”), (ii) develop other products comprising the Initial Licensed Product as an active pharmaceutical ingredient (the “Licensed Products”) and commercialize any such products and (iii) manufacture Licensed Products anywhere in the world, solely for commercialization in the GLOPERBA Territory; and (b) an exclusive, transferable license, with a right to sublicense, to use the trademark GLOPERBA and logos, designs, translations, and modifications thereof in connection with the commercialization of the Initial Licensed Product solely in the GLOPERBA Territory. The Initial Licensed Product, GLOPERBA, was approved and made available in the United States in 2020. As consideration for the license under the Romeg License Agreement, the Company paid Romeg an up-front license fee of $2.0 million, and has agreed to pay Romeg (a) upon the Company’s achievement of certain net sales milestones, certain milestone payments in the aggregate amount of up to $13.0 million, (b) certain royalties, at rates that do not exceed ten percent, based on annual net sales of the Licensed Products by the Company during the applicable royalty term under the Romeg License Agreement, and (c) minimum quarterly royalty payments totaling $7.1 million commencing on the first year anniversary of the effective date of the Romeg License Agreement and ending on the later of (i) expiration of the last-to-expire of the licensed patents covering the Licensed Products in the GLOPERBA Territory or (ii) the tenth anniversary of the effective date of the Romeg License Agreement. In connection with the Romeg License Agreement, the Company recorded an intangible asset for acquired licenses of $5.7 million, which is comprised of the upfront license fee of $2.0 million and deferred consideration of $3.7 million that is the present value of the future minimum royalty payments and immaterial transaction costs. No contingent consideration was recognized as a liability or included in the fair value of the assets as of December 31, 2023 or December 31, 2022. ELYXYB Acquisition On February 12, 2023, the Company entered into an asset purchase agreement (the “ELYXYB APA”) with BioDelivery Sciences International, Inc. (“BDSI”) and Collegium Pharmaceutical, Inc. (“Collegium”, and together with BDSI, the “Sellers”) to acquire the rights to certain patents, trademarks, regulatory approvals, data, contracts, and other rights related to ELYXYB and its commercialization in the United States and Canada (the “ELYXYB Territory”). As consideration for the acquisition, the Company assumed various rights and obligations under the asset purchase agreement between BDSI and Dr. Reddy’s Laboratories Limited, a company incorporated under the laws of India (“DRL”), dated August 3, 2021 (the “DRL APA”), including an irrevocable, royalty-free, exclusive license to know-how and patents of DRL related to ELYXYB and necessary or used to exploit ELYXYB in the ELYXYB Territory. No cash consideration was or will be payable to the Sellers for such acquisition; however, the obligations under the DRL APA that were assumed by the Company include contingent sales and regulatory milestone payments and sales royalties. The Company is also obligated to make quarterly royalty payments to DRL on net sales of ELYXYB in the ELYXYB Territory. In April 2023, the Company launched ELYXYB in the U.S. As of December 31, 2023, the Company had ending balances of accrued royalty payables of $5.0 thousand. As of December 31, 2023, no sales or regulatory milestone payments had been accrued as there were no potential milestones yet considered probable of achievement.

Stock Incentive and Employee Benefit Plans - Schedule of estimate stock-based compensation on the date of grant for stock options and ESPP (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%
Expected stock -price volatility	76.00%	35.00%
Term of options	3 years 10 months 9 days	4 years 10 months 9 days
Black-Scholes Option Pricing Method [Member] \| Stock Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected dividend yield	0.00%
Risk-free interest rate, minimum	3.59%
Risk-free interest rate, maximum	4.74%
Term of options	6 years 3 months
Black-Scholes Option Pricing Method [Member] \| Stock Option [Member] \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected stock -price volatility	40.00%
Black-Scholes Option Pricing Method [Member] \| Stock Option [Member] \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected stock -price volatility	77.00%
Black-Scholes Option Pricing Method [Member] \| Employee Stock Purchase Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected dividend yield	0.00%
Expected stock -price volatility	117.57%
Risk-free interest rate, maximum	5.33%
Term of options	6 months

Commitments and Contingencies (Additional Information) (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 28, 2013	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Apr. 30, 2023
Commitments and Contingencies [Line Items]
Finance lease liabilities		$ 0
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]		Derivative Liability, Noncurrent
Lease Expense		$ 1,100	$ 500	$ 600
Additional ROU assets		2,943	1,131		$ 2,500
Corresponding lease liabilities		2,237	665		$ 2,500
GLOPERBA [Member]
Commitments and Contingencies [Line Items]
Due From Related Party		500
Former Employee [Member]
Commitments and Contingencies [Line Items]
Agreement settlement payment		3,500
Former Employee One[Member]
Commitments and Contingencies [Line Items]
Agreement settlement payment		$ 2,500
Epoladerm [Member]
Commitments and Contingencies [Line Items]
Percentage on net sale		6.00%
Probudur [Member]
Commitments and Contingencies [Line Items]
Percentage on net sale		6.00%
Envelta [Member]
Commitments and Contingencies [Line Items]
Percentage on net sale		6.00%
Product Development Agreement [Member] \| Developers [Member]
Commitments and Contingencies [Line Items]
Royalty expenses		$ 8,500	4,500
Accrued royalty payables		2,400	2,200
Agreement maturity date	Oct. 02, 2028
Agreement maturity renewal description	The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon 6-month written notice.
Product Development Agreement [Member] \| Developers [Member] \| Minimum [Member]
Commitments and Contingencies [Line Items]
Royalty payment percentage related to future years	25.00%
Product Development Agreement [Member] \| Developers [Member] \| Maximum [Member]
Commitments and Contingencies [Line Items]
Royalty payment percentage related to future years	35.00%
Product Development Agreement [Member] \| Scilex Pharma [Member]
Commitments and Contingencies [Line Items]
Royalty expenses		$ 8,300	$ 2,300
Non-cancelable Lease Agreements [Member] \| Minimum [Member] \| Research and Development Facilities [Member]
Commitments and Contingencies [Line Items]
Operating lease, remaining lease term		8 months 12 days
Operating lease, lease term		3 years
Non-cancelable Lease Agreements [Member] \| Maximum [Member] \| Research and Development Facilities [Member]
Commitments and Contingencies [Line Items]
Operating lease, remaining lease term		3 years 9 months 18 days
Operating lease, lease term		5 years

Fair Value Measurements (Details) - Schedule of fair value assets measured on a recurring basis - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Liabilities:
Oramed Note	$ 104,089
Convertible debenture	$ 4,340
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Derivative Liability, Noncurrent	Derivative Liability, Noncurrent
Derivative liabilities	$ 1,518	$ 1,231
Other long-term liabilities	179	163
Total liabilities measured at fair value	110,126	1,394
Level 1 [Member]
Liabilities:
Oramed Note	0
Convertible debenture	0
Derivative liabilities	0	0
Other long-term liabilities	0	0
Total liabilities measured at fair value	0	0
Level 2 [Member]
Liabilities:
Oramed Note	0
Convertible debenture	0
Derivative liabilities	0	0
Other long-term liabilities	0	0
Total liabilities measured at fair value	0	0
Level 3 [Member]
Liabilities:
Oramed Note	104,089
Convertible debenture	4,340
Derivative liabilities	1,518	1,231	$ 35,700	$ 35,400
Other long-term liabilities	179	163
Total liabilities measured at fair value	$ 110,126	$ 1,394

Stock Incentive and Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Options Outstanding Activity

The following table summarizes stock option activity during the year ended December 31, 2023 (shares in thousands):


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life, in years		Aggregate Intrinsic Value
Outstanding as of December 31, 2022		16,939		$	1.68		7.0	$	38,942
Granted		17,610		$	7.02
Exercised		(365	)	$	1.68
Forfeited/Cancelled		(1,060	)	$	6.36

Outstanding as of December 31, 2023		33,124		$	4.38		7.5	$	7,459

Exercisable as of December 31, 2023		18,990		$	2.78		6.3	$	5,600

Schedule of estimate stock-based compensation on the date of grant for stock options and ESPP

The following assumptions were used in the Black-Scholes options pricing model to estimate stock-based compensation on the date of grant for stock options and ESPP:


		Year Ended December 31, 2023
Stock options:
Expected dividend yield		0.00%
Expected volatility		40.00% - 77.00%
Risk-free interest rate		3.59% - 4.74%
Term of options (in years)		6.25
Employee stock purchase plan:
Expected dividend yield		0.00%
Expected volatility		117.57%
Risk-free interest rate		5.33%
Expected life (in years)		0.50

Goodwill and Intangible Assets (Additional Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 13,481	$ 13,481
Goodwill impairment charges	$ 0	0	$ 0
Weighted average remaining life for identifiable intangible assets	9 years 4 months 24 days
Amortization expense	$ 4,106	$ 3,922	$ 3,738

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and equipment

Property and equipment, net, consists of the following (in thousands):


	December 31, 2023			December 31, 2022
Construction in progress	$	689		$	689
Furniture		5			118
Computers and equipment		36			77
Leasehold improvements		50			55

Property and equipment, gross		780			939
Less: Accumulated depreciation		(58	)		(167	)

Property and equipment, net	$	722		$	772

Schedule of Acrcued expenses

Accrued expenses consists of the following (in thousands):


	December 31, 2023		December 31, 2022
Accrued professional service fees	$	2,029	$	2,024
Accrued sales and marketing costs		1,601		574
Accrued research and development costs		1,546		459
Accrued tax payable		1,452		—
Accrued others		780		79

Accrued expenses	$	7,408	$	3,136

Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the level of inputs used in such measurements (in thousands):


	December 31, 2023
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Oramed Note	$	104,089	$	—	$	—	$	104,089
Convertible Debentures		4,340		—		—		4,340
Derivative liabilities		1,518		—		—		1,518
Other long-term liabilities		179		—		—		179

Total liabilities measured at fair value	$	110,126	$	—	$	—	$	110,126


	December 31, 2022
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Derivative liabilities	$	1,231	$	—	$	—	$	1,231
Other long-term liabilities		163		—		—		163

Total liabilities measured at fair value	$	1,394	$	—	$	—	$	1,394

The Oramed Note

In September 2023, the Company issued a senior secured promissory note to Oramed Pharmaceuticals Inc. (“Oramed”) in the principal amount of $101.9 million (the “Oramed Note”) (see Note 7). The Company elected the fair value option to account for the Oramed Note with any changes in the fair value of the note recorded in the consolidated statements of operations. The Company uses a discounted cash flow model to determine the fair value of the Oramed Note based on Level 3 inputs. This methodology discounts the interest and principal payments using a risk-adjusted discount rate. The fair value as of December 31, 2023 was determined to be $104.1 million by applying a discount rate of 13.05%. For the year ended December 31, 2023, the Company recorded $2.8 million in change in fair value of the Oramed Note.

Convertible Debentures

In March and April 2023, the Company issued the Convertible Debentures in the principal amount of $25.0 million (see Note 7). The Convertible Debentures are measured at fair value on a recurring basis using Level 3 inputs. The Company uses the Binomial Lattice Model valuation technique to measure the fair value of the Convertible Debentures with any changes in the fair value of the Convertible Debentures recorded in the consolidated statements of operations. Interest expense related to the Convertible Debentures is included in the changes in fair value. For the year ended December 31, 2023, the Company recorded $4.4 million in change in

fair value of the Convertible Debentures. A summary of inputs used in valuing the Convertible Debentures is as follows:


	December 31, 2023
Risk -Free Rate		5.31	%
Corporate Bond Yield		15.60	%
Coupon Interest Rate		7.0	%
Volatility		70.0	%
Dividend Yield		0.0	%
Conversion Price	$	8.00

Derivative Liabilities

The Company recorded a gain of $0.5 million and $8.3 million and a loss of $0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively, on derivative liabilities which was attributed to the Private Warrants that the Company assumed from Vickers in November 2022 in connection with the Business Combination and compound derivative liabilities associated with the senior secured notes issued by Scilex Pharma in September 2018 (the “Scilex Pharma Notes”), respectively. The fair value of the derivative liability associated with the Scilex Pharma Notes decreased by $30.4 million immediately after entry into Amendment No. 4 to the Scilex Pharma Notes on June 2, 2022 (“Amendment No. 4”). The fair value of the derivative liability associated with the Scilex Pharma Notes was estimated using the discounted cash flow method combined with a Monte Carlo simulation model including consideration of the terms of Amendment No. 4. Significant Level 3 assumptions used in the measurement included a 6.1% risk adjusted net sales forecast and an effective debt yield of 21.5%. The Scilex Pharma Notes were fully extinguished in September 2022 and, as such, there were no remaining loan derivative liabilities associated with the Scilex Pharma Notes as of December 31, 2022. At the closing of the Business Combination in November 2022, the Company assumed a derivative warrant liability of $2.5 million related to the Private Warrants.

As of December 31, 2023, 3,613,383 Private Warrants were outstanding, and the fair value of derivative warrant liability related to the Private Warrants was $1.5 million.

The following table includes a summary of the derivative liabilities measured at fair value during the three years ended December 31, 2023, 2022 and 2021 (in thousands):


	Fair Value
Ending Balance as of December 31, 2020	$	35,400
Re-measurement of fair value		300

Ending Balance as of December 31, 2021		35,700
Private warrant liability acquired as part of the Business Combination		2,545
Forfeiture of Private Warrants		1,696
Change in fair value measurement		(38,710	)

Ending Balance as of December 31, 2022		1,231
Change in fair value measurement		512
Forfeiture of Private Warrants		(225	)

Ending Balance as of December 31, 2023	$	1,518

Warrant Liability Measurement

The derivative warrant liability was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value measurement. 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 historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants (see Note 9). A summary of the inputs used in valuing the derivative warrant liabilities is as follows:


	December 31, 2023			December 31, 2022
Equity value	$	2.04		$	3.99
Exercise price	$	11.50		$	11.50
Term, in years		3.86			4.86
Volatility		76.0	%		35.0	%
Risk-free rate		3.90	%		3.94	%
Dividend yield		0.0	%		0.0	%
Call option value	$	0.42		$	0.30

Contingent Consideration Related to

SP-104

Acquisition

The Development Milestone Payment related to the

SP-104

Assets represents an obligation to potentially settle a fixed value in a variable number of shares of Common Stock and requires remeasurement at fair value through settlement.

Upon the achievement of FDA approval for a new drug application for

SP-104,

the Company will transfer $3.0 million in cash or shares of Common Stock, at the discretion of the Company. The fair value of the contingent consideration liability associated with the Development Milestone Payment was estimated using a probability-weighted discounted cash flow method. 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 10.2%. As of December 31, 2023 and December 31, 2022, the fair value of contingent consideration related to the Development Milestone Payment was $0.2 million.

There were no transfers between fair value measurement levels during the years ended December 31, 2023, 2022 and 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Balance Sheet Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 780	$ 939
Less: Accumulated depreciation	(58)	(167)
Property and equipment, net	722	772
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	689	689
Furniture [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5	118
Computers & equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	36	77
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 50	$ 55

Commitments and Contingencies - Schedule of Lease Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
2024	$ 1,042
2025	916
2026	944
2027	724
Total lease payments	3,626
Less imputed interest	(630)
Total lease liabilities	2,996
Less current portion of lease liability	759	$ 745
Lease liability, net of current portion	$ 2,237

Debt (Additional Information) (Details) - USD ($)							12 Months Ended
Debt (Additional Information) (Details) - USD ($)	Sep. 30, 2023	Sep. 21, 2023	Jul. 01, 2023	Jun. 27, 2023	Apr. 30, 2023	Mar. 21, 2023	Dec. 31, 2023	Oct. 11, 2023	Sep. 25, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt					$ 25,000,000
Debt conversion price							$ 8
Debt Instrument Redemption							The Company has the right, but not the obligation, in its sole discretion, to redeem, upon five business days’ prior written notice to Yorkville (the “Redemption Notice”), all or any portion of the amounts outstanding under the Convertible Debentures; provided that the trading price of the Common Stock is less than the Conversion Price at the time of the Redemption Notice. The redemption amount shall be equal to the outstanding principal balance being redeemed by the Company, plus the redemption premium of 10% of the principal amount being redeemed, plus all accrued and unpaid interest in respect of such redeemed principal amount.
Common stock, shares issued							160,084,250		474,683	141,348,856
Maximum [Member]
Debt Instrument [Line Items]
Debt conversion price								$ 2
Minimum [Member]
Debt Instrument [Line Items]
Debt conversion price								$ 0.5
Oramed Note
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt	$ 101,900,000
Estimated fair value							$ 104,100,000
Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt						$ 25,000,000
Debt instrument, description							The Yorkville SPA provides that the Convertible Debentures would be issued and sold at a purchase price equal to 96% of the applicable principal amount in three tranches as follows: (i) $10.0 million upon the signing of the Yorkville SPA, which was funded on March 21, 2023; (ii) $7.5 million upon the filing of a registration statement on Form S-1 with the SEC to register the resale by Yorkville of any shares of Common Stock issuable upon conversion of the Convertible Debentures under the Securities Act of 1933, as amended (the “Securities Act”), which was funded on April 11, 2023; and (iii) $7.5 million at the time such registration statement was declared effective by the SEC, which was funded on April 20, 2023.
Debt instrument, interest rate						7.00%
Debt maturity date						Dec. 21, 2023	Mar. 15, 2024
Debt conversion price						$ 8
Debt Instrument Principal Amount, Percentage						5.00%
Debt payment terms							The Company has the option to repay either (i) in cash, with premium equal to 5% in respect of the principal amount of such payment, or (ii) by submitting a notice for an advance under the A&R Yorkville Purchase Agreement, or a series of advances thereunder, or any combination of (i) or (ii) as determined by the Company. In the case of (ii), the proceeds from the shares sold to Yorkville are applied against the outstanding amounts.
Convertible Debentures Issued Percent						96.00%
Redemption Premium							10.00%
Securities Purchase Agreement [Member] \| First installment [Member]
Debt Instrument [Line Items]
Repayment of debt prinnciple installment		$ 5,000,000
Securities Purchase Agreement [Member] \| Second Installment [Member]
Debt Instrument [Line Items]
Repayment of debt prinnciple installment		15,000,000
Securities Purchase Agreement [Member] \| Third Installment [Member]
Debt Instrument [Line Items]
Repayment of debt prinnciple installment		20,000,000
Securities Purchase Agreement [Member] \| Oramed Note
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt		101,900,000
Debt instrument, description							Interest under the Oramed Note accrues at a fluctuating per annum interest rate equal to the sum of (1) greater of (x) 4% and (y) Term SOFR (as defined in the Oramed Note) and (2) 8.5%, payable in-kind on a monthly basis. If the outstanding principal has not been fully repaid by March 21, 2024, an exit fee of approximately $3.1 million becomes due upon repayment. Upon the occurrence and during the continuance of an event of default under the Oramed Note, holders of more than 50% of the aggregate unpaid principal amount of the Oramed Notes may elect to accrue interest at a default rate equal to the lesser of (i) Term SOFR plus 15% or (ii) the maximum rate permitted under applicable law. Voluntary prepayments made before the one-year anniversary of the closing date of the Scilex-Oramed SPA must include a make-whole amount equal to 50% of the additional interest that would accrue on the principal amount so prepaid from the date of such prepayment through and including the maturity date. If the Oramed Note is accelerated upon an event of default, repayment is required at a mandatory default rate of 125% of the principal amount (together with 100% of accrued and unpaid interest thereon and all other amounts due in respect of the Oramed Note). The Oramed Note contains mandatory prepayment provisions requiring use of 70% of net cash proceeds from any Cash Sweep Financing (as defined in the Oramed Note) or advances under the ELOCs (as defined in the Oramed Note) to prepay the outstanding principal after the earlier of April 1, 2024 or full repayment of Acceptable Indebtedness (as defined in the Oramed Note).
Estimated fair value							$ 104,100,000
Debt Repayment Exit Fee		$ 3,100,000
Debt instrument, interest rate		4.00%
Debt maturity date		Mar. 21, 2025
Debt instrument, owned, percentage		50.00%
Debt instrument, default interest rate		15.00%
Debt instrument, percentage of interest accrued on principal amount		50.00%
Debt repayment, percentage of mandatory default rate of principal amount		125.00%
Debt repayment, percentage of mandatory default rate of accrued and unpaid interest		100.00%
Percentage of usage of cash proceeds from cash sweep financing		70.00%
Securities Purchase Agreement [Member] \| Oramed Note \| Monthly Basis [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate		8.50%
Securities Purchase Agreement [Member] \| Oramed Note \| First installment [Member]
Debt Instrument [Line Items]
Debt maturity date		Mar. 21, 2025
Securities Purchase Agreement [Member] \| Oramed Note \| Second Installment [Member]
Debt Instrument [Line Items]
Debt maturity date		Dec. 21, 2023
Securities Purchase Agreement [Member] \| Oramed Note \| Third Installment [Member]
Debt Instrument [Line Items]
Debt maturity date		Mar. 21, 2024
Securities Purchase Agreement [Member] \| Oramed Note \| Fourth Installment [Member]
Debt Instrument [Line Items]
Debt maturity date		Jun. 21, 2024
Securities Purchase Agreement [Member] \| Oramed Note \| Five Installment [Member]
Debt Instrument [Line Items]
Debt maturity date		Sep. 21, 2024
Securities Purchase Agreement [Member] \| Oramed Note \| Six Installment [Member]
Debt Instrument [Line Items]
Debt maturity date		Dec. 21, 2024
Tranche One \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt						$ 10,000,000
Tranche Two \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt						7,500,000
Tranche Three \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt						$ 7,500,000
A&R Yorkville Purchase Agreement
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt					15,000,000
Net cash proceeds					$ 14,400,000
Convertible Debentures Repaid							$ 15,600,000
Common Stock at a conversion price							$ 8
Outstanding debt instrument							$ 4,400,000
Change in fair value							$ 700,000
Servicing Liability, Fair Value, Change in Fair Value, Other, Statement of Income or Comprehensive Income [Extensible Enumeration]							Operating Costs and Expenses
Outstanding principal amount							$ 5,000,000
Common stock, shares issued							632,431
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Aggregate Principle amount of issued debt							$ 75,000,000
Termination fees							0.50%
Facility cap maximum				95.00%
Facility cap minimum				85.00%
Outstanding debt instrument				$ 250,000
Cash on hand							$ 1,000,000
Outstanding principal amount							$ 17,000,000
Accounts receivable revolving loan facility in an aggregate amount		$ 30,000,000		$ 30,000,000
Line Of Credit Facility Interest Rate			1.50%

Commitments and Contingencies - Schedule of Leases Supplemental Quantitative Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ (1,021)	$ (746)
Weighted average remaining lease term in years - operating leases	3 years 7 months 6 days	1 year 9 months 18 days
Weighted average discount rate - operating leases	11.10%	11.80%

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value assets measured on a recurring basis

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the level of inputs used in such measurements (in thousands):


	December 31, 2023
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Oramed Note	$	104,089	$	—	$	—	$	104,089
Convertible Debentures		4,340		—		—		4,340
Derivative liabilities		1,518		—		—		1,518
Other long-term liabilities		179		—		—		179

Total liabilities measured at fair value	$	110,126	$	—	$	—	$	110,126


	December 31, 2022
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Derivative liabilities	$	1,231	$	—	$	—	$	1,231
Other long-term liabilities		163		—		—		163

Total liabilities measured at fair value	$	1,394	$	—	$	—	$	1,394

Schedule of convertible debentures

A summary of inputs used in valuing the Convertible Debentures is as follows:


	December 31, 2023
Risk -Free Rate		5.31	%
Corporate Bond Yield		15.60	%
Coupon Interest Rate		7.0	%
Volatility		70.0	%
Dividend Yield		0.0	%
Conversion Price	$	8.00

Schedule of the derivative liabilities measured at fair value using significant unobservable inputs Level 3

The following table includes a summary of the derivative liabilities measured at fair value during the three years ended December 31, 2023, 2022 and 2021 (in thousands):


	Fair Value
Ending Balance as of December 31, 2020	$	35,400
Re-measurement of fair value		300

Ending Balance as of December 31, 2021		35,700
Private warrant liability acquired as part of the Business Combination		2,545
Forfeiture of Private Warrants		1,696
Change in fair value measurement		(38,710	)

Ending Balance as of December 31, 2022		1,231
Change in fair value measurement		512
Forfeiture of Private Warrants		(225	)

Ending Balance as of December 31, 2023	$	1,518

Schedule of quantitative information regarding Level 3 fair value measurements


	December 31, 2023			December 31, 2022
Equity value	$	2.04		$	3.99
Exercise price	$	11.50		$	11.50
Term, in years		3.86			4.86
Volatility		76.0	%		35.0	%
Risk-free rate		3.90	%		3.94	%
Dividend yield		0.0	%		0.0	%
Call option value	$	0.42		$	0.30

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

+ References + Details

Net Loss Per Share (Additional Information) (Details) - shares	Dec. 31, 2023	Sep. 25, 2023	Sep. 21, 2023	Dec. 31, 2022
Common stock, shares issued	160,084,250	474,683		141,348,856
Penny Warrant [Member]
Common stock, shares issued			8,500,000

Nature of Operations and Basis of Presentation

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Nature of Operations and Basis of Presentation

1. 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 the successor entity to Vickers Vantage Corp. I (“Vickers”), a special purpose acquisition company. 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. The Company was originally formed in 2019 and currently has five wholly owned subsidiaries, Scilex Inc. (“Legacy Scilex”), Scilex Pharmaceuticals Inc. (“Scilex Pharma”), Semnur Pharmaceuticals, Inc. (“Semnur”), SCLX DRE Holdings LLC and SCLX Stock Acquisition JV LLC. The business combination with Vickers (the “Business Combination”) was closed in November 2022.

The Company launched its first commercial product in October 2018, ZTlido (lidocaine topical system) 1.8% (“ZTlido”), a prescription lidocaine topical system that is designed with novel technology to address the limitations of current prescription lidocaine therapies by providing significantly improved adhesion and continuous pain relief throughout the

12-hour

administration period. The Company

in-licensed

the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution (“GLOPERBA”), a U.S. Food and Drug Administration (“FDA”)-approved prophylactic treatment for painful gout flares in adults, in the United States (“U.S.”). In February 2023, the Company acquired the rights related to ELYXYB (celecoxib oral solution) (“ELYXYB”) and the commercialization thereof in the U.S. and Canada. ELYXYB is a first-line treatment and the only

FDA-approved,

ready-to-use

oral solution for the acute treatment of migraine, with or without aura, in adults. In April 2023, the Company launched ELYXYB in the U.S. The Company expects to commercialize GLOPERBA in the U.S. in the first half of 2024.

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 has recently completed a Phase 2 trial in low back pain, 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 and a Phase 2 clinical trial is expected to commence in 2024. Since inception, the Company has devoted substantially all of its efforts to the development of

SP-102,

SP-103

and

SP-104,

and the commercialization of ZTlido. In 2024, the Company will also devote efforts on the commercialization of GLOPERBA and ELYXYB.

Sorrento Chapter 11 Filing

On February 13, 2023, Sorrento Therapeutics, Inc. (“Sorrento”), the Company’s then-controlling stockholder, and Sorrento’s wholly owned direct subsidiary, Scintilla Pharmaceuticals, Inc. (“Scintilla” and together with Sorrento, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors’ Chapter 11 proceedings are jointly administered under the caption In re Sorrento Therapeutics, Inc., et al., Case Number

23-90085

(DRJ) (the “Chapter 11 Cases”). While the Company was majority-owned by Sorrento, the Company was not a debtor in the Chapter 11 Cases. As of December 31, 2023, Sorrento no longer holds a majority of the voting power of the Company’s outstanding capital stock entitled to vote. As of December 31, 2023, the Company had a $3.2 million receivable from Sorrento, which was fully reserved. The Company evaluates the collectability of this receivable on a quarterly basis.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.

The accompanying consolidated financial statements include the accounts of the Company as well as its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Segments

Operating segments are identified as components of an entity where separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assessing performance. The Company has determined that its chief operating decision maker is its Chief Executive Officer, as he is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions. The Company is engaged primarily in the development of

non-opioid

products focused on pain management based on its platform technologies and all sales are based in the United States. Accordingly, the Company has determined that it operates its business as a single reportable segment.

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. Management believes that these estimates are reasonable; however, actual results may differ from these estimates.

Customer Concentration Risk

Prior to April 2022, sales to the Company’s sole distributor represented 100% of net revenue. In April 2022, the Company announced the expansion of its direct distribution network to national and regional wholesalers and pharmacies. The Company had three and four customers during the years ended December 31, 2023 and 2022, respectively, each of which individually generated 10% or more of the Company’s total revenue. These customers accounted for 85% and 83% of the Company’s revenue for the years ended December 31, 2023 and 2022, respectively, individually ranging from 22% to 32% and 19% to 24%, respectively. As of December 31, 2023 and 2022, these customers represented 91% and 90% of the Company’s outstanding accounts receivable, respectively, individually ranging between 24% and 36% for both periods. Additionally, during the years ended December 31, 2023 and 2022, the Company purchased ZTlido inventory from its sole supplier, Itochu Chemical Frontier Corporation (“Itochu”). This exposes the Company to concentration of customer and supplier risk. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses during the years ended December 31, 2023 and 2022.

Fair Value Measurements

Financial assets and liabilities are recorded at fair value on a recurring basis in the consolidated balance sheets. The carrying values of the Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable and accrued expenses approximate to their fair value due to the short-term nature of these instruments. The derivative warrant liability associated with the Private Warrants (as defined below) is valued using the Black-Scholes option pricing model, which is further discussed in Note 4. The Company elected the fair value option to account for the Convertible Debentures (as defined below) in an aggregate principal amount of up to $25.0 million that were issued in March and April 2023

and for the Oramed Note (as defined below) in the principal amount of $101.9 million that was issued in September 2023 (see Note 7 titled “

Debt”

below). These instruments are measured at fair value on a recurring basis using Level 3 inputs. The Binomial Lattice Model valuation technique and a discounted cash flow model were employed to measure the fair value of the Convertible Debentures and the Oramed Note, respectively. The Revolving Facility (as defined below) in an aggregate principal amount of up to $30.0 million was issued in June 2023 (see Note 7 titled “

Debt”

below). The Company accounts for the Revolving Facility using the amortized cost basis and recognizes interest expense over the expected term using the effective interest rate method. The carrying value of the Revolving Facility approximates its fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:

Level 1 -

Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 -

Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

Level 3 -

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value.

Restricted cash as of December 31, 2023 consist of deposits placed in a segregated bank account as required under the terms of the Credit and Security Agreement, dated as of June 27, 2023, between Scilex Pharma and eCapital Healthcare Corp., which is discussed further in Note 7. Restricted cash is recorded as other long-term assets within the Company’s consolidated balance sheet.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that together reflect the same amounts shown in the consolidated statements of cash flows (in thousands):


	December 31, 2023		December 31, 2022
Cash and cash equivalents	$	3,921	$	2,184
Restricted cash		808		—

Total cash, cash equivalents, and restricted cash	$	4,729	$	2,184

Accounts Receivable, Net

Accounts receivable are presented net of allowances for expected credit losses and prompt payment discounts. Accounts receivable consists of trade receivables from product sales to customers, which are generally unsecured. Estimated credit losses related to trade accounts receivable are recorded as general and administrative expenses and as an allowance for expected credit losses within accounts receivable, net. The Company reviews

reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for expected credit losses.

Inventory

The Company determines inventory cost on a

first-in,

first-out

basis. The Company reduces the carrying value of inventories to a lower of cost or net realizable value for those items that are potentially excess, obsolete or slow- moving. The Company reserves for excess and obsolete inventory based upon historical experience, sales trends, and specific categories of inventory and expiration dates for

on-hand

inventory. Inventory costs resulting from these adjustments are recognized as cost of sales in the period in which they are incurred. When future commercialization is considered probable and the future economic benefit is expected to be realized, based on management’s judgment, the Company capitalizes

pre-launch

inventory costs prior to regulatory approval. As of December 31, 2023 and 2022, the Company’s inventory was primarily comprised of finished goods.

Property and Equipment, Net

Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally five to seven years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the respective lease on a straight-line basis. The cost of repairs and maintenance is expensed as incurred.

Acquisitions

The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including

in-process

research and development (“IPR&D”) projects and liabilities assumed be recorded at their fair values as of the acquisition date on the Company`s consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred.

When the Company determines net assets acquired do not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded and contingent consideration such as payments upon achievement of various developmental, regulatory and commercial milestones generally is not recognized at the acquisition date. In an asset acquisition,

up-front

payments allocated to IPR&D projects at the acquisition date and subsequent milestone payments are charged to expense in the Company`s consolidated statements of operations unless there is an alternative future use.

The Company has acquired and may continue to acquire the rights to develop and commercialize new product candidates. 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. Capitalized IPR&D is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable.

Goodwill and Other Long-Lived Assets

Goodwill, which has an indefinite life, represents the excess cost over fair value of net assets acquired. 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. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test.

The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, patent rights, and acquired technology, for impairment by considering competition by products prescribed for the same indication, the likelihood and estimated future entry of

non-generic

and generic competition with the same or similar indication and other related factors. The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparison of the assets’ book value to future net undiscounted cash flows that the assets are expected to generate to determine if a write-down to the recoverable amount is appropriate. If such assets are written down, an impairment will be recognized as the amount by which the book value of the asset group exceeds the recoverable amount.

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. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with applicable milestones, discount rates and the related probabilities and payment structure in the contingent consideration arrangement. Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the consolidated statement of operations. Other than contingent consideration that is accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity, and Topic 815, Derivatives and Hedging, contingent consideration arrangements assumed in an asset acquisition will be measured and accrued when such contingency is resolved.

Public Warrants and Private Warrants

Upon completion of the Business Combination, the Company assumed public and private placement warrants to purchase Common Stock, each with an exercise price of $11.50 per share (“Public Warrants” and “Private Warrants”, respectively, and collectively, the “SPAC Warrants”) that were issued by Vickers in connection with its initial public offering (declared effective by the Securities and Exchange Commission (“SEC”) on January 11, 2021) whereby holders of the public and private placement warrants are entitled to acquire ordinary shares of Vickers.

Subsequent to the Business Combination, the Public Warrants were accounted for as equity per FASB ASC Subtopic

No. 815-40,

Contracts on an Entity’s Own Equity. Warrants classified as equity are recorded at their issuance cost and are not subject to remeasurement at each subsequent balance sheet date.

Subsequent to the Business Combination, the Private Warrants were accounted for as liabilities per ASC Subtopic

815-40.

The Private Warrants are not considered indexed to the Company’s stock per ASC Subtopic

815-40

as the fair value calculation applicable upon a cashless exercise of a Private Warrant changes based upon the holder of the instrument, which is not an input to a valuation model for a

fixed-for-fixed

option contract. Therefore, Private Warrants are recognized as derivative liabilities at their estimated fair value on November 10, 2022, the date of the closing of the Business Combination, and are revalued at each subsequent balance sheet

date, with fair value changes recognized in the statement of operations. The Company estimates the value of these warrants using a Black-Scholes option pricing formula.

Debt

The Company may enter into financing arrangements, the terms of which involve significant assumptions and estimates. This involves estimating future net product sales, determining interest expense, determining the amortization period of the debt discount, as well as determining the classification between current and long-term portions.

Convertible Debentures and the Oramed Note

The Company has elected the fair value option to account for the Convertible Debentures (as defined in Note 2 “

Liquidity and Going Concern

” below) that were issued in March and April 2023, as discussed further in Note 7. The Company has also elected the fair value option to account for the Oramed Note (as defined in Note 4 “

Fair Value Measurements

” below). The Company recorded the Convertible Debentures and the Oramed Note at fair value upon issuance with changes in fair value recorded as change in fair value of debt and liability instruments in the consolidated statements of operations, with the exception of changes in fair value due to instrument-specific credit risk, if any, which are recorded as a component of other comprehensive income. Interest expense related to these financial instruments is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to the Convertible Debentures and the Oramed Note were expensed as incurred. The weighted-average interest rates for the short-term loans, including the Convertible Debentures and the Oramed Note, were 13.55% and nil for the years ended December 31, 2023 and 2022, respectively.

Derivative Liabilities

Derivative liabilities are recorded on the Company’s 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.

Research and Development Costs

The Company expenses the cost of research and development as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and preclinical materials as well as other contracted services, license fees and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with FASB ASC Topic 730, Research and Development.

Income Taxes

The provisions of the FASB ASC Topic 740, Income Taxes, address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Subtopic

740-10,

the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has uncertain tax positions.

The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates.

The Company has deferred tax assets, which are subject to periodic recoverability assessments. 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, 2023 and 2022, the Company maintained a full valuation allowance against its deferred tax assets.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease

right-of-use

(“ROU”) assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and is reduced by lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. 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.

Revenue from product sales is comprised of sales of ZTlido and ELYXYB. The Company’s performance obligation with respect to sales of ZTlido and ELYXYB is satisfied at a point in time, when control is transferred upon delivery of product to the customer. 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. 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, 2023 and 2022 were not material.

Revenues from product sales are recorded net of reserves established for commercial and government rebates, fees and chargebacks, wholesaler and distributor fees, sales returns and prompt payment discounts. 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 the Company’s customer contract, customary industry practices and current government regulations.

Rebates and Chargebacks

Rebates are discounts which the Company pays under either government or private health care programs. Government rebate programs include state Medicaid drug rebate programs, the Medicare coverage gap discount programs and the Tricare programs. Commercial rebate and fee programs relate to contractual agreements with commercial healthcare providers, under which the Company pays rebates and fees for access to and position on that provider’s patient drug formulary. Rebates and chargebacks paid under government programs are generally mandated under law, whereas private rebates and fees are generally contractually negotiated by the Company with commercial healthcare providers. Both types of rebates vary over time. The Company records a reduction to gross product sales at the time the customer takes title to the product based on estimates of expected rebate claims. The Company monitors the sales trends and adjusts for these rebates on a regular basis to reflect the most recent rebate experience and contractual obligations. Reserves for rebates and chargebacks are now separately presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheet.

Prompt Payment Discounts

The Company provides its customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The

prompt payment discount reserve is based on actual gross sales and contractual discount rates. Reserves for prompt payment discounts are included in accounts receivable, net on the consolidated balance sheets.

Service Fees

The Company compensates its customer and others in the distribution chain for wholesaler and distribution services. The Company has determined such services received to date are not distinct from the Company’s sale of products to the customer and, therefore, these payments have been recorded as a reduction of revenue.

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. The Company estimates the amount of its product sales that may be returned by its customer and records this estimate as a reduction of revenue in the period the related product revenue is recognized.

Co-Payment

Assistance

Patients who have commercial insurance or pay cash and meet certain eligibility requirements may receive

co-

payment assistance. The Company accrues for

co-payment

assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators.

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. Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee’s requisite service period (generally the vesting period of the equity grant) or

non-employee’s

vesting period. The Company accounts for forfeitures as incurred.

For purposes of determining the inputs used in the calculation of stock-based compensation, the Company determines the expected life assumption for options issued using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period since the Company does not have historic exercise behavior. Then the Company determines an estimate of option volatility based on an assessment of historical volatilities of comparable companies whose share prices are publicly available. The Company uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted, any fluctuations in these calculations could have a material effect on the results presented in our consolidated statement of operations.

Treasury Stock

The Company uses the cost method to account for repurchases of its stock. In the computation of net (loss) income per share, treasury shares are not included as part of the outstanding shares.

Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the

two-class

method required for participating securities. Net loss per share has been retrospectively adjusted for all periods presented prior to the Business Combination.

Under the

two-class

method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options and warrants.

As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.

Recently Adopted Accounting Pronouncements

In October 2021, FASB issued Accounting Standards Updates (“ASU”) 2021-08,

Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

(“ASU 2021-08”)

, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with ASC Topic 606. ASU

2021-08

is effective for fiscal years beginning after December 15, 2022. ASU

2021-08

should be applied prospectively to business combinations occurring on or after the adoption date. The Company adopted this guidance as of January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements.

In June 2022, the FASB issued ASU

2022-03,

Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU

2022-03”),

which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value. Recognizing such a restriction as a separate unit of account is also not permitted. ASU

2022-03

is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements.

Goodwill and Intangible Assets - Estimated future amortization expense of intangible assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
As of March 31,2023
2024	$ 4,031
2025	4,006
2026	4,006
2027	4,006
2028	4,006
Thereafter	16,430
Total	$ 36,485	$ 40,591

Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income tax benefit at federal statutory rate	$ (24,007)	$ (4,905)	$ (19,150)
Valuation allowance	29,232	10,900	15,422
Debt discount and interest limitation	0	(9,293)	8,954
Compensation expense	3,798	2,469	224
Acquisition related charges	260	992	75
Prior year true-up and carryback	(5,079)	(713)	(3,968)
State, net of federal tax benefit	(5,127)	(174)	(2,545)
Change in fair value of Convertible Debentures	1,752	0	0
Change in tax rates	(1,471)	0	0
Other	655	728	993
Total	$ 13	$ 4	$ 5

Income Taxes - Schedule of Components of Benefit for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current Federal, State and Local, Tax Expense (Benefit) [Abstract]
Federal	$ 0	$ 0	$ 0
State	13	4	5
Total current	13	4	5
Deferred income tax expense (benefit):
Federal	(16,514)	(10,396)	(12,981)
State	(11,247)	(1,851)	(2,472)
Total deferred	(27,761)	(12,247)	(15,453)
Changes in tax rate	(1,471)	1,347	31
Changes in valuation allowance	29,232	10,900	15,422
Total	$ 13	$ 4	$ 5

Balance Sheet Components

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Balance Sheet Components

5. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):


	December 31, 2023			December 31, 2022
Construction in progress	$	689		$	689
Furniture		5			118
Computers and equipment		36			77
Leasehold improvements		50			55

Property and equipment, gross		780			939
Less: Accumulated depreciation		(58	)		(167	)

Property and equipment, net	$	722		$	772

The Company recognized depreciation expense of $40.0 thousand, $40.0 thousand and $39.0 thousand for the years ended December 31, 2023, 2022 and 2021, respectively.

Accrued Expenses

Accrued expenses consists of the following (in thousands):


	December 31, 2023		December 31, 2022
Accrued professional service fees	$	2,029	$	2,024
Accrued sales and marketing costs		1,601		574
Accrued research and development costs		1,546		459
Accrued tax payable		1,452		—
Accrued others		780		79

Accrued expenses	$	7,408	$	3,136

Acquisitions (Additional Information) (Details) - USD ($)			12 Months Ended
	Jun. 14, 2022	May 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Payment to acquire license			$ 0
Accrued Royalty Payables			5,000
Patents [Member] \| Sorrento [Member]
Business Acquisition [Line Items]
Payment upon the achievement of net sales		$ 20,000,000
Amount due for New Drug Application		$ 3,000,000
License Agreement
Business Acquisition [Line Items]
Development milestones payment was recognized under other long-term liabilities			200,000	$ 200,000
License Agreement \| Romeg License Agreement [Member]
Business Acquisition [Line Items]
Up-front license fee	$ 2,000,000
Payment upon the achievement of net sales	13,000,000
Payments for royalties	7,100,000
Intangible asset	5,700,000
Deferred consideration	$ 3,700,000
Contingent consideration, liability			$ 0	$ 0

Nature of Operations and Basis of Presentation (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023	Jun. 30, 2023	Apr. 30, 2022
Description of Organization and Business Operations (Details) [Line Items]
Receivables	$ 3.2
Exercise price	$ 11.5	$ 11.5
Customer Concentration Risk [Member]
Description of Organization and Business Operations (Details) [Line Items]
Percentage of net revenue, sole distributor	10.00%	10.00%			100.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	85.00%	83.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Minimum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	22.00%	19.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Maximum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	32.00%	24.00%
Customer Concentration Risk [Member] \| Accounts Receivable [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	91.00%	90.00%
Customer Concentration Risk [Member] \| Accounts Receivable [Member] \| Minimum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	24.00%	36.00%
Convertible Debentures [Member]
Description of Organization and Business Operations (Details) [Line Items]
Debt principal amount	$ 25.0		$ 101.9	$ 30.0
Debt Weighted Average Interest Rate	13.55%	13.55%

Debt - Summery of Outstanding Convertible Debenture (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Conversion of Convertible Debentures into common stock	$ (7,735)	$ 0	$ 0
Senior Notes [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Convertible debentures, beginning period	0
Issuance of Convertible Debentures	106,252
Repayment of Convertible Debentures	(5,000)
Change in fair value of Convertible debentures	(2,837)
Convertible debentures, ending period	104,089	0
Convertible Debentures [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Convertible debentures, beginning period	0
Issuance of Convertible Debentures	24,000
Repayment of Convertible Debentures	(15,625)
Change in fair value of Convertible debentures	(3,700)
Conversion of Convertible Debentures into common stock	(7,735)
Convertible debentures, ending period	$ 4,340	$ 0

Liquidity and Going Concern (Additional Information) (Details) - USD ($)					12 Months Ended
	Jun. 27, 2023	Apr. 30, 2023	Mar. 21, 2023	Nov. 17, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 22, 2023	Sep. 25, 2023
Liquidity and Going Concern [Line Items]
Shares issued, shares					250,000
Negative working capital					$ 203,600,000
Cash and cash equivalents					3,921,000	$ 2,184,000
Loss from operations					(105,431,000)	(50,634,000)	$ (35,838,000)
Net cash used in operating activities					20,700,000
Accumulated deficit					(490,245,000)	$ (375,914,000)
Principal laon amount	$ 30,000,000
Aggregate Principle amount of issued debt		$ 25,000,000
Outstanding balance of revolving facility					$ 17,000,000
Offer and sell shares of Common Stock					160,084,250	141,348,856			474,683
Common stock, par value					$ 0.0001	$ 0.0001
Equity Purchase Agreement with Yorkville and B. Riley [Member]
Liquidity and Going Concern [Line Items]
Convertible Debenture principal Amount			$ 25,000,000
Convertible Debenture					$ 24,000,000
Aggregate Principle amount of issued debt					$ 25,000,000
A&R Yorkville Purchase Agreement
Liquidity and Going Concern [Line Items]
Aggregate Principle amount of issued debt		$ 15,000,000
Offer and sell shares of Common Stock					632,431
Right to sell maximum number of common stock shares				$ 500,000,000	$ 500,000,000
Common stock, par value				$ 0.0001
A&R Yorkville Purchase Agreement \| Common Stock [Member]
Liquidity and Going Concern [Line Items]
Shares issued, shares					250,000
ATM Sales Agreement
Liquidity and Going Concern [Line Items]
Offer and sell shares of Common Stock					0
Maximum [Member] \| ATM Sales Agreement \| Common Stock [Member]
Liquidity and Going Concern [Line Items]
Common stock issuable, value								$ 170,000,000
Value of stock sold for termination of offering								$ 170,000,000

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Product Development Agreement

In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with Itochu and Oishi Koseido Co., Ltd. (“Oishi,” and together with Itochu, the “Developers”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and

SP-103

(the “Products”), for Scilex Pharma. The Developers initially developed and have intellectual property rights relating to the Products. Pursuant to the Product Development Agreement, Scilex Pharma acquired an exclusive right to develop and commercialize the Products worldwide except for Japan. The Developers are responsible for sourcing and supplying lidocaine for development and commercialization purposes.

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 the years ended December 31, 2023 and 2022, Scilex Pharma made royalty payments in the amount of $8.3 million and $2.3 million. As of December 31, 2023 and 2022, Scilex Pharma had ending balances of accrued royalty payables of $2.4 million and $2.2 million, respectively. Total royalty expense recorded within cost of revenue was $8.5 million and $4.5 million for the years ended December 31, 2023 and 2022, respectively. Net profits are defined as net sales, less cost of goods and marketing expenses. Net sales are defined as total gross sales of any Product, less all applicable deductions, to the extent accrued, paid or allowed in the ordinary course of business with respect to the sale of such Product, and to the extent that they are in accordance with GAAP. If Scilex Pharma were to sublicense the licensed technologies, the Developers will receive the same proportion of any sublicensing fees received therefrom. The Product Development Agreement will continue in full force and effect until October 2, 2028, the date that is ten years from the date of the first commercial sale of ZTlido. The Product Development Agreement will renew automatically for subsequent successive

one-year

renewal periods unless Scilex Pharma or the Developers terminate it upon

6-month

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 Supply Agreement contains standard terms regarding term, termination, payment, product quality and supply. In addition, the agreement provides additional terms regarding the calculation and amount of marketing expenses that may be deducted from net sales for purposes of determining the amount of net profit under the Product Development Agreement.

Litigation

In the normal course of business, the Company may be named as a defendant in one or more lawsuits. 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.

From time to time the Company may become involved in various legal proceedings, including those that may arise in the ordinary course of business.

Sanofi-Aventis U.S. LLC and Hisamitsu America, Inc. Litigation

On February 23, 2021, the Company filed an action (the “Action”) in the U.S. District Court for the Northern District of California against Sanofi-Aventis U.S. LLC and Hisamitsu America, Inc., two manufacturers of

over-the-counter

(“OTC”) lidocaine patch products, alleging, among other things, false and deceptive advertising and unfair competition under the Lanham Act and California state laws by those companies regarding their respective OTC patch products. This lawsuit sought, among other relief, damages and an injunction enjoining the defendants from continuing to make false or misleading statements of fact about their respective OTC lidocaine patch products. The defendants filed motions to dismiss, which narrowed slightly the Company’s claims, but which motions the court largely rejected. Discovery was proceeding. On January 26 and February 2, 2024, Scilex Pharma entered into two separate settlement agreements and mutual releases with the two manufacturers that resolve the Action. The terms of those agreements are confidential.

Former Employee Action

On March 12, 2021, Scilex Pharma and Sorrento (the “Plaintiffs”) filed an action (the “Former Employee Action”) in the Delaware Court of Chancery against the former President of Scilex Pharma, Anthony Mack, and Virpax Pharmaceuticals, Inc. (“Virpax”, together with Mr. Mack, the “Defendants”), a company founded and then headed by Mr. Mack, alleging, among other things, breach by Mr. Mack of a restrictive covenant agreement with Sorrento related to his sale of his Scilex Pharma stock to Sorrento, tortious interference with that agreement

by Virpax, breach of Mr. Mack’s fiduciary duties to Scilex Pharma, aiding and abetting of that breach by Virpax, and misappropriation of Scilex Pharma’s trade secrets by Mr. Mack and Virpax. Such lawsuit sought, among other relief, damages and various forms of injunctive relief. The case was tried from September 12, 2022 to September 14, 2022. On September 1, 2023, the court found in favor of the Plaintiffs on all but three counts deemed to have been waived. In its

95-page

opinion, the court instructed the parties to submit supplemental briefing on the appropriate remedy to implement its rulings. On October 18, 2023, the Plaintiffs submitted a supplemental brief on remedies. On November 29, 2023, Defendants submitted a supplemental brief on remedies. On December 21, 2023, the Plaintiffs submitted a supplemental reply brief on remedies. On February 26, 2024, the Company and Virpax entered into a term sheet regarding a mutual release and settlement agreement, pursuant to which the parties have agreed to resolve the ongoing disputes. On February 29, 2024, the Company and Virpax entered into a definitive settlement agreement, which provides for, among other things, that Virpax will be obligated to make the following payments to the Company to settle the Former Employee Action: (i) $3.5 million (the “Initial Payment”) by two business days after the Effective Date (as defined therein); (ii) $2.5 million by July 1, 2024 and (iii) to the extent any of the following drug candidates are ever sold, royalty payments of (a) 6% of annual Net Sales (as defined therein) of Epoladerm; (b) 6% of annual Net Sales of Probudur and (c) 6% of annual Net Sales of Envelta during the Royalty Term (as defined therein). The Company and Virpax provide mutual releases of all claims that exist as of the Effective Date, whether known or unknown, arising from any allegations set forth in the Former Employee Action. Plaintiffs’ release relates to claims against Virpax only, which does not affect its claims against Mr. Mack. Plaintiffs have not released Mr. Mack, and litigation against him remains ongoing. Plaintiffs’ release as to Virpax is conditioned upon Virpax’s Initial Payment.

ZTlido Patent Litigation

On June 22, 2022, the Company filed a complaint against Aveva Drug Delivery Systems, Inc. (“Aveva”), Apotex Corp., and Apotex, Inc. (together, “Apotex”) in the U.S. District Court for the Southern District of Florida (the “ZTlido Patent Litigation”) alleging infringement of certain Orange Book listed patents covering ZTlido (the “ZTlido Patents”). The ZTlido Patent Litigation was initiated following the submission by Apotex, in accordance with the procedures set out in the Hatch-Waxman Act, of an abbreviated new drug application (“ANDA”). Apotex’s ANDA seeks approval to market a generic version of ZTlido prior to the expiration of the ZTlido Patents and alleges that the ZTlido Patents are invalid, unenforceable, and/or not infringed. The Company is seeking, among other relief, an order that the effective date of any FDA approval of Apotex’s ANDA be no earlier than the expiration of the asserted patents listed in the Orange Book, the latest of which expires on May 10, 2031, and such further and other relief as the court may deem appropriate. Apotex is subject to a

30-month

stay preventing it from selling a generic version of ZTlido during that time. The stay should expire no earlier than November 11, 2024. The two Apotex entities were recently dismissed from the litigation without prejudice, as they no longer have an interest in the generic product that Aveva seeks to market. Trial in the ZTlido Patent Litigation has been scheduled for July 8, 2024. The Company cannot make any predictions about the final outcome of this matter or the timing thereof.

GLOPERBA Patent Litigation

On November 6, 2023, Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”) filed a complaint against the Company in the U.S. District Court for the District of Delaware (the “GLOPERBA Patent Litigation”) alleging that the Company’s filing with the FDA of an application for approval of a proposed revision to the product label for its GLOPERBA product infringed certain Orange Book listed patents covering Takeda’s colchicine product, Colcrys

(the “Colcrys Patents”). Takeda is seeking an order that the effective date of any FDA approval of the Company’s labeling revision be no earlier than the expiration date of the asserted patents listed in the Orange Book, and such further and other relief as the court may deem appropriate. The filing of the complaint subjects the Company to a

30-month

stay, preventing it from selling GLOPERBA under a revised label (but not from selling GLOPERBA under its current label) during that time. The Company cannot make any predictions about the final outcome of this matter or the timing thereof. The stay could last as long as until May 6, 2026, unless the

litigation is resolved before that time. As of December 31, 2023, the Company accrued $0.5 million with respect to the GLOPERBA Patent Litigation.

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, 2023, the Company’s leases have remaining lease terms of approximately 0.7 to 3.8 years. The terms of the Company’s leases, ranging from 3 to 5 years, include extension options that were not reasonably certain to be exercised. Many of the Company’s leases are subject to variable lease payments. Variable lease payments are recognized in the period in which the obligations for those payments are incurred, are not included in the measurement of the ROU assets or lease liabilities, and are immaterial. Additionally, the Company subleases certain properties to third parties. Sublease income is recognized on a straight-line basis and is immaterial.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. 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, 2023, the Company has no

finance leases

In April 2023, the Company modified the lease term for its principal executive offices located in Palo Alto, California. The modification extended the lease term for an additional three years, with the lease term expiring in September 2027. As a result of the modification, the Company recognized additional ROU assets and corresponding lease liabilities of $2.5 million.

Lease expense was $1.1 million, $0.5 million and $0.6 million for the years ended December 31, 2023, 2022 and 2021, respectively, and was primarily comprised of operating lease costs. The lease expense also included variable lease costs and sublease income, which were immaterial for the periods presented.

Supplemental quantitative information related to leases includes the following:


	Year Ended December 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	(1,021	)	$	(746	)
Weighted average remaining lease term in years — operating leases		3.6			1.8
Weighted average discount rate — operating leases		11.1	%		11.8	%

Approximate future minimum lease payments under operating leases were as follows (in thousands):


Year Ended December 31,	Amount
2024	$	1,042
2025		916
2026		944
2027		724

Total lease payments		3,626
Less imputed interest		(630	)

Total lease liabilities		2,996
Less current portion of lease liability		759

Lease liability, net of current portion	$	2,237

Income Taxes (Additional Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Line Items]
Deferred tax assets, valuation allowance	$ 96,776	$ 67,543
Indefinite net federal operating loss	265,900
Research and development income tax credits	3,400
Income tax expense, interest and penalties	0	0	$ 0
Liabilities for uncertain tax positions	0
Unrecognized tax benefits that would impact effective tax rate	1,100	$ 400	$ 400
Research and Development Income Tax Credits [Member]
Income Tax Disclosure [Line Items]
Tax credit, not subject to expire	1,900
Federal [Member]
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 278,700
Operating loss carryforwards, expiration year	2035
Income tax credits, expiration year	2035
State [Member]
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 114,000
Operating loss carryforwards, expiration year	2034

Condensed Consolidated Statements of Stockholders' (Deficit) / Equity - USD ($) $ in Thousands	Total	Preferred Stock Member	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Balance at Dec. 31, 2020	$ (141,683)		$ 13	$ 122,430	$ (264,126)
Balance (in shares) at Dec. 31, 2020			132,858,000
Stock-based compensation	5,822			5,822
Adjustment to shares issued in Semnur Acquisition	409			409
Net income (loss)	(88,424)				(88,424)
Balance at Dec. 31, 2021	(223,876)		$ 13	128,661	(352,550)
Balance (in shares) at Dec. 31, 2021			132,858,000
Shares issued pursuant to the terms of the Debt Exchange Agreement, (In shares)		29,057,000	2,906,000
Shares issued pursuant to the terms of the Debt Exchange Agreement	289,733	$ 3		289,730
Shares issued as a result of the Business Combination, net of transaction activities, Amount	(8,706)		$ 1	(8,707)
Shares issued as a result of the Business Combination, net of transaction activities, Share			5,133,000
Shares issued to Yorkville pursuant to Yorkville Purchase Agreement, Amount	1,238			1,238
Shares issued to Yorkville pursuant to Yorkville Purchase Agreement, Share			250,000
Stock-based compensation	5,280			5,280
Stock options exercised	96			96
Stock options exercised (in shares)			202,000
Aardvark SP-104 license transfer from Sorrento, net of discount	(4,127)			(4,127)
Aardvark SP-104 license transfer from Sorrento	(35)			(35)
Net income (loss)	(23,364)				(23,364)
Balance at Dec. 31, 2022	36,239	$ 3	$ 14	412,136	(375,914)
Balance (in shares) at Dec. 31, 2022		29,057,000	141,349,000
Shares issued under Standby Equity Purchase Agreements	34,257		$ 1	34,256
Shares issued under Standby Equity Purchase Agreements (in shares)			13,218,000
Stock-based compensation	14,596			14,596
Stock options exercised	$ 614			614
Stock options exercised (in shares)	365		365,000
Issuance of penny warrants	$ 10,401			10,401
Conversion of convertible debentures into common stock	7,735			7,735
Conversion of convertible debentures into common stock, (in shares)			632,000
Retainer shares issued	1		$ 1	0
Retainer shares issued (in shares)			4,000,000
Issuance of common stock upon warrants exercise	521			521
Issuance of common stock upon warrants exercise, (in shares)			45,000
Disbursement of funds to Sorrento Amount	(20,000)			(20,000)
Issuance of common stock in connection with Settlement Agreement	750			750
Issuance of common stock in connection with Settlement Agreement, (in shares)			475,000
Repurchase of Treasury Stock, Preferred Stock, and warrants	(143,721)	$ (3)		(53,196)		$ (90,522)
Repurchase of Treasury Stock, Preferred Stock, and warrants, (in shares)						(60,069,000)
Net income (loss)	(114,331)				(114,331)
Balance at Dec. 31, 2023	$ (172,938)	$ 0	$ 16	$ 407,813	$ (490,245)	$ (90,522)
Balance (in shares) at Dec. 31, 2023		29,057,000	160,084,000			(60,069,000)

Income Taxes - Schedule of Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Beginning Balance	$ 408	$ 408	$ 406
Increase related to prior year tax positions	536	0	2
Increases related to current year tax positions	127	0	0
Ending Balance	$ 1,071	$ 408	$ 408

Balance Sheet Components (Additional Information) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 40,000	$ 40,000	$ 39,000

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of the reconciliation of basic and diluted loss per share

The following table sets forth the reconciliation of basic and diluted loss per share for the years ended December 31, 2023, 2022 and 2021 (in thousands except per share data):


	Year Ended December 31,
	2023			2022			2021
Net loss	$	(114,331	)	$	(23,364	)	$	(88,424	)
Premium on redemption of Preferred Stock		(52,645	)		—			—

Net loss for basic and diluted loss per share available to common stockholders	$	(166,976	)	$	(23,364	)	$	(88,424	)

Weighted average number of shares outstanding - basic		130,298			134,226			132,858
Effect of dilutive securities		—			—			—

Weighted average number of shares and assumed conversions - diluted		130,298			134,226			132,858
Loss per share
Basic and diluted	$	(1.28	)	$	(0.17	)	$	(0.67	)

Schedule of potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share


	December 31, 2023		December 31, 2022		December 31, 2021
Stock options		33,123,798		16,939,093		18,967,724
Public Warrants		6,854,309		6,899,988		—
Private Warrants		3,613,383		4,104,000		—
Retainer Shares		4,000,000		—		—
Shares Issuable pursuant to ESPP		29,806		—		—
Convertible Debentures		546,921		—		—

Total		48,168,217		27,943,081		18,967,724

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Leases Supplemental Quantitative Information

Supplemental quantitative information related to leases includes the following:


	Year Ended December 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	(1,021	)	$	(746	)
Weighted average remaining lease term in years — operating leases		3.6			1.8
Weighted average discount rate — operating leases		11.1	%		11.8	%

Schedule of Lease Maturities of Lease Liabilities

Approximate future minimum lease payments under operating leases were as follows (in thousands):


Year Ended December 31,	Amount
2024	$	1,042
2025		916
2026		944
2027		724

Total lease payments		3,626
Less imputed interest		(630	)

Total lease liabilities		2,996
Less current portion of lease liability		759

Lease liability, net of current portion	$	2,237

Liquidity and Going Concern	12 Months Ended
Liquidity and Going Concern	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity and Going Concern	2. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management has assessed the Company’s ability to continue as a going concern for at least one year after the issuance date of the accompanying consolidated financial statements. On November 17, 2022, the Company entered into a standby equity purchase agreement (the “Original Purchase Agreement”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”). On February 8, 2023, the Company entered into an amended and restated standby equity purchase agreement with Yorkville (the “A&R Yorkville Purchase Agreement”), amending, restating and superseding the Original Purchase Agreement. On January 8, 2023, the Company entered into a standby equity purchase agreement (the “B. Riley Purchase Agreement” and together with A&R Yorkville Purchase Agreement, the “Standby Equity Purchase Agreements”) with B. Riley Principal Capital II, LLC (“B. Riley”). Pursuant to each of the Standby Equity Purchase Agreements, the Company has the right, but not the obligation, to sell to each of Yorkville and B. Riley up to $500.0 million of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at its request any time during the 36 months following the date on which the registration statement related to each such purchase agreement was initially declared effective by the SEC, subject to certain conditions, which are discussed further in Note 9. On, and effective as of, February 16, 2024, the Company and B. Riley mutually agreed to terminate the B. Riley Purchase Agreement. As consideration for Yorkville’s and B. Riley’s respective commitment to purchase shares of Common Stock at the Company’s direction, the Company issued 250,000 commitment shares to each of Yorkville (the “Yorkville Commitment Shares”) and B. Riley (the “B. Riley Commitment Shares”). On March 21, 2023, the Company entered into a securities purchase agreement with Yorkville (the “Yorkville SPA”), pursuant to which the Company would issue and sell to Yorkville convertible debentures in an aggregate principal amount of up to $25.0 million (the “Convertible Debentures”). As of December 31, 2023, Convertible Debentures in the principal amount of $25.0 million (for net cash proceeds of $24.0 million) were issued and sold pursuant to the Yorkville SPA, which is discussed further in Note 7. On June 27, 2023, Scilex Pharma entered into a Credit and Security Agreement (the “eCapital Credit Agreement”) with eCapital Healthcare Corp. (the “Lender”), pursuant to which the Lender shall make available loans (the “Revolving Facility”) in an aggregate principal amount of up to $30.0 million (the “Facility Cap”). The proceeds of the Revolving Facility will be used for (i) transaction fees incurred in connection with the eCapital Credit Agreement, (ii) working capital needs of Scilex Pharma and (iii) other uses not prohibited under the eCapital Credit Agreement. As of December 31, 2023, the Company has an outstanding balance of $17.0 million under the Revolving Facility. See Note 7 for additional discussion of the terms of the eCapital Credit Agreement. On December 22, 2023, the Company entered into a Sales Agreement (the “ATM Sales Agreement”) with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC (the “Sales Agents”). Pursuant to the ATM Sales Agreement, the Company may offer and sell (the “Offering”) shares of Common Stock up to $170,000,000 (the “ATM Shares”), through or to the Sales Agents as part of the Offering. The Company has no obligation to sell any shares of Common Stock under the ATM Sales Agreement and may suspend offers thereunder at any time. The Offering will terminate upon (i) the election of the Sales Agents upon the occurrence of certain adverse events, (ii) three business days’ advance notice from the Company to the Sales Agents or a Sales Agent to the Company, or (iii) the sale of all $170,000,000 of shares of Common Stock thereunder. As of December 31, 2023, no sales of Common Stock had been made under the ATM Sales Agreement. As of December 31, 2023, the Company’s negative working capital was $203.6 million, including cash and cash equivalents of approximately $3.9 million. During the year ended December 31, 2023, the Company had operating losses of $105.4 million and cash flows used for operations of $20.7 million. The Company had an accumulated deficit of $490.2 million as of December 31, 2023. The Company has plans to obtain additional resources to fund its currently planned operations and expenditures for at least twelve months from the issuance of these consolidated financial statements through a combination of equity offerings, debt financings, collaborations, government contracts or other strategic transactions. The Company’s plans are also dependent upon the success of future sales of ZTlido and ELYXYB, among which ELYXYB is still in the early stages of commercialization, and the future commercialization of GLOPERBA. Although the Company believes such plans, if executed, should provide the Company with financing to meet its needs, successful completion of such plans is dependent on factors outside the Company’s control. As a result, management has concluded that the aforementioned conditions, among other things, raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are issued.

Net Loss Per Share - Schedule of the reconciliation of basic and diluted loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Earnings Per Share [Abstract]
Net loss	$ (114,331)	$ (23,364)	$ (88,424)
Premium on redemption of Preferred Stock	(52,645)	0	0
Net loss for basic and diluted loss per share available to common stockholders	$ (166,976)	$ (23,364)	$ (88,424)
Weighted average number of shares outstanding - basic	130,298,000	134,226,000	132,858,000
Effect of dilutive securities	0	0	0
Weighted average number of shares and assumed conversions - diluted	130,298,000	134,226,000	132,858,000
Net loss per share attributable to common stockholders - basic	$ (1.28)	$ (0.17)	$ (0.67)
Net loss per share attributable to common stockholders - diluted	$ (1.28)	$ (0.17)	$ (0.67)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

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+ Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Benefit for Income Taxes

The components of the provision expense (benefit) were as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	Year Ended December 31,
	2023			2022			2021
Current income tax expense (benefit):
Federal	$	—		$	—		$	—
State		13			4			5

Total current		13			4			5
Deferred income tax expense (benefit):
Federal		(16,514	)		(10,396	)		(12,981	)
State		(11,247	)		(1,851	)		(2,472	)

Total deferred		(27,761	)		(12,247	)		(15,453	)
Changes in tax rate		(1,471	)		1,347			31
Changes in valuation allowance		29,232			10,900			15,422

Total income tax expense from continuing operations	$	13		$	4		$	5

Schedule of Deferred Tax Liabilities and Related Valuation Allowance

The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2023 and 2022 (in thousands):


	Year Ended December 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	71,434		$	48,984
Debt related interest		16,898			15,272
Capitalized research and development		4,936			2,014
Tax credit carryforwards		3,960			1,630
Stock based compensation		525			1,602
Accrued expense and reserves		1,584			568
Operating lease liabilities		774			315
Other		159			77

Total deferred tax assets		100,270			70,462
Less valuation allowance		(96,776	)		(67,543	)

Total deferred tax assets		3,494			2,919

Deferred tax liabilities:
Intangible assets		(2,734	)		(2,666	)
Operating lease right-of-use assets		(760	)		(253	)

Total deferred tax liabilities		(3,494	)		(2,919	)

Net deferred tax liabilities	$	—		$	—

Schedule of Effective Income Tax Rate Reconciliation


	Year Ended December 31,
	2023			2022			2021
Income tax benefit at federal statutory rate	$	(24,007	)	$	(4,905	)	$	(19,150	)
Valuation allowance		29,232			10,900			15,422
Debt discount and interest limitation		—			(9,293	)		8,954
Compensation expense		3,798			2,469			224
Acquisition related charges		260			992			75
Prior year true-up and carryback		(5,079	)		(713	)		(3,968	)
State, net of federal tax benefit		(5,127	)		(174	)		(2,545	)
Change in fair value of Convertible Debentures		1,752			—			—
Change in tax rates		(1,471	)		—			—
Other		655			728			993

Income tax expense	$	13		$	4		$	5

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	2023		2022		2021
Beginning balance	$	408	$	408	$	406
Increase related to prior year tax positions		536		—		2
Increases related to current year tax positions		127		—		—

Ending balance	$	1,071	$	408	$	408

Nature of Operations and Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Segments

non-opioid

Use of Estimates

Customer Concentration Risk

Fair Value Measurements

and for the Oramed Note (as defined below) in the principal amount of $101.9 million that was issued in September 2023 (see Note 7 titled “

Debt”

Level 1 -

Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 -

Level 3 -

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Cash, Cash Equivalents and Restricted Cash


	December 31, 2023		December 31, 2022
Cash and cash equivalents	$	3,921	$	2,184
Restricted cash		808		—

Total cash, cash equivalents, and restricted cash	$	4,729	$	2,184

Accounts Receivable, Net

Inventory

The Company determines inventory cost on a

first-in,

first-out

on-hand

pre-launch

inventory costs prior to regulatory approval. As of December 31, 2023 and 2022, the Company’s inventory was primarily comprised of finished goods.

Property and Equipment, Net

Acquisitions

The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including

in-process

up-front

Goodwill and Other Long-Lived Assets

non-generic

Contingent Consideration

Public Warrants and Private Placement Warrants

Public Warrants and Private Warrants

Subsequent to the Business Combination, the Public Warrants were accounted for as equity per FASB ASC Subtopic

No. 815-40,

Contracts on an Entity’s Own Equity. Warrants classified as equity are recorded at their issuance cost and are not subject to remeasurement at each subsequent balance sheet date.

Subsequent to the Business Combination, the Private Warrants were accounted for as liabilities per ASC Subtopic

815-40.

The Private Warrants are not considered indexed to the Company’s stock per ASC Subtopic

815-40

as the fair value calculation applicable upon a cashless exercise of a Private Warrant changes based upon the holder of the instrument, which is not an input to a valuation model for a

fixed-for-fixed

date, with fair value changes recognized in the statement of operations. The Company estimates the value of these warrants using a Black-Scholes option pricing formula.

Debt

Convertible Debentures and the Oramed Note

The Company has elected the fair value option to account for the Convertible Debentures (as defined in Note 2 “

Liquidity and Going Concern

” below) that were issued in March and April 2023, as discussed further in Note 7. The Company has also elected the fair value option to account for the Oramed Note (as defined in Note 4 “

Fair Value Measurements

Derivative Liabilities

Research and Development Costs

Income Taxes

740-10,

will be realized. As of December 31, 2023 and 2022, the Company maintained a full valuation allowance against its deferred tax assets.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease

right-of-use

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.

Rebates and Chargebacks

Prompt Payment Discounts

Service Fees

Product Returns

Co-Payment

Assistance

Patients who have commercial insurance or pay cash and meet certain eligibility requirements may receive

co-

payment assistance. The Company accrues for

co-payment

assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators.

Stock-Based Compensation

non-employee’s

vesting period. The Company accounts for forfeitures as incurred.

Treasury Stock

The Company uses the cost method to account for repurchases of its stock. In the computation of net (loss) income per share, treasury shares are not included as part of the outstanding shares.

Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the

two-class

method required for participating securities. Net loss per share has been retrospectively adjusted for all periods presented prior to the Business Combination.

Under the

two-class

As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.

Recently Adopted Accounting Pronouncements

In October 2021, FASB issued Accounting Standards Updates (“ASU”) 2021-08,

Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

(“ASU 2021-08”)

, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with ASC Topic 606. ASU

2021-08

is effective for fiscal years beginning after December 15, 2022. ASU

2021-08

In June 2022, the FASB issued ASU

2022-03,

Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU

2022-03”),

2022-03

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	14. Subsequent Events Termination of B. Riley Purchase Agreement On February 16, 2024, the Company and B. Riley mutually agreed to terminate the B. Riley Purchase Agreement. The termination is effective as of February 16, 2024. Underwritten Offering On February 29, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Rodman & Renshaw LLC and StockBlock Securities LLC, as the representatives (the “Representatives”) of the underwriters named in Schedule A (the “Underwriters”). Pursuant to the Underwriting Agreement, the Company agreed to sell, in an underwritten offering (the “Bought Deal Offering”), 5,882,353 shares (the “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 “Firm Warrants”). Pursuant to the Underwriting Agreement, the Company also granted the Underwriters an option for a period of 30 days from the date of the Underwriting Agreement to purchase up to 882,352 additional shares of Common Stock (the “Optional Shares”, and together with the Firm Shares, the “Shares”) and/or common warrants to purchase up to 882,352 shares of Common Stock (the “Optional Warrants”, and together with the Firm Warrants, the “Common Warrants”) that may be purchased by the Underwriters, at a price per Optional Share of $1.5548 and a price per Optional Warrant of $0.0092, which amounts reflect the public offering price of $1.69 per Optional Share and $0.01 per Optional Warrant, less underwriting discounts and commissions, as applicable (the “Underwriters’ Option”). Each Firm Share was sold together with a Firm Warrant at a combined public offering price of $1.70. The combined price per Firm Share and accompanying 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. Subject to certain ownership limitations, the Common Warrants are exercisable immediately from the date of issuance, will expire on the five-year anniversary of the date of issuance and have an exercise price of $1.70 per share. The exercise price of the Common Warrants is subject to certain adjustments, including (but not limited to) for stock dividends, stock splits, combinations and reclassifications of the Common Stock. In connection with the Bought Deal Offering, the Company agreed, pursuant to the Underwriting Agreement, to issue the Representatives warrants (the “Representative Warrants”, and together with the Common Warrants, the “Warrants”) to purchase up to an aggregate of 470,588 shares of Common Stock (which represents 8.0% of the aggregate number of Firm Shares sold in the Bought Deal Offering), or up to an aggregate of 541,176 shares of Common Stock if the Underwriters exercise the Underwriters’ Option in full. The Representative Warrants are immediately exercisable and have the same terms as the Common Warrants described above, except that the exercise price of the Representative Warrants is $2.125 per share, which represents 125% of the combined public offering price per Firm Share and accompanying Firm Warrant. The Company also agreed to pay certain expenses of the Representatives in connection with the Bought Deal Offering, including their legal fees and out-of-pocket expenses up to $200,000 and up to $15,950 for clearing expenses. The Shares, the Warrants and the shares of Common Stock issuable upon exercise of the Warrants were offered and sold by us pursuant to an effective shelf registration statement on Form S-3, which was originally filed with the Securities and Exchange Commission (the “SEC”) on December 22, 2023, as amended, and was declared effective on January 11, 2024 (File No. 333-276245), a base prospectus dated January 11, 2024, and a final prospectus supplement dated February 29, 2024.

Cover Page	12 Months Ended
Cover Page	Dec. 31, 2023
Entity Addresses [Line Items]
Document Type	POS AM
Amendment Flag	true
Entity Registrant Name	Scilex Holding Company
Entity Filer Category	Non-accelerated Filer
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	960 San Antonio Road
Entity Address, City or Town	Palo Alto
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94303
Entity Tax Identification Number	92-1062542
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Primary SIC Number	2836
Entity Central Index Key	0001820190
City Area Code	650
Local Phone Number	516-4310
Amendment Description	Post-Effective Amendment No. 1
Business Contact [Member]
Entity Addresses [Line Items]
Entity Address, Address Line One	960 San Antonio Road
Entity Address, City or Town	Palo Alto
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94303
City Area Code	650
Local Phone Number	516-4310
Contact Personnel Name	Jaisim Shah

Fair Value Measurements (Details) - Schedule of The Inputs Used In Valuing The Derivative Warrant Liabilities - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of derivative component of the obligation is initially valued and classified as a derivative liability [Abstract]
Equity Value	$ 2.04	$ 3.99
Exercise price	$ 11.5	$ 11.5
Term, in years	3 years 10 months 9 days	4 years 10 months 9 days
Volatility	76.00%	35.00%
Risk-free rate	3.90%	3.94%
Dividend yield	0.00%	0.00%
Call option value	$ 0.42	$ 0.3

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	45,000,000	45,000,000
Preferred stock, shares issued	29,057,097	29,057,097
Preferred stock, shares outstanding	29,057,097	29,057,097
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	740,000,000	740,000,000
Common stock, shares issued	160,084,250	141,348,856
Common stock, shares outstanding	100,015,665	141,348,856
Treasury stock shares	60,068,585	0

Goodwill and Intangible Assets - Summary of identifiable intangible assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 60,781	$ 60,781
Accumulated amortization	24,296	20,190
Intangibles, net	36,485	40,591
Patent rights
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	32,630	32,630
Accumulated amortization	15,591	13,415
Intangibles, net	17,039	19,215
Acquired technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	21,940	21,940
Accumulated amortization	7,679	6,216
Intangibles, net	14,261	15,724
Acquired licenses
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	5,711	5,711
Accumulated amortization	551	184
Intangibles, net	5,160	5,527
Assembled workforce
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	500	500
Accumulated amortization	475	375
Intangibles, net	$ 25	$ 125

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Net revenue	$ 46,743	$ 38,034	$ 31,317
Operating costs and expenses:
Cost of revenue	15,681	10,797	3,634
Research and development	12,746	9,054	9,201
Selling, general and administrative	119,641	64,895	50,582
Intangible amortization	4,106	3,922	3,738
Total operating costs and expenses	152,174	88,668	67,155
Loss from operations	(105,431)	(50,634)	(35,838)
Other (income) expense:
Loss (gain) on derivative liability	512	(8,310)	300
Change in fair value of debt and liability instruments	7,189	0	0
(Gain) loss on debt extinguishment, net	0	(28,634)	12,463
Scilex Pharma Notes principal increase	0	0	28,000
Interest expense, net	1,068	9,604	11,764
Loss on foreign currency exchange	118	66	54
Total other (income) expense	8,887	(27,274)	52,581
Loss before income taxes	(114,318)	(23,360)	(88,419)
Income tax expense	13	4	5
Net loss	$ (114,331)	$ (23,364)	$ (88,424)
Earnings Per Share [Abstract]
Net loss per share attributable to common stockholders - basic	$ (1.28)	$ (0.17)	$ (0.67)
Net loss per share attributable to common stockholders - diluted	$ (1.28)	$ (0.17)	$ (0.67)
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Weighted average number of shares during the period-basic	130,298	134,226	132,858
Weighted average number of shares during the period -diluted	130,298	134,226	132,858

Stock Incentive and Employee Benefit Plans - Schedule of Stock Options Outstanding Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Options Outstanding, Beginning Balance	16,939
Options Outstanding, Granted	17,610
Options Outstanding, Exercised	(365)
Options Outstanding, Forfeited/Cancelled	(1,060)
Options Outstanding, Ending Balance	33,124	16,939
Options Outstanding, Exercisable	18,990
Weighted Average Exercise Price, Outstanding, Beginning Balance	$ 1.68
Weighted Average Exercise Price, Granted	7.02
Weighted Average Exercise Price, Exercised	1.68
Weighted Average Exercise Price, Forfeited/Cancelled	6.36
Weighted Average Exercise Price, Outstanding, Ending Balance	4.38	$ 1.68
Weighted Average Exercise Price, Exercisable	$ 2.78
Outstanding, Weighted-average Remaining Contractual Life, (in Years)	7 years 6 months	7 years
Exercisable, Weighted-average Remaining Contractual Life, (in Years)	6 years 3 months 18 days
Aggregate Intrinsic Value, Outstanding	$ 7,459	$ 38,942
Aggregate Intrinsic Value, Exercisable	$ 5,600

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

As of December 31, 2023 and 2022, the Company had recorded goodwill of $13.5 million. No goodwill impairment was recognized for the years ended December 31, 2023, 2022 and 2021.

Amortization of the intangible assets that have finite useful lives is generally recorded on a straight-line basis over their useful lives. A summary of the Company’s identifiable intangible assets as of December 31, 2023 and December 31, 2022 is as follows (in thousands):


	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	15,591	$	17,039
Acquired technology		21,940		7,679		14,261
Acquired licenses		5,711		551		5,160
Assembled workforce		500		475		25

Total intangible assets	$	60,781	$	24,296	$	36,485


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	13,415	$	19,215
Acquired technology		21,940		6,216		15,724
Acquired licenses		5,711		184		5,527
Assembled workforce		500		375		125

Total intangible assets	$	60,781	$	20,190	$	40,591

As of December 31, 2023, the weighted average remaining life for identifiable intangible assets was 9.4 years. Aggregate amortization expense was $4.1 million, $3.9 million and $3.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. Patent rights and acquired technology are amortized over a

15-year

period. Assembled workforce is amortized over a

5-year

period.

Estimated future amortization expense related to intangible assets as of December 31, 2023 is as follows (in thousands):


	Amount
2024	$	4,031
2025		4,006
2026		4,006
2027		4,006
2028		4,006
Thereafter		16,430

Total	$	36,485

Stock Incentive and Employee Benefit Plans (Additional Information) (Details) - USD ($)		1 Months Ended	12 Months Ended
	Feb. 13, 2023	Oct. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	May 04, 2023	Jan. 17, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of option outstanding to purchase common stock			33,124	16,939
Options granted weighted-average grant date fair value			$ 3.24
Total intrinsic value of option exercise			$ 1,100,000	$ 300,000
Stock-based compensation expenses			14,596,000	5,280,000	$ 5,822,000
Unrecognized compensation cost related to unvested stock option grants			42,400,000
Employee benefit plan contributions by employer			500,000	$ 300,000	300,000
Stock issued for services, shares	4,000,000
Accrued legal fees			$ 0
Weighted average period over grant			3 years 1 month 6 days
Common Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock Based Compensation expense cash			$ 750,000
Non Employee Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Cash compensation			$ 107,424
Number of common stock shares forfeited			311,735
Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized under the plan						30,276,666
2022 Equity Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of option outstanding to purchase common stock			33,123,798
Common stock shares reserved for future issuance				14,622,712
Stock-based compensation expenses			$ 14,600,000	$ 5,300,000	$ 5,800,000
Number of shares authorized under the plan						10,000,000
2022 Equity Incentive Plan \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock shares reserved for future issuance				20,276,666
Number of shares authorized under the plan						30,276,666
2022 Equity Incentive Plan \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized under the plan						20,276,666
2023 Inducement Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares available for grant							1,400,000
2022 Employee Stock Purchase Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Discount from Market Price, Purchase Date		85.00%
Common stock shares reserved for future issuance			1,462,271
Stock-based compensation expenses			$ 21,000	$ 0
2022 Employee Stock Purchase Plan \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock shares reserved for future issuance			2,875,759

Stock Incentive and Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock Incentive and Employee Benefit Plans

10. Stock Incentive and Employee Benefit Plan

2017 Scilex Pharmaceuticals Inc. 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.

Scilex Holding Company 2019 Stock Option Plan

In May 2019, the Board of Directors of the Company adopted the Scilex Holding Company 2019 Stock Option Plan (the “2019 Stock Option Plan”), which subsequently was amended in December 2020. The 2019 Stock Option Plan was terminated at the closing of the Business Combination, and no further awards have been granted under the 2019 Stock Option Plan thereafter. However, the 2019 Stock Option Plan will continue to govern outstanding awards granted thereunder.

Scilex Holding Company 2022 Equity Incentive Plan

In October 2022, the Board of Directors of the Company adopted the Scilex Holding Company 2022 Equity Incentive Plan (the “Equity Incentive Plan”). The total number of shares of Common Stock for which incentive stock options (“ISOs”) may be granted under the Equity Incentive Plan is not to exceed 20,276,666 shares, which was increased from 14,622,712 as a result of the automatic annual increase on January 1, 2023 pursuant to the Equity Incentive Plan provisions.

On May 4, 2023, the Company’s stockholders approved the amendment to the Equity Incentive Plan to (i) increase the number of shares authorized for issuance thereunder by 10,000,000 shares from 20,276,666 shares to 30,276,666 shares, (ii) increase the number of shares authorized for issuance thereunder pursuant to the exercise of ISOs to 30,276,666 shares, and (iii) modify the commencement date of the automatic increase in the number of shares authorized for issuance thereunder pursuant to the exercise of ISOs to January 1, 2024.

As of December 31, 2023, options to purchase 33,123,798 shares of Common Stock were outstanding under all equity incentive plans.

The Company

recently determined that the aggregate value of all compensation granted or paid to each

non-employee

director for the fiscal year ending December 31, 2023 (when aggregated with any remaining compensation payable for the remainder of such fiscal year) would inadvertently exceed the $750,000 annual compensation limit for

non-employee

directors (the “Compensation Limit”) under the Equity Incentive Plan, as a result of the previously disclosed equity grants made thereunder to such

non-employee

directors in January 2023 (the “Awards”). As a result, the Company’s current

non-employee

directors, David Lemus and Dorman Followwill, and the Company’s former

non-employee

directors,

Tien-Li

Lee and Laura Hamill, each voluntarily agreed to forfeit (i) a number of shares of Common Stock subject to their Awards or (ii) a combination of shares of Common Stock subject to their Awards and cash compensation payable by the Company for such person’s service as a director for the remainder of 2023, in each case in an amount that would bring each such

non-employee

director’s aggregate compensation for the fiscal year ending December 31, 2023 below the Compensation Limit. The

non-employee

directors forfeited an aggregate of 311,735 shares of Common Stock and an aggregate of approximately $107,424 in cash compensation.

Scilex Holding Company 2023 Inducement Plan

On January 17, 2023, the compensation committee of the Board of Directors of the Company adopted the Scilex Holding Company 2023 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity-based awards in the form of

non-statutory

stock options, stock appreciation rights, restricted stock, restricted stock units, and other awards solely to prospective employees of the Company or an affiliate of the Company, provided that certain criteria are met. The initial maximum number of shares available for grant under the Inducement Plan is 1,400,000 shares of Common Stock (subject to adjustment for recapitalizations, stock splits, reorganizations and similar transactions). No awards were granted under the Inducement Plan during the year ended December 31, 2023.

The following table summarizes stock option activity during the year ended December 31, 2023 (shares in thousands):


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life, in years		Aggregate Intrinsic Value
Outstanding as of December 31, 2022		16,939		$	1.68		7.0	$	38,942
Granted		17,610		$	7.02
Exercised		(365	)	$	1.68
Forfeited/Cancelled		(1,060	)	$	6.36

Outstanding as of December 31, 2023		33,124		$	4.38		7.5	$	7,459

Exercisable as of December 31, 2023		18,990		$	2.78		6.3	$	5,600

Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Common Stock for the options that had exercise prices that were lower than the per share fair value of the Common Stock as of the measurement date of the intrinsic value. The weighted-average grant date fair value per share of stock options granted during the year ended December 31, 2023 was $3.24 per share. The total intrinsic values of options exercised during the years ended December 31, 2023, 2022, and 2021 were $1.1 million, $0.3 million, and nil, respectively.

Total stock-based compensation recorded within operating expenses was $14.6 million, $5.3 million and $5.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The total unrecognized compensation costs related to unvested employee and

non-employee

stock option grants as of December 31, 2023 were $42.4 million, which the Company expects to recognize over a weighted-average period of approximately 3.1 years.

Scilex Holding Company 2022 Employee Stock Purchase Plan

In October 2022, the Board of Directors of the Company adopted the Scilex Holding Company 2022 Employee Stock Purchase Plan (the “ESPP”). The purchase price of the Common Stock is equal to 85% of the lesser of the market value of such shares at the beginning of an offering period or the date of purchase. As of December 31, 2023, the total number of shares of Common Stock that may be issued under the ESPP shall not exceed 2,875,759, which was increased from 1,462,271 shares as a result of automatic annual increase on January 1, 2023.

Total stock-based compensation recorded as operating expense for the ESPP was $21.0 thousand and nil for the year ended December 31, 2023 and 2022, respectively.

Valuation Assumptions

The Company calculates the fair value of stock options and ESPP awards granted to employees and nonemployees using the Black-Scholes option-pricing method. The Black-Scholes option-pricing method requires the use of subjective assumptions.

The following assumptions were used in the Black-Scholes options pricing model to estimate stock-based compensation on the date of grant for stock options and ESPP:


		Year Ended December 31, 2023
Stock options:
Expected dividend yield		0.00%
Expected volatility		40.00% - 77.00%
Risk-free interest rate		3.59% - 4.74%
Term of options (in years)		6.25
Employee stock purchase plan:
Expected dividend yield		0.00%
Expected volatility		117.57%
Risk-free interest rate		5.33%
Expected life (in years)		0.50

Employee Benefit Plan

The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company made matching contributions to the 401(k) plan totaling $0.5 million, $0.3 million and $0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Retainer Shares

On February 13, 2023, the Company entered into a Stock Issuance Agreement (the “SIA”) with a law firm for the provision of legal services to the Company. Under the SIA, the Company issued 4,000,000 shares of Common Stock to the law firm (the “Retainer Shares”). The Retainer Shares are held by the law firm as collateral for the current and future outstanding legal fees due from the Company.

At the option of the law firm, the Retainer Shares may be sold and the net proceeds may be applied against the outstanding legal fees. The Retainer Shares not applied against the outstanding legal fees due will be returned to the Company.

As of December 31, 2023, it was not probable that any of the Retainer Shares would be applied against any outstanding legal fees.

Income Taxes - Schedule of Deferred Tax Liabilities and Related Valuation Allowance (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred Tax Assets, Net [Abstract]
Net operating loss carryforwards	$ 71,434	$ 48,984
Debt related interest	16,898	15,272
Capitalized research and development	4,936	2,014
Tax credit carryforwards	3,960	1,630
Stock based compensation	525	1,602
Accrued expense and reserves	1,584	568
Operating lease liabilities	774	315
Other	159	77
Total deferred tax assets	100,270	70,462
Less valuation allowance	(96,776)	(67,543)
Total deferred tax assets	3,494	2,919
Deferred tax liabilities:
Intangible assets	(2,734)	(2,666)
Operating lease right-of-use assets	(760)	(253)
Total deferred tax liabilities	(3,494)	(2,919)
Net deferred tax liabilities	$ 0	$ 0

Net Loss Per Share - potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	48,168,217	27,943,081	18,967,724
Convertible Debentures
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	546,921	0	0
Stock Options
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	33,123,798	16,939,093	18,967,724
Public Warrants
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	6,854,309	6,899,988	0
Private Warrants
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	3,613,383	4,104,000	0
Retainer Shares
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	4,000,000	0	0
Shares Issuable pursuant to ESPP
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount	29,806	0	0

Debt (Tables)

12 Months Ended

Dec. 31, 2023

Debt Instrument [Line Items]

Schedule of convertible debentures

The following table provides a summary of the changes in the balance and the estimated fair value of the Convertible Debentures (in thousands):


	December 31, 2023
Beginning Balance as of January 1, 2023	$	—
Issuance of Convertible Debentures		24,000
Repayment of Convertible Debentures		(15,625	)
Change in fair value of Convertible Debentures		3,700
Conversion of Convertible Debentures into Common Stock		(7,735	)

Ending Balance as of December 31, 2023	$	4,340

Oramed Note

Debt Instrument [Line Items]

Schedule of The Oramed Note

The following table provides a summary of the changes in the balance and the estimated fair value of the Oramed Note (in thousands):


	December 31, 2023
Beginning Balance as of January 1, 2023	$	—
Issuance of Oramed Note		106,252
Change in fair value of Oramed Note		2,837
Repayment of Oramed Note		(5,000	)

Ending Balance as of December 31, 2023	$	104,089

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
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-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69C

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69E

Reference 8: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69F

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
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-Paragraph 1B
-Subparagraph (b)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Paragraph 1B
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
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-Publisher FASB
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+ Details

Fair Value Measurements (Details) - Schedule of quantitative information regarding Level 3 fair value measurements	12 Months Ended
	Dec. 31, 2023 $ / shares
Fair Value Disclosures [Abstract]
Risk-free rate	5.31%
Corporate Bond Yield	15.60%
Coupon Interest Rate	7.00%
Volatility	70.00%
Dividend yield	0.00%
Conversion Price	$ 8

Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt

7. Debt

Convertible Debentures

On March 21, 2023, the Company entered into the Yorkville SPA, pursuant to which the Company would issue and sell to Yorkville Convertible Debentures in an aggregate principal amount of up to $25.0 million. The Yorkville SPA provides that the Convertible Debentures would be issued and sold at a purchase price equal to 96% of the applicable principal amount in three tranches as follows: (i) $10.0 million upon the signing of the Yorkville SPA, which was funded on March 21, 2023; (ii) $7.5 million upon the filing of a registration statement on Form

S-1

with the SEC to register the resale by Yorkville of any shares of Common Stock issuable upon conversion of the Convertible Debentures under the Securities Act of 1933, as amended (the “Securities Act”), which was funded on April 11, 2023; and (iii) $7.5 million at the time such registration statement was declared effective by the SEC, which was funded on April 20, 2023.

The Convertible Debentures bear interest at an annual rate of 7.00% and were initially set to mature on December 21, 2023. On

October 11, 2023

, the Company and Yorkville amended the Convertible Debentures. The Default Conversion Price (as defined therein) was originally set not to fall below $2.00 per share and such floor price has been amended to mean a price per share of Common Stock equal to 95% of the lowest daily VWAP (as defined therein) during the five consecutive trading days immediately preceding the conversion date, but not lower than $0.50 per share. The maturity date of the Convertible Debentures was also extended from December 21, 2023 to March 15, 2024. The outstanding principal amount is to be repaid in equal installments that are due every 30 days beginning on May 20, 2023, which is 60 days after the date on which the first Convertible Debenture was issued to Yorkville. The Convertible Debentures provide a conversion right, in which any portion of the outstanding and unpaid principal and any accrued but unpaid interest may be converted into shares of Common Stock, at a conversion price of $8.00 per share at the option of the holder of the Convertible Debentures.

The Company has the option to repay either (i) in cash, with premium equal to 5% in respect of the principal amount of such payment, or (ii) by submitting a notice for an advance under the A&R Yorkville Purchase Agreement, or a series of advances thereunder, or any combination of (i) or (ii) as determined by the Company. In the case of (ii), the proceeds from the shares sold to Yorkville are applied against the outstanding amounts.

The Company has the right, but not the obligation, in its sole discretion, to redeem, upon five business days’ prior written notice to Yorkville (the “Redemption Notice”), all or any portion of the amounts outstanding under the Convertible Debentures; provided that the trading price of the Common Stock is less than the Conversion Price at the time of the Redemption Notice. The redemption amount shall be equal to the outstanding principal balance being redeemed by the Company, plus the redemption premium of 10% of the principal amount being redeemed, plus all accrued and unpaid interest in respect of such redeemed principal amount.

The Company has elected the fair value option for the Convertible Debentures and records the changes in the fair value within the consolidated statements of operations at the end of each reporting period. Pursuant to the

Yorkville SPA, the Company issued additional Convertible Debentures in an aggregate principal amount of $15.0 million in April 2023 for $14.4 million in net cash proceeds. In April 2023, Yorkville elected to convert $5.0 million of the outstanding principal and accrued interest of the first Convertible Debentures issued to Yorkville, resulting in the issuance of 632,431 shares of Common Stock at a conversion price of $8.00 per share and reducing the outstanding Convertible Debentures fair value balance by $4.4 million. The Company repaid $15.6 million of the Convertible Debentures during the year ended December 31, 2023.

Interest expense related to the Convertible Debentures and included in the changes in fair value

was $0.7 million for the year ended December 31, 2023.

The following table provides a summary of the changes in the balance and the estimated fair value of the Convertible Debentures (in thousands):


	December 31, 2023
Beginning Balance as of January 1, 2023	$	—
Issuance of Convertible Debentures		24,000
Repayment of Convertible Debentures		(15,625	)
Change in fair value of Convertible Debentures		3,700
Conversion of Convertible Debentures into Common Stock		(7,735	)

Ending Balance as of December 31, 2023	$	4,340

Revolving Facility

On June 27, 2023, Scilex Pharma entered into the eCapital Credit Agreement, pursuant to which the Lender shall make available the Revolving Facility in an aggregate principal amount of up to $30.0 million. The Facility Cap may, at the request of Scilex Pharma and with the consent of the Lender, be increased in increments of $250,000 at such time as the outstanding principal balance under the eCapital Credit Agreement equals or exceeds 95% of the then-existing Facility Cap. The amount available to Scilex Pharma under the Revolving Facility at any one time is the lesser of the Facility Cap and 85% of the Net Collectible Value of Eligible Receivables (each as defined therein) minus the amount of any reserves or adjustments against receivables required by the Lender, in its discretion.

Under the terms of the eCapital Credit Agreement, interest will accrue daily on the principal amount outstanding at a rate per annum equal to the Wall Street Journal Prime Rate plus 1.5%, based on a year consisting of 360 days, and which shall be payable by Scilex Pharma monthly in arrears, commencing July 1, 2023. The eCapital Credit Agreement provides for an early termination fee of 0.5% of the Facility Cap if Scilex Pharma voluntarily prepays and terminates in full the Revolving Facility prior to the first anniversary of the closing of the Revolving Facility.

In connection with the eCapital Credit Agreement, Scilex Pharma and the Lender entered into blocked account control agreements with respect to Scilex Pharma’s collections and eCapital Credit Agreement funding accounts, which permit the Lender to sweep all funds in the collections account to an account of the Lender for application to the outstanding amounts under the Revolving Facility, and to exercise customary secured party remedies with respect to the eCapital Credit Agreement funding account. All indebtedness incurred and outstanding under the eCapital Credit Agreement will be due and payable in full on July 1, 2026, unless the eCapital Credit Agreement is earlier terminated.

The eCapital Credit Agreement contains a financial covenant requiring Scilex Pharma to maintain cash on hand of at least $1.0 million at all times. Scilex Pharma’s obligations under the eCapital Credit Agreement are secured by a continuing security interest in Scilex Pharma’s accounts receivable, arising from customers in the ordinary

course of business. The eCapital Credit Agreement contains customary events of default and also provides that an event of default includes a change of control of Scilex Pharma and the failure by the Company to issue at least $75.0 million of debt or equity by September 30, 2023, which condition was satisfied by the issuance of the Oramed Note. As of December 31, 2023, Scilex Pharma has an outstanding balance of $17.0 million under the Revolving Facility, which is classified as a long-term liability in the consolidated balance sheet.

On September 21, 2023, Scilex Pharma signed a subordination agreement (the “Subordination Agreement”) with the Lender and Acquiom Agency Services LLC (the “Agent”). Pursuant to the Subordination Agreement, the rights and interests of the Lender under the eCapital Credit Agreement would be secured by first priority liens on the ABL Priority Collateral (as defined therein). The ABL Priority Collateral consists of all of the Company’s properties identified in the description of collateral in the

UCC-1

Financing Statement filed with the Delaware Secretary of State on June 27, 2023. The Agent’s rights and interests under that certain Subsidiary Guarantee, dated as of September 21, 2023, entered into by us and each of our subsidiaries with Oramed and the Agent (the “Subsidiary Guarantee”), would be secured by first priority liens on certain other collateral and second priority liens on the ABL Priority Collateral. The Subordination Agreement also includes other standard interlender terms and requires that the Facility Cap (as defined therein) shall not exceed $30.0 million.

The Oramed Note

On September 21, 2023, the Company entered into a securities purchase agreement with Oramed (the “Scilex-Oramed SPA”), pursuant to which the Company issued the Oramed Note. The Oramed Note, which has a principal amount of $101.9 million, matures on March 21, 2025. It is payable in six principal installments, with the first installment of $5.0 million payable on December 21, 2023, the second installment in the principal amount of $15.0 million payable on March 21, 2024, the next three installments each in the principal amount of $20.0 million payable on each of June 21, 2024, September 21, 2024 and December 21, 2024 and the last installment in the entire remaining principal balance of the Oramed Note payable on March 21, 2025. Interest under the Oramed Note accrues at a fluctuating per annum interest rate equal to the sum of (1) greater of (x) 4% and (y) Term SOFR (as defined in the Oramed Note) and (2) 8.5%, payable

in-kind

on a monthly basis. If the outstanding principal has not been fully repaid by March 21, 2024, an exit fee of approximately $3.1 million becomes due upon repayment. Upon the occurrence and during the continuance of an event of default under the Oramed Note, holders of more than 50% of the aggregate unpaid principal amount of the Oramed Notes may elect to accrue interest at a default rate equal to the lesser of (i) Term SOFR plus 15% or (ii) the maximum rate permitted under applicable law. Voluntary prepayments made before the

one-year

anniversary of the closing date of the Scilex-Oramed SPA must include a make-whole amount equal to 50% of the additional interest that would accrue on the principal amount so prepaid from the date of such prepayment through and including the maturity date. If the Oramed Note is accelerated upon an event of default, repayment is required at a mandatory default rate of 125% of the principal amount (together with 100% of accrued and unpaid interest thereon and all other amounts due in respect of the Oramed Note). The Oramed Note contains mandatory prepayment provisions requiring use of 70% of net cash proceeds from any Cash Sweep Financing (as defined in the Oramed Note) or advances under the ELOCs (as defined in the Oramed Note) to prepay the outstanding principal after the earlier of April 1, 2024 or full repayment of Acceptable Indebtedness (as defined in the Oramed Note).

The Oramed Note contains affirmative and negative covenants binding on the Company and its subsidiaries, which restrict, among other things, the Company and its subsidiaries from incurring indebtedness or liens, amending charter and organizational documents, repaying or repurchasing stock, repaying, repurchasing, or acquiring indebtedness, paying or declaring cash dividends, assigning, selling, transferring or otherwise disposing of assets, making or holding investments, entering into transactions with affiliates, and entering into settlement agreements, in each case as more fully set forth in, and subject to certain qualifications and exceptions set forth in, the Oramed Note. The Company was in compliance with all of the covenants as of December 31, 2023.

In connection with the Oramed Note, the Company and each of its subsidiaries (collectively, the “Guarantors”) entered into a security agreement (the “Security Agreement”) with Oramed (together with its successors and

permitted assigns, the “Holder”) and the Agent, which acts as the collateral agent for the holders of the Oramed Note. 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. This was done to ensure the timely payment, performance, and full discharge of all obligations under the Oramed Note. The Security Agreement contains certain customary representations, warranties and covenants regarding the collateral thereunder, all of which are detailed in the Security Agreement.

At issuance, the Company concluded that certain features of the Oramed Note would be considered derivatives that would require bifurcation. 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 at the end of each reporting period. As of December 31, 2023, the fair value of the Oramed Note was $104.1 million, which is classified as a current liability in the consolidated balance sheet.

The following table provides a summary of the changes in the balance and the estimated fair value of the Oramed Note (in thousands):


	December 31, 2023
Beginning Balance as of January 1, 2023	$	—
Issuance of Oramed Note		106,252
Change in fair value of Oramed Note		2,837
Repayment of Oramed Note		(5,000	)

Ending Balance as of December 31, 2023	$	104,089

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Junior DIP Facility and Sorrento Share Purchase Agreement	12 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Junior DIP Facility and Sorrento Share Purchase Agreement	8. Junior DIP Facility and Sorrento Stock Purchase Agreement Junior DIP Facility In July 2023, the Company entered into an agreement to provide Sorrento with a non-amortizing super-priority junior secured term loan facility (“Junior DIP Facility”) in an aggregate principal amount of $20.0 million (the “Junior DIP Loan Agreement”), which was funded in the same month. The Junior DIP Facility bears interest at a per annum rate of 12.0% payable in kind on the first day of each month in arrears and on the DIP Termination Date (as defined in the Junior DIP Loan Agreement). Upon repayment or satisfaction of the DIP Loans (as defined in the Junior DIP Loan Agreement) in whole or in part, Sorrento is required to pay to the Company in cash an exit fee equal to 2.00% of the aggregate principal amount of the Junior DIP Facility. The Junior DIP Facility was to mature on the earliest of: (i) September 30, 2023; (ii) the effective date of any Chapter 11 plan of reorganization with respect to Sorrento; (iii) the consummation of any sale or other disposition of all or substantially all of the assets of Sorrento; (iv) the date of the acceleration of the DIP Loans and the termination of the DIP Commitments (as defined in the Junior DIP Loan Agreement) in accordance with the DIP Documents (as defined in the Junior DIP Loan Agreement); and (v) dismissal of the Chapter 11 Cases or conversion of the Chapter 11 Cases into cases under Chapter 7 of the Bankruptcy Code. On September 21, 2023, Sorrento’s obligations under the Junior DIP Facility were waived and deemed to be fully settled in conjunction with the Sorrento SPA as described below. Consequently, the transfer of funds associated with the Junior DIP Facility was deemed and accounted for as a capital distribution to Sorrento. Sorrento Stock Purchase Agreement On September 21, 2023, the Company entered into a Stock Purchase Agreement with Sorrento (“Sorrento SPA”), pursuant to which the Company purchased from Sorrento (i) 60,068,585 shares of Common Stock, (ii) 29,057,097 shares of Series A Preferred Stock, par value $0.0001 per share, of the Company (the “Preferred Stock”) and (iii) 1,386,617 Public Warrants and 3,104,000 Private Warrants (collectively, the “Purchased Securities”). On the same day, the Company and Oramed entered into the Scilex-Oramed SPA. The Company concluded that the Sorrento SPA and the Scilex-Oramed SPA were entered in contemplation of each other and the issuance of the Oramed Note was accounted as part of the consideration payable for the Purchased Securities acquired from Sorrento. 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. Additionally, the Company agreed to transfer to Oramed 4,000,000 SPAC Warrants, which were acquired by the Company under the Sorrento SPA. There was no change in the terms for the warrants transferred to Oramed as a result of the transactions described above. The remaining consideration for the Purchased Securities was comprised of a credit bid for all amounts of principal and accrued but unpaid interest outstanding under the Junior DIP Facility, a $10.0 million cash payment, and the assumption and assignment of certain obligations of Sorrento for legal fees and expenses amounting to approximately $12.3 million. The Company allocated the total consideration between the repurchased instruments by allocating to the repurchased Private Warrants their full value, with the remaining consideration allocated to the Common Stock, Preferred Stock, and Public Warrants based on their relative fair values as of September 21, 2023. 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. 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). Preferred Stock Pursuant to the terms of the Sorrento SPA, the Company repurchased all of the outstanding Preferred Stock. The Preferred Stock is classified in equity and does not have any bifurcated features. Therefore, the repurchase of the Preferred Stock by the Company is treated as a redemption of shares and viewed as a deemed dividend. The fair value of Preferred Stock as of the repurchase date of September 21, 2023 was $52.6 million. The Company derecognized the carrying value of the Preferred Stock, with any excess amount allocated as the reduction in additional paid-in capital. The Preferred Stock is currently held as collateral for the Oramed Note. Treasury Stock The Common Stock that has been repurchased by the Company under the Sorrento SPA is not intended for constructive retirement, and is being held as collateral for the Oramed Note. In accordance with treasury stock accounting guidance, the consideration allocated to Common Stock is presented under a separate caption of Treasury Stock as a reduction of equity. Penny Warrants The Closing Penny Warrant will be exercisable upon the earliest of (i) March 14, 2025, (ii) the date on which the Oramed Note has been repaid in full and (iii) the Management Sale Trigger Date (as defined therein), if any, and will expire on the date that is the fifth anniversary of the issuance date. The Company issued four Subsequent Penny Warrants, each for 2,125,000 shares of Common Stock, one of which shall vest and become exercisable on the date that is the later of (i) each of March 19, 2024, June 17, 2024, September 15 , 2024 or December 14, 2024 (the “Subsequent Penny Warrant Vesting Date”) and (ii) the earliest of (A) March 14, 2025, (B) the date on which the Oramed Note has been repaid in full and (C) the Management Sale Trigger Date (as defined therein), if any. Each Subsequent Penny Warrant will expire on the date that is the fifth anniversary of the issuance date; provided that, if the Oramed Note is repaid in full prior to the Subsequent Penny Warrant Vesting Date applicable to such Subsequent Penny Warrant, such Subsequent Penny Warrant will expire on the date the Oramed Note is repaid in full. The exercise price of the Penny Warrants is $0.01 per share, subject to adjustments provided therein. The exercise price and number of shares of Common Stock issuable upon the exercise of the Penny Warrants will be subject to adjustment in the event of any stock dividend, stock split, recapitalization, reorganization or similar transaction, as described in the Penny Warrants; provided that there shall not be any adjustment to the exercise price of the Penny Warrants in the event the Company combines (by combination, reverse stock split or otherwise) its Common Stock into a smaller number of shares. Oramed may exercise the Penny Warrants by means of a “cashless exercise.” The Closing Penny Warrant and the Subsequent Penny Warrants utilize the same form of warrant. The Penny Warrants may not be exercised if Oramed, together with its affiliates, would beneficially own in excess of 9.9% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise (the “Oramed Beneficial Ownership Limitation”); provided, however, that upon 61 days’ prior notice to the Company, Oramed may increase or decrease the Oramed Beneficial Ownership Limitation. 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 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. Excise Tax In December 2022, the Department of the Treasury and the Internal Revenue Service (the “IRS”) issued guidelines on the implementation of the new code section added by the Inflation Reduction Act of 2022, which imposes a 1% excise tax on the total fair market value of stock repurchases during the tax year, subject to adjustments. Pursuant to the terms of the Sorrento SPA, the Company repurchased the Purchased Securities from Sorrento. The total fair market value of the Purchased Securities was offset by the fair market value of the shares issued during the year ended December 31, 2023. The Company has accrued $1.3 million of the excise tax liability, which is recorded as accrued expenses under current liabilities on the consolidated balance sheet. The excise tax will be adjusted based on any new guidance that the IRS may release.

Nature of Operations and Basis of Presentation (Tables)

12 Months Ended

Dec. 31, 2023

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents


	December 31, 2023		December 31, 2022
Cash and cash equivalents	$	3,921	$	2,184
Restricted cash		808		—

Total cash, cash equivalents, and restricted cash	$	4,729	$	2,184

Shareholders' Equity (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	Dec. 22, 2023	Aug. 31, 2023	Nov. 17, 2022	Dec. 31, 2023	Sep. 25, 2023	Dec. 31, 2022
Shareholders' Equity (Details) [Line Items]
Common stock, shares issued				160,084,250	474,683	141,348,856
Share price				$ 18
Warrants outstanding				6,854,309		6,899,988
Preferred stock, shares outstanding				29,057,097		29,057,097
Treasury Stock Common Shares Outstanding				60,068,585		0
Shares issued, shares				250,000
Payment made to Investor				$ 8,650
Common Stock Issued				$ 16		$ 14
Preferred Stock Member
Shareholders' Equity (Details) [Line Items]
Preferred stock, shares outstanding				29,057,097		29,057,097
Hudson Bay [Member]
Shareholders' Equity (Details) [Line Items]
Proceed from Securities and Warrants issued		$ 118,600
Common Stock Issued				$ 500
Cove Lane [Member]
Shareholders' Equity (Details) [Line Items]
Common Stock Issued				$ 300
A R Yorkville Purchase Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Common stock, shares issued				632,431
Purchase of stock, percentage				98.00%
Common stock sold				11,552,074
Proceeds from sale of common stock				$ 32,300
Right to sell maximum number of common stock shares			$ 500,000	$ 500,000
A R Yorkville Purchase Agreement [Member] \| Common Stock [Member]
Shareholders' Equity (Details) [Line Items]
Shares issued, shares				250,000
B. Riley Purchase Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Common stock, shares issued				250,000
Purchase of stock, percentage				98.00%
Common stock sold				1,414,554
Proceeds from sale of common stock				$ 3,200
Right to sell maximum number of common stock shares			$ 500,000
ATM Sales Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Number sale of common stock shares	170,000,000
Proceeds from sale of common shares percentage				3.00%
ATM Sales Agreement [Member] \| Maximum [Member]
Shareholders' Equity (Details) [Line Items]
Number sale of common stock shares	170,000,000
Warrants [Member] \| Warrant Transfer Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Price per share				$ 0.01
Warrants outstanding				3,613,383		4,104,000
Treasury Stock [Member]
Shareholders' Equity (Details) [Line Items]
Treasury Stock Common Shares Outstanding				60,068,585

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of identifiable intangible assets

A summary of the Company’s identifiable intangible assets as of December 31, 2023 and December 31, 2022 is as follows (in thousands):


	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	15,591	$	17,039
Acquired technology		21,940		7,679		14,261
Acquired licenses		5,711		551		5,160
Assembled workforce		500		475		25

Total intangible assets	$	60,781	$	24,296	$	36,485


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	13,415	$	19,215
Acquired technology		21,940		6,216		15,724
Acquired licenses		5,711		184		5,527
Assembled workforce		500		375		125

Total intangible assets	$	60,781	$	20,190	$	40,591

Estimated future amortization expense related to intangible assets

Estimated future amortization expense related to intangible assets as of December 31, 2023 is as follows (in thousands):


	Amount
2024	$	4,031
2025		4,006
2026		4,006
2027		4,006
2028		4,006
Thereafter		16,430

Total	$	36,485

Balance Sheet Components - Schedule of Acrcued expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Accrued professional service fees	$ 2,029	$ 2,024
Accrued sales and marketing costs	1,601	574
Accrued research and development costs	1,546	459
Accrued tax payable	1,452	0
Accrued others	780	79
Accrued expenses	$ 7,408	$ 3,136

Fair Value Measurements (Additional Information) (Details) - USD ($) $ in Thousands					12 Months Ended
	Sep. 30, 2023	Apr. 30, 2023	Nov. 30, 2022	Jun. 02, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
Subsidiary, Sale of Stock [Line Items]
Oramed note discount rate					13.05%
Aggregate Principle amount of issued debt		$ 25,000
Warrants outstanding					6,854,309	6,899,988
Change in fair value of debt and liability instruments					$ 4,400
(Gain) loss on derivative liability					(512)	$ 8,310	$ (300)
Liabilities, Fair Value Adjustment				$ 30,400
Risk Adjusted Net Sales Forecast								6.10%
Debt Securities, Available-for-Sale, Weighted Average Yield								21.50%
Common stock upon conversation of cash					$ 3,000
Discount rate of FDA					10.20%
Development Milestone Payment					$ 200	200
Derivative warrant liability private warrants					1,500
Warrants [Member]
Subsidiary, Sale of Stock [Line Items]
(Gain) loss on derivative liability					500	$ 8,300	$ (300)
Oramed Note
Subsidiary, Sale of Stock [Line Items]
Estimated fair value					104,100
Aggregate Principle amount of issued debt	$ 101,900
Change in fair value of debt and liability instruments					$ 2,800
Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Warrants outstanding					3,613,383
Derivative warrant liability private warrants			$ 2,500

Fair Value Measurements (Details) - Schedule Of The Derivative Liabilities Measured at Fair Value - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Fair value, beginning	$ 1,231
Fair value, ending	1,518	$ 1,231
Level 3 [Member]
Fair Value Disclosures [Abstract]
Fair value, beginning	1,231	35,700	$ 35,400
Private Warrant liability acquired as part of the Business Combination		2,545
Re-measurement of fair value			300
Forfeiture of Private Warrants	(225)	1,696
Change in fair value measurement	512	(38,710)
Fair value, ending	$ 1,518	$ 1,231	$ 35,700

- Definition

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480524/946-210-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480524/946-210-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
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+ Details

Stockholders' Equity	12 Months Ended
Stockholders' Equity	Dec. 31, 2023
Stockholders' Equity Note [Abstract]
STOCKHOLDERS EQUITY	9. Stockholders’ Equity SPAC Warrants Upon the completion of the Business Combination, the Company assumed the SPAC Warrants. Holders of the SPAC Warrants are entitled to acquire shares of Common Stock. The SPAC Warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. 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 Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The Company will not be required to net cash settle the SPAC Warrants. The Public Warrants are equity-classified warrants and recognized in additional paid-in capital in the accompanying consolidated balance sheets. The Private Warrants are liability-classified warrants and are recognized as liabilities (refer to Notes 1 and 4). During the year ended December 31, 2023, the SPAC Warrants held by Sorrento were repurchased, and certain of such warrants transferred to Oramed, as a result of the Sorrento SPA (refer to Note 8). As of December 31, 2023 and 2022, there were 6,854,309 and 6,899,988 Public Warrants outstanding, respectively. As of December 31, 2023 and 2022, there were 3,613,383 and 4,104,000 Private Warrants outstanding, respectively. Preferred Stock As of December 31, 2023 and 2022, there were 29,057,097 shares of Preferred Stock outstanding. On September 21, 2023, the Preferred Stock was repurchased and derecognized for accounting purposes. The Preferred Stock is currently held as collateral for the Oramed Note. Treasury Stock As of December 31, 2023, there were 60,068,585 shares of Treasury Stock. A&R Yorkville Purchase Agreement Pursuant to the A&R Yorkville Purchase Agreement, the Company has the right, but not the obligation, in its sole and absolute discretion, to sell to Yorkville up to $500.0 million of shares of Common Stock at its request and subject to certain conditions by delivering written notice to Yorkville at any time until the first day of the month following the 36-month anniversary of the date on which the Company’s registration statement on Form S-1 registering such shares has been declared effective by the SEC. Pursuant to the A&R Yorkville Purchase Agreement, the shares of Common Stock, if any, that the Company elects to sell to Yorkville pursuant to a sale of Common Stock will be purchased at a price equal to 98% of the VWAP (as defined below) during the applicable pricing period for such advance, which shall be the period commencing upon receipt by Yorkville of an advance notice from the Company (or the open of regular trading hours, if later) and ending on 4:00 p.m. on the same day. For purposes of the A&R Yorkville Purchase Agreement, “VWAP” means, for a specified period, the volume weighted average price of the Common Stock on the Nasdaq Capital Market for such period as reported by Bloomberg L.P. through its “AQR” function. Pursuant to the terms of the Original Purchase Agreement, the Company filed a registration statement on Form S-1 (File No. 333-268607) (as it may be amended or supplemented from time to time, the “Yorkville Registration Statement”) related to the Original Purchase Agreement with the SEC on November 30, 2022 (following the execution of the Original Purchase Agreement). The Yorkville Registration Statement was initially declared effective by the SEC on December 9, 2022. In connection with the execution of the Original Purchase Agreement, the Company issued to Yorkville 250,000 shares of Common Stock. During the year ended December 31, 2023, the Company sold 11,552,074 shares of Common Stock pursuant to the A&R Yorkville Purchase Agreement for aggregate net proceeds of $32.3 million. B. Riley Purchase Agreement Pursuant to the B. Riley Purchase Agreement, the Company has the right, but not the obligation, to sell to B. Riley up to $500.0 million of shares of Common Stock, subject to certain limitations and conditions set forth therein, from time to time at the Company’s sole and absolute discretion, during the term of the B. Riley Purchase Agreement. The Company’s right to sell shares of Common Stock pursuant to the B. Riley Purchase Agreement shall end on the first day of the month following the 36-month anniversary of the date on which the B. Riley Registration Statement (as defined below) was initially declared effective by the SEC. Pursuant to the terms of the B. Riley Purchase Agreement, the Company filed a registration statement on Form S-1 (File No. 333-269205) (as it may be amended or supplemented from time to time, the “B. Riley Registration Statement”) related to the B. Riley Purchase Agreement with the SEC on January 12, 2023 (following the execution of the B. Riley Purchase Agreement). The B. Riley Registration Statement was initially declared effective by the SEC on January 20, 2023. The shares of Common Stock, if any, that the Company elects to sell to B. Riley pursuant to an advance under the B. Riley Purchase Agreement will be purchased at a price equal to 98% of the VWAP (as defined in such agreement) during the pricing period prescribed therein. In connection with the execution of the B. Riley Purchase Agreement, the Company issued to B. Riley 250,000 shares of Common Stock. During the year ended December 31, 2023, the Company sold an aggregate of 1,414,554 shares of Common Stock for aggregate net proceeds of $3.2 million. On, and effective as of, February 16, 2024, the Company and B. Riley mutually agreed to terminate the B. Riley Purchase Agreement. Stock Issued under Settlement Agreement with Hudson Bay Parties In August 2023, the Company, along with Hudson Bay Capital Management LP (“Hudson Bay”), Cove Lane Onshore Fund, LLC (“Cove Lane”), and HBC Investments LLC (“HBC” and collectively, the “Hudson Bay Parties”), entered into several agreements. Under these agreements, the Company agreed to issue and sell up to $118.6 million in securities and warrants to the Hudson Bay Parties. However, on September 15, 2023, a settlement agreement was reached and released all claims related to the previous agreements. The Company acknowledged payments of $8.65 million made to the Hudson Bay Parties as properly earned. To satisfy remaining obligations, the Company agreed to issue shares of Common Stock to Cove Lane and HBC worth $0.3 million and $0.5 million, respectively. This resulted in the issuance of an aggregate of 474,683 shares of Common Stock on September 25, 2023. At-the-Market Sales Agreement On December 22, 2023, the Company entered into a Sales Agreement (the “ATM Sales Agreement”) with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC (the “Sales Agents”). Pursuant to the ATM Sales Agreement, the Company may offer and sell (the “Offering”) shares of Common Stock up to $170,000,000 (the “ATM Shares”), through or to the Sales Agents. The Company has no obligation to sell any shares of Common Stock under the ATM Sales Agreement and may suspend offers at any time. The Offering will terminate upon (i) the election of the Sales Agents upon the occurrence of certain adverse events, (ii) three business days’ advance notice from the Company to the Sales Agents or a Sales Agent to the Company, or (iii) the sale of all $170,000,000 of shares of Common Stock thereunder. The ATM Shares offered and sold in the Offering will be issued pursuant to the Company’s shelf registration statement on Form S-3 (the “Shelf S-3 Registration Statement”), filed with the SEC on December 22, 2023, and declared effective by the SEC on January 11, 2024. The ATM Shares may be offered only by means of a prospectus forming a part of the Shelf S-3 Registration Statement. The Sales Agents are entitled to a commission equal to 3.0% of the gross proceeds from each sale of shares of Common Stock. The Company will also reimburse the Sales Agents for certain expenses and has agreed to provide indemnification and contribution to the Sales Agents against certain civil liabilities, including liabilities under the Securities Act. As of December 31, 2023, no sales of Common Stock had been made under the ATM Sales Agreement.

- Definition

The entire disclosure for equity.

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+ Details