Company: SCLXW
Filing Date: 2025-01-17
Form Type: 10-Q
Source: 0000950170-25-006755
Chunk: 298

Company: Scilex Holding Co
Filing Date: 2025-01-17
Form: 10-Q
Item: Item 8
Chunk 298
---
 provide for periodic rent increases and may include options to extend. As of September 30, 2024, the Company’s leases have remaining lease terms of approximately 3.0 years. The terms of the Company’s leases, ranging from 3 to 5 years, include extension options that are 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 right-of-use (“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 September 30, 2024, 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 $0.3 million for each of the three months ended September 30, 2024 and 2023, and $0.8 million for each of the nine months ended September 30, 2024 and 2023. The lease expense included variable lease costs, sublease income and impairment, which were immaterial for the periods presented. 

 33

Supplemental quantitative information related to leases includes the following: 

        Nine Months Ended September 30,

        2024

        2023

        Cash paid for amounts included in the measurement of lease liabilities:

        Operating cash flows from operating leases (in thousands)
         
        $
        (259
        )
         
        $
        (744
        )

        Weighted average remaining lease term in years — operating leases

        3.0

        3.9

        Weighted average discount rate — operating leases