Company: SCLXW
Filing Date: 2025-01-17
Form Type: 10-Q
Source: 0000950170-25-006755
Chunk: 280

Company: Scilex Holding Co
Filing Date: 2025-01-17
Form: 10-Q
Item: Item 8
Chunk 280
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 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. 

 23

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 (together with the Closing Penny Warrant, the “Oramed 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 (the CS-2 Warrant), June 17, 2024 (the CS-3 Warrant), September 15, 2024 (the CS-4 Warrant) or December 14, 2024 (the CS-5 Warrant) (each, 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 W