Company: SCLXW
Filing Date: 2025-01-17
Form Type: 424B3
Source: 0000950170-25-006777
Chunk: 15

Company: Scilex Holding Co
Filing Date: 2025-01-17
Form: 424B3
Chunk 15
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89% of the Company’s revenue for the three and nine months ended September 30, 2024, respectively and individually ranging from 14% to 30% and 12% to 28%, respectively. As of September 30, 2024, these customers represented 99% of the Company’s outstanding accounts receivable, individually ranging between 9% to 44%. Additionally, during the three and nine months ended September 30, 2024 and 2023, the Company purchased ZTlido inventory from its sole supplier, Itochu Chemical Frontier Corporation (“Itochu”). In November 2023 and February 2024, respectively, the Company started purchasing ELYXYB and GLOPERBA inventories from its sole suppliers, Contract Pharmaceuticals Ltd Canada (CPL) and Ferndale Laboratories, Inc., respectively. 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 nine months ended September 30, 2024 and 2023.

Significant Accounting Policies

There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2024, as compared to the significant accounting policies described in Note 1 of the Notes to Consolidated Financial Statements in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K, except for the policy titled “Investments” below.

Investments

The Company has elected to subsequently measure investments in Purchased Interests (as defined in Note 2 “Balance Sheet Components” below) at cost less any impairment, in accordance with the guidance in ASC 321, Investments - Equity Securities, which allows an entity to measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at cost less impairment. On a quarterly basis, the Company is required to make a qualitative assessment of whether the investment is impaired.

Fair Value Measurements

Financial assets and liabilities are recorded at fair value on a recurring basis in the condensed 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 valuation of the derivative warrant liability for Private Warrants, Firm Warrants and RDO Common Warrants (each as defined below) is