What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-10 compared with 2025-03-31 · 293 added, 168 removed, 366 unchanged (56% of the section changed)

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We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth in the sections of this Annual Report on Form 10-K titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

We are an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid management products for the treatment of acute and chronic pain.

On April 15, 2025, we effected a reverse stock split of our Common Stock at a ratio of 1-for-35 (the “Reverse Stock Split”).

Unless otherwise noted, the share and per share information in this Annual Report on Form 10-K reflects the effect of the Reverse Stock Split.

We are an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain.

We believe that our innovative non-opioid product portfolio has the potential to provide effective pain management therapies that can have a transformative impact on patients’ lives.

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We launched our first commercial product in October 2018, in-licensed two commercial products in 2022 and 2023, and are developing our late-stage pipeline.

Our commercial product, ZTlido (lidocaine topical system) 1.8% (“ZTlido”), is a prescription lidocaine topical product approved by the U.S.

Food and Drug Administration (“FDA”) for the relief of neuropathic pain associated with post-herpetic neuralgia (“PHN”), which is a form of post-shingles nerve pain.

Our commercial product, ZTlido (lidocaine topical system) 1.8% (“ZTlido”), is a prescription lidocaine topical product approved by the “FDA” for the relief of neuropathic pain associated with post-herpetic neuralgia (“PHN”), which is a form of post-shingles nerve pain.

ZTlido possesses novel delivery and adhesion technology designed to address many of the limitations of current prescription lidocaine patches by providing significantly improved adhesion and continuous pain relief throughout the 12-hour administration period.

We market ZTlido through a dedicated sales force of over 70 people, targeting 10,000 primary care physicians, pain specialists, neurologists and palliative care physicians who we believe treat the majority of PHN patients.

We in-licensed the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution (“GLOPERBA”), an FDA-approved prophylactic treatment for painful gout flares in adults, in the United States of America (“U.S.” or the “United States”).

We market ZTlido through a third-party dedicated sales force of over 30 people, targeting 10,000 primary care physicians, pain specialists, neurologists and palliative care physicians who we believe treat the majority of PHN patients.

We also in-licensed the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution (“GLOPERBA”), an FDA-approved prophylactic treatment for painful gout flares in adults, in the United States of America (“U.S.” or the “United States”).

We launched GLOPERBA in June 2024 and believe we are well-positioned to market and distribute the product.

In January 2025, we in-licensed the rights to commercialize GLOPERBA outside of the U.S.

In February 2023, we acquired the rights to patents, trademarks, regulatory approvals and other rights related to ELYXYB (celecoxib oral solution) (“ELYXYB”) and its commercialization in the U.S.

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for the treatment of acute migraine, with or without aura, in adults.

We filed a New Drug Submission (“NDS”) to Health Canada’s Pharmaceutical Drugs Directorate, Bureau of Cardiology, Allergy and Neurological Sciences for the approval of ELYXYB for acute treatment of migraine with or without aura in Canada.

Our development pipeline consists of three product candidates, (i) SP-102 (“SEMDEXA”) (10 mg, dexamethasone sodium phosphate viscous gel), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain or sciatica with completed Phase 3 study, (ii) SP-103 (lidocaine topical system) 5.4% (“SP-103”), a Phase 2, next-generation, triple-strength formulation of ZTlido, for the treatment of chronic neck pain associated with muscle spasms and for which we have completed a Phase 2 trial in acute low back pain (“LBP”) in the third quarter of 2023, and (iii) SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride formulation for treatment of fibromyalgia, for which Phase 1 trials were completed in the second quarter of 2022.

In January 2025, we received approval from Health Canada’s Pharmaceutical Drugs Directorate, Bureau of Cardiology, Allergy and Neurological Sciences for ELYXYB for the acute treatment of migraine with or without aura in Canada.

Our development pipeline consists of three product candidates, (i) SP-102 (“SEMDEXA”) (10 mg, dexamethasone sodium phosphate viscous gel), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain or sciatica, which is in the second Phase 3 study initiated in September 2025, (ii) SP-103 (lidocaine topical system) 5.4% (“SP-103”), a Phase 2, next-generation, triple-strength formulation of ZTlido for the treatment of chronic neck pain associated with muscle spasms and for which we have completed a Phase 2 trial in acute low back pain (“LBP”), and (iii) SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride formulation for the treatment of fibromyalgia, for which Phase 1 trials were completed.

SEMDEXA has been granted fast track designation by the FDA and, if approved, could become the first FDA-approved alternative to off-label epidural steroid injections, which are administered over 12 million times annually in the United States.

We have completed a pivotal Phase 3 study with final results received in March 2022, which results reflected achievement of primary and secondary endpoints.

We have completed a pivotal Phase 3 study with final results received in March 2022, which results reflected achievement of primary and secondary endpoints, and initiated the second Phase 3 study in September 2025.

SP-103 has also been granted fast track designation by the FDA for LBP.

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SP-103 was safe and well tolerated.

Increase of lidocaine load in topical system by three times, compared with approved ZTlido, 5.4% vs.

The increase of lidocaine load in topical system by three times, compared with approved ZTlido, 5.4% vs.

1.8%, did not result in signs of systemic toxicity or increased application site reactions with daily applications over one month treatment.

We will continue to analyze the SP-103 Phase 2 trial data along with an investigator study of ZTlido in patients with neck pain completed in the second half of 2023, which also has shown promising top-line efficacy and safety results.

SP-103, if approved, could become the first FDA-approved lidocaine topical product for the treatment of acute pain.

SP-103, if approved, could become the first FDA-approved lidocaine topical product for the treatment of chronic neck pain associated with muscle spasms.

SP-103 is a triple-strength lidocaine topical system designed to deliver a dose of lidocaine three times higher than any lidocaine topical product that we are aware of, either approved or in development.

We are examining SP-103 as a treatment for chronic neck pain associated with muscle spasms, a condition with high unmet need which we expect could affect over 20 million patients in the United States as of 2023.

On October 20, 2024, we announced

the successful end of a Phase 2 meeting with the FDA, leading to an agreed path forward to a new drug application (including other marketing applications, an “NDA”) for our product candidate, SP-103.

We currently contract with third parties for the manufacture, assembly, testing, packaging, storage and distribution of our products.

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Cardinal Health 105 purchased and shipped ZTlido to customer wholesale distribution centers.

Cardinal Health 105 also performed order management services on our

Cardinal Health 105 also performed order management services on our behalf.

On April 2, 2022, we announced the expansion of our direct distribution network to national and regional wholesalers and pharmacies.

Cardinal Health 105 will continue to provide traditional third-party logistics functions for us.

Since our inception, we have invested substantial efforts and financial resources on acquiring product and technology rights while building our intellectual property portfolio and infrastructure.

Since our inception, we have invested substantial efforts and financial resources into acquiring product and technology rights while building our intellectual property portfolio and infrastructure.

In June 2022, we in-licensed the exclusive right to commercialize GLOPERBA oral solution, an FDA-approved prophylactic treatment for painful gout flares in adults, in the U.S.

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We have incurred significant operating losses as a result of such investment efforts, including the development of SEMDEXA, conducting of Phase 3 trials for SEMDEXA, and the development of SP-103 and SP-104.

Our ability to generate revenue sufficient to achieve profitability will depend on the successful commercialization of our products, ZTlido, GLOPERBA and ELYXYB, and the development of our product candidates.

Our ability to generate sufficient revenue to achieve profitability will depend on the successful commercialization of our products, ZTlido, GLOPERBA and ELYXYB, and the development of our product candidates.

We had a net loss of $374.1 million and $72.8 million for the years ended December 31, 2025, and 2024, respectively.

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If adequate funds on acceptable terms are not available when needed, we may be required to reduce the scope of the commercialization of ZTlido, GLOPERBA and ELYXYB or delay, scale back or discontinue the development of one or more of our product candidates.

We have adopted a cryptocurrency treasury strategy in which we intend to invest in bitcoin, Ethereum and other blockchain-linked cryptocurrencies.

We intend to accumulate such cryptocurrencies as a long-term treasury asset.

Our goal is to acquire and grow our overall cryptocurrency position and utilize professional treasury strategies to both increase our cryptocurrency holdings, while driving revenue via a range of staking and related yield-generating activities.

In the future, we plan to evaluate additional cryptocurrency holdings and transactions, including but not limited to strategic investments and/or acquisitions of operating companies that we view as aligned with our cryptocurrency treasury strategy.

On September 25, 2025, we entered into a Securities Purchase Agreement (the “Datavault SPA”) with Datavault AI Inc., a Delaware corporation (“Datavault”), pursuant to which Datavault agreed to issue and sell, and we agreed to purchase, 15.0 million shares (the “Datavault Shares”) of common stock of Datavault (“Datavault Common Stock”) in the initial closing which occurred on September 26, 2025 (the “Initial Datavault Closing”) and a pre-funded warrant (the “Datavault Pre-Funded Warrant”) to purchase 263,914,094 shares of Datavault Common Stock in a subsequent closing (the “Subsequent Closing”), for an aggregate purchase price of $150 million in Bitcoin (“BTC”) (based on the spot exchange rate for BTC as published by Coinbase.com at 8:00 p.m.

(New York City time) on the trading day immediately prior to the date of the Initial Datavault Closing, or September 25, 2025 (such rate, the “Spot Exchange Rate”)).

Pursuant to the Datavault SPA, the Subsequent Closing was subject to the satisfaction of the condition that the stockholders of Datavault approve the issuance of the shares of Datavault Common Stock underlying the Datavault Pre-Funded Warrant.

On November 24, 2025, Datavault obtained such stockholder approval at its annual meeting.

On November 25, 2025, the Subsequent Closing was consummated with us transferring an amount of BTC (based on the Spot Exchange Rate) in satisfaction of the payment of the remainder of the aggregate purchase price to Datavault and Datavault issuing the Datavault Pre-Funded Warrant to us.

On November 25, 2025, following

the Subsequent Closing, we exercised the Datavault Pre-Funded Warrant in full for an aggregate exercise price of approximately $26.4 thousand, paid in cash.

Recent Developments

Deferral and Consent under Tranche B Senior Secured Convertible Note

Pursuant to the Tranche B Notes, commencing on January 2, 2025 (the “First Amortization Payment Date”), we are required to redeem in cash (the “First Amortization Payment”) such portion of the principal amount of the Tranche B Notes equal to each Tranche B Noteholder’s Holder Pro Rata Amount (as defined in the Tranche B Notes) of $6,250,000 per fiscal quarter at a redemption price equal to 100% of such Amortization Amount (as defined in the Tranche B Notes).

On January 2, 2025, we entered into a deferral and consent letter with each of (i) Nomis Bay Ltd and BPY Limited (the “Nomis Bay Consent”), (ii) Oramed (the “Oramed Consent”) and (iii) 3i, LP (the “3i Consent” and, together with the Nomis Bay Consent and the Oramed Consent, the “Tranche B Consents”), respectively, pursuant to which the Tranche B Noteholders agreed to defer our obligation to make the First Amortization Payment until January 31, 2025.

In consideration of such deferral, and to limit the Tranche B Noteholders’ right to exercise certain secured creditor remedies (including recourse against the assets of SCLX JV as a grantor under the Security Agreement (as defined in the Tranche B Consents)), SCLX JV delivered to the Tranche B Noteholders (or their designee) by deposit/withdrawal at custodian with the Depository Trust Company an aggregate of 5,000,000 Scilex Shares (as defined in, and contemplated pursuant to, the Term Sheet that is an exhibit to the Tranche B Consents (the “Term Sheet”)) held by SCLX JV, of which 2,500,000 shares were delivered to Oramed, 720,000 shares were delivered to BPY Limited, 1,280,000 shares were delivered to Nomis Bay Ltd, and 500,000 shares were delivered to 3i, LP.

In addition, pursuant to the Tranche B Consents, effective as of the latest of (i) the time of execution and delivery of the Tranche B Consents, (ii) the time of the delivery of the Scilex Shares and (iii) the time of grant of the Royalty and Exclusive Rights (each as defined in, and contemplated pursuant to, the Term Sheet), the Tranche B Noteholders agreed to further defer our obligation to make the First Amortization Payment until October 8, 2026, provided that, as contemplated in the Term Sheet, we pay an aggregate of $1.1 million in respect of a portion of the First Amortization Payment and related make-whole interest (which amount has been paid).

The Term Sheet provided that we and the Tranche B Noteholders would enter into an agreement pursuant to which the Tranche B Noteholders shall collectively receive a 10 year, assignable, freely transferable, 4% royalty on the worldwide Net Sales (as defined

therein) of GLOPERBA and ELYXYB, excluding sales of ELYXYB in Canada.

Please see section below titled “ Gloperba-Elyxyb Royalty Purchase Agreement ” for a description of such royalty agreement entered into by us.

Amendment to the Oramed Note

On January 21, 2025, we entered into an amendment letter with Oramed (the “Oramed Amendment”), pursuant to which, among other things, Oramed agreed to extend the Maturity Date under and as set forth in the Oramed Note from March 21, 2025 to December 31, 2025.

In consideration of such extension, SCLX JV agreed to deliver to Oramed an aggregate of 3,250,000 shares of Common Stock held by SCLX JV.

ZTlido Rest of World License Agreement

On February 22, 2025 (the “ Lido Effective Date ”), Scilex Pharma entered into a License Agreement (the “ Lido License Agreement ”) with RoyaltyVest Ltd.

(the “ Licensee ”) with respect to services, compositions, products, dosages and formulations comprising lidocaine that have been or are later developed by or on behalf of Scilex Pharma, including the product and any future product defined as a “Product” under Scilex Pharma’s existing (i) Product Development Agreement, dated as of May 11, 2011, with Oishi and Itochu, as amended, and (ii) the associated Commercial Supply Agreement, dated February 16, 2017, between Scilex Pharma, Oishi and Itochu, as amended, which include (a) ZTlido (lidocaine topical system) 1.8%, including the composition of matter with the NDC 69557-111-30 and (b) SP-103 (collectively, the “ Lido Product ”).

The Lido License Agreement supersedes and replaces the that certain Rest of World License Term Sheet parties entered into on October 8, 2024.

Under the Lido License Agreement, Scilex Pharma granted to the Licensee during the Lido License Term (as defined below) a worldwide (other than the United States and certain territories stated in the Lido License Agreement), exclusive, non-transferable right, license and interest in, to, and under all Product Rights Controlled (each as defined therein) by Scilex Pharma to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit all Lido Products, in all cases solely for commercialization of the Lido Products outside of the United States and certain territories stated in the Lido License Agreement (the “ Lido Licensee Territory ”).

The Licensee granted to Scilex Pharma a non-exclusive, non-transferable, right and license under the Licensee Non-Blocking Patents (as defined therein) (i) in the Licensor Territory (as defined therein), to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit Lido Product for commercialization of Lido Products in the Licensor Territory in the Field (each as defined therein), and (ii) worldwide, to develop and manufacture Lido Product for commercialization in the Licensor Territory in the Field (each as defined therein).

Each of the Licensee and Scilex Pharma will receive 50% of the Net Revenue (as defined therein) generated, and the Licensee shall effect the foregoing by paying to Scilex Pharma its share of the Net Revenue on a quarterly basis.

Pursuant to the Lido License Agreement, the Licensee shall (i) use commercially reasonable efforts to obtain and maintain regulatory approval for the Lido Product in at least one Major Market Country (as defined therein) within 18 months after the Lido Effective Date, and (ii) commit $200,000, or its equivalent in kind, annually towards such efforts until it obtains regulatory approval for the Lido Product in the Lido Licensee Territory.

Scilex Pharma shall use commercially reasonable and diligent efforts to obtain and maintain regulatory approvals for SP-103 and all existing Lido Products in each country or jurisdiction in the Licensor Territory (as defined therein).

Promptly after the Lido Effective Date, Scilex Pharma is required to (i) facilitate an introduction between Oishi, Itochu, and the Licensee, and (ii) use reasonable efforts to cause each of Oishi and Itochu to accept a direct engagement with the Licensee for the manufacturing or supply of the Lido Product in finished dosage form.

In addition, Scilex Pharma agreed to appoint the Licensee as its exclusive distributor of the Lido Product in the Licensee Territory during the Lido License Term.

The term of the Lido License Agreement commences on the Lido Effective Date and continues until expiration of the last to expire Licensed Patents (as defined therein), unless earlier terminated (the “ Lido License Term ”).

Parent Guarantee for Lido License Agreement

On February 22, 2025, in connection with Lido License Agreement, we entered into that certain Parent Guarantee for Lidocaine License Agreement (the “ Parent Guarantee ”) with the Licensee, pursuant to which we agreed to guarantee the due and proper performance of Scilex Pharma’s obligations under the Lido License Agreement on the terms and conditions set forth in the Parent Guarantee.

Pursuant to the terms of the Parent Guarantee, we shall provide the Licensee with written notice of any Change of Control (as defined therein) of

Scilex Pharma within five business days after the consummation of such Change of Control, and the Parent Guarantee and the guarantee obligations shall automatically terminate upon the consummation of such Change of Control.

Gloperba-Elyxyb Royalty Purchase Agreement

As contemplated by the Term Sheet in respect of the Royalty and Exclusive Rights described therein, on February 28, 2025 (the “Gloperba-Elyxyb Closing Date”), we entered into a Purchase and Sale Agreement (the “Gloperba-Elyxyb Royalty Purchase Agreement”) with Scilex Pharma, certain institutional investors (collectively, the “Gloperba-Elyxyb Royalty Investors”) and Oramed (together with the Gloperba-Elyxyb Royalty Investors, the “Gloperba-Elyxyb RPA Purchasers”).

Pursuant to the Gloperba-Elyxyb Royalty Purchase Agreement, Scilex Pharma sold to the Gloperba-Elyxyb RPA Purchasers the right to receive 4% of all aggregate net sales worldwide (the “Gloperba-Elyxyb Purchased Receivables”) with respect to Gloperba, Elyxyb, and any related, improved, successor, replacement and/or varying dosage forms of the foregoing (the “Gloperba-Elyxyb Covered Products”).

In consideration of the Further Deferral and representing the “grant of the Royalty and Exclusive Rights” (as defined in the Term Sheet), during the period commencing on the Gloperba-Elyxyb Closing Date and expiring on the tenth anniversary of the Gloperba-Elyxyb Closing Date (the “Gloperba-Elyxyb Payment Term”), Scilex Pharma shall pay to each Gloperba-Elyxyb RPA Purchaser, by wire transfer of immediately available funds in U.S.

dollars to such Gloperba-Elyxyb RPA Purchaser’s account such Gloperba-Elyxyb RPA Purchaser’s Specified Percentage (as defined in the Gloperba-Elyxyb Royalty Purchase Agreement) of the Covered Product Revenue Payments (each as defined in the Gloperba-Elyxyb Royalty Purchase Agreement) for each calendar quarter (commencing with the calendar quarter beginning January 1, 2025) promptly, but in any event no later than 60 calendar days after the end of each calendar quarter.

The Gloperba-Elyxyb Royalty Purchase Agreement shall terminate six months following receipt by the Gloperba-Elyxyb RPA Purchasers of all payments of the Purchased Receivables to which each Gloperba-Elyxyb RPA Purchaser is entitled during the Payment Term.

Royalty Security Agreement

Pursuant to the terms of the Gloperba-Elyxyb Royalty Purchase Agreement, we entered into a Security Agreement with Scilex Pharma and the collateral agent (as identified therein) for the benefit of the Gloperba-Elyxyb RPA Purchasers, dated as of February 28, 2025 (the “Gloperba-Elyxyb Royalty Security Agreement”).

Under the Gloperba-Elyxyb Royalty Security Agreement, each of our and Scilex Pharma’s due performance and payment under the Gloperba-Elyxyb Royalty Purchase Agreement is secured by certain collateral, including a collection account and certain material contracts, intellectual property rights and regulatory approvals, in each case related to the Gloperba-Elyxyb Covered Products.

Subordination Agreement

In connection with the Gloperba-Elyxyb Royalty Purchase Agreement and the Gloperba-Elyxyb Royalty Security Agreement, we entered into that certain Subordination Agreement, dated as of February 28, 2025 (the “Gloperba-Elyxyb Subordination Agreement”), by and among us, Scilex Pharma the Gloperba-Elyxyb RPA Purchasers and the Note Agent (each as defined in the Subordination Agreement).

Pursuant to the Gloperba-Elyxyb Subordination Agreement, the parties agreed that all obligations, liabilities and indebtedness under the Gloperba-Elyxyb Royalty Purchase Agreement are secured by first priority liens on the collateral under the Gloperba-Elyxyb Royalty Security Agreement (the “Gloperba-Elyxyb Royalty Collateral”) and the Note Agent’s lien on the Gloperba-Elyxyb Royalty Collateral is subordinated and becomes a second priority lien.

Amendment No.

1 to ZTlido Royalty Purchase Agreement

On February 28, 2025, we and Scilex Pharma entered into an Amendment No.

1 to Purchase and Sale Agreement (the “ZTlido Royalty Amendment”) with the purchasers (the “ZTlido Royalty Purchasers”) under that certain Purchase and Sale Agreement, dated as of October 8, 2024 (the “ZTlido Royalty Purchase Agreement”).

Pursuant to the Royalty Amendment, we and Scilex Pharma may assign our respective rights or delegate our respective obligations under the ZTlido Royalty Purchase Agreement without the prior written consent of the Purchasers if we receive a commitment, contingent upon an asset purchase of Covered Products (as defined in the ZTlido Royalty Purchase Agreement), that would allow us to pay in full all obligations owed under the Debt Instruments (as defined therein),

provided that such purchaser of Covered Products agrees to assume all of the obligations of our company and Scilex Pharma under the ZTlido Royalty Purchase Agreement.

Gloperba Rest of World License Agreement

On February 28, 2025 (the “Effective Date”), we entered into a License Agreement (the “Gloperba License Agreement”) with Scilex Pharma and the Licensee with respect to (i) services, compositions, products, dosages and formulations comprising Gloperba that have been or are later developed by or on behalf of us, including the product and any future product defined as a “Licensed Product” under the Romeg License Agreement, as amended and as may be further amended or restated from time to time, and (ii) any related, improved, successor or replacement forms of any such product Controlled (as defined therein) by us ((i) and (ii) collectively, the “Gloperba Product”).

Under the Gloperba License Agreement, we granted to the Licensee during the Gloperba License Term (as defined below) a worldwide, exclusive, non-transferable (except in connection with a permitted assignment of the Gloperba License Agreement) right, license and interest in, to, and under all Product Rights Controlled (each as defined therein) by us to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit all Gloperba Products, in all cases solely for commercialization of the Gloperba Products outside of the United States in the Field (as defined therein).

The Licensee granted to us a non-exclusive, non-transferable (except in connection with a permitted assignment of the Gloperba License Agreement), right and license under the Licensee Non-Blocking Patents (as defined therein) (i) in the United States, to develop, manufacture, obtain and maintain regulatory approvals for, commercialize and otherwise exploit Gloperba Product for commercialization of Gloperba Products in the United States in the Field (as defined therein), and (ii) worldwide, to develop and manufacture Gloperba Product for commercialization in the United States in the Field (as defined therein).

Each of the Licensee and we will receive 50% of the Net Revenue (as defined therein) generated based on Licensee’s sale of the Gloperba Products, and the Licensee shall effect the foregoing by paying to us an amount required for us to receive its share of the Net Revenue on a quarterly basis.

Pursuant to the Gloperba License Agreement, the Licensee shall obtain and maintain regulatory approval for the Gloperba Product outside of the United States in accordance with its own business judgment and in its sole and absolute discretion.

Promptly after the Effective Date, we are required to (i) facilitate an introduction between the Licensee and our contract manufacturer of the Gloperba Product (the “Gloperba CMO”) as of the Effective Date, and (ii) use reasonable efforts to cause such Gloperba CMO to accept a direct engagement with the Licensee for the manufacturing or supply of the Gloperba Product in finished dosage form.

In addition, we agreed to appoint the Licensee as its exclusive distributor of the Gloperba Product in the entire world other than the United States during the Gloperba License Term.

The term of the Gloperba License Agreement commences on the Effective Date and continues until expiration of the last to expire Licensed Patents (as defined therein), unless earlier terminated (the “Gloperba License Term”).

Sorrento Chapter 11 Filing

On February 13, 2023, Sorrento Therapeutics, Inc.

(“Sorrento”), together with its wholly owned direct subsidiary, Scintilla Pharmaceuticals, Inc., commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

The 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 we were previously majority-owned by Sorrento, we were not a debtor in Sorrento’s voluntary Chapter 11 filing.

Pursuant to that certain Stock Purchase Agreement that we entered into with Sorrento on September 21, 2023 (the “the Sorrento SPA”), we repurchased shares of our Common Stock and Series A Preferred Stock from Sorrento.

As a result, Sorrento no longer holds a majority of the voting power of our outstanding capital stock entitled to vote.

As of December 31, 2024, we had a $3.2 million receivable from Sorrento, which was fully reserved.

We evaluate the collectability of this receivable on a quarterly basis.

Vivasor Business Combination

On December 5, 2025 (the “VHC Transaction Date”), the Company entered into a Share Transfer Agreement with EAR SPV LLC, a Delaware corporation (“EAR SPV”) and Vivasor Holding Company (“VHC”), a privately held biotechnology company, pursuant to which, among other things, EAR SPV agreed to sell, and the Company agreed to buy, all 6,101,468 shares of VHC’s Series A-1 Preferred Stock, par value $0.00001 per share, held by EAR SPV, for an aggregate purchase price of $9.0 million (“VHC Business Combination”).

The Company evaluated VHC under the VIE model in accordance with ASC 810 and accounted for the transaction as a business combination using the acquisition method of accounting in accordance with ASC 805.

The identifiable assets acquired and liabilities assumed of VHC were recorded at their estimated fair values as of the VHC Transaction Date.

Q Scan Convertible Promissory Note

On January 29, 2026, we entered into a convertible promissory note (the “Q Scan Note”) with Quantum Scan Holdings, Inc.

Pursuant to the Q Scan Note, the Company loaned Q Scan an aggregate of $20 million.

The Q Scan Note had a maturity date of October 29, 2026, and would commence accruing interest at a rate of 3.66% per annum commencing on April 29, 2026.

The Company and Q Scan entered into a common stock purchase agreement, dated January 29, 2026 (the “Q Scan Stock Purchase Agreement”).

Pursuant to the Q Scan Stock Purchase Agreement, Q Scan agreed to sell to the Company, and the Company agreed to purchase from Q Scan, an aggregate of 193,021,436 shares of common stock of Q Scan (the “Q Scan Stock Purchase”) for an aggregate purchase price of approximately $27.5 million.

The closing of the Q Scan Stock Purchase shall occur within five business days of written notice delivered by Q Scan to the Company.

The Q Scan Stock Purchase Agreement contains customary representations, warranties and covenants of the Company and Q Scan.

Oramed Warrant

On February 19, 2026, we entered into a warrant agreement (the “Oramed Warrant”) with Oramed Pharmaceuticals, Inc.

(“Oramed”) pursuant to which Oramed deferred its right to receive an amortization payment related to the Tranche B Notes in exchange for our issuance of a new warrant to purchase an aggregate of 100,000 shares of Common Stock (the “February 2026 Warrant”) at an initial exercise price of $20.00 per share.

The deferred amortization payment was made to Oramed in November 2025.

For more information, please see the sections titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Tranche B Notes ” and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Oramed Warrant .”

Components of Our Results of Operations

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Selling, general and administrative expenses consist primarily of costs related to our contract sales force, salaries and other related costs, including stock-based compensation, for personnel in our executive, marketing, finance, corporate and business development and administrative functions.

Selling, general and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services, travel expenses and facility-related expenses, which include direct depreciation costs, and allocated expenses from Sorrento for director and officer insurance as well as employee health benefits through the consummation of the transactions pursuant to the Sorrento SPA.

We expect that our selling, general and administrative expenses will vary year over year in the future as we adapt our commercial strategies to changes in the business environment.

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We also expect to adjust the size of our administrative, finance and legal functions to adapt to the changes above and the anticipated growth of our business.

Goodwill Impairment

Goodwill impairment is recorded in connection with the impairment testing of our goodwill, and is performed at least annually and more frequently if changes in facts and circumstances indicate that the fair value of our reporting units may be less than their carrying amount.

In connection with the preparation of our financial statements for the fourth quarters of 2025, we performed quantitative goodwill impairment tests which resulted in a total goodwill impairment of $73.4 million related to business combination with Vivasor.

See Note 7 to our consolidated financial statements for additional information.

Intangible Amortization

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Change in Fair Value of Debt and Liability Instruments

Change in fair value of debt and liability instruments includes the remeasurement of (i) the convertible debentures (the “Convertible Debentures”) issued to YA II, Ltd.

(“Yorkville”) pursuant to that certain securities purchase agreement dated as of March 21, 2023 and amended on October 11, 2023, between Yorkville and us, (ii) the senior secured promissory note to Oramed Pharmaceuticals Inc.

(“Oramed”) issued in September 2023 in the principal amount of $101.9 million (the “Oramed Note”), (iii) the non-refundable deposit in the aggregate principal amount of $10.0 million (the “FSF Deposit”) pursuant to that certain Commitment Side Letter (the “Commitment Letter”) dated as of June 11, 2024, entered into with FSF 33433 LLC (“FSF Lender”), (iv) senior secured convertible notes issued in October 2024 in the principal amount of $50.0 million (the “Tranche B Notes”) and (v) the purchased revenue liability associated with the ZTlido Royalty Purchase Agreement with certain institutional investors (collectively, the “ZTlido Royalty Investors”) and Oramed.

Change in fair value of debt and liability instruments includes the remeasurement of the (i) Oramed Note with $7.7 million principal amount outstanding as of December 31, 2025, (ii) non-refundable deposit in the aggregate principal amount of $10.0 million (the “FSF Deposit”) and satisfied in November 2024 by the delivery of the Additional Product to Endeavor, (iii) senior secured convertible notes issued in October 2024 in the principal amount of $50.0 million (the “Tranche B Notes”) with $17.9 million principal amount outstanding as of December 31, 2025, and (iv) purchased revenue liability associated with the Purchase and Sale Agreement (the “ZTlido Royalty Purchase Agreement”) that we entered into in October 2024 with certain institutional investors (collectively, the “ZTlido Royalty Investors”) and Oramed and (v) purchased revenue liability associated with the Purchase and Sale Agreement (the “Gloperba-Elyxyb Royalty Purchase Agreement”) that we entered into in February 2025 with certain institutional investors (collectively, the “Gloperba-Elyxyb Royalty Investors”) and Oramed.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

(Gain) loss on Debt Extinguishment

(Gain) loss on debt extinguishment related to (gain) loss related to debt extinguishment during the period.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Interest Expense, Net

Interest expense, net consists of interest related to the loans in an aggregate principal amount of up to $30.0 million (the “Revolving Facility”) made available by eCapital Healthcare Corp.

Interest expense, net for the twelve months ended December 31, 2025, primarily consists of interest on Scilex-St.

James Loans, Vivasor debts, interest on the balances due for government and commercial rebate programs, and interest related to the deferred consideration for GLOPERBA license acquired from Romeg in 2022.

Government rebate programs include state Medicaid drug rebate programs and commercial rebate programs relate to contractual agreements with commercial healthcare providers, under which we pay rebates for access to and position on that provider’s patient drug formulary.

Interest expense, net for the twelve months ended December 31, 2024 consists of interest related to the loans in an aggregate principal amount of up to $30.0 million (the “Revolving Facility”) made available by eCapital Healthcare Corp.

pursuant to a Credit and Security Agreement (the “eCapital Credit Agreement”) that “Scilex Pharma”, entered into on June 27, 2023.

Loss on Foreign Currency Exchange

Loss on foreign currency exchange relates to foreign exchange losses on payments made to our foreign supplier, Itochu, a manufacturer and supplier of lidocaine tape products, including ZTlido and SP-103.

(Gain) Loss on Foreign Currency Exchange

(Gain) Loss on foreign currency exchange relates to foreign exchange (gain) losses on payments made to our foreign supplier, “Itochu”, a manufacturer and supplier of lidocaine tape products, including ZTlido and SP-103.

Unrealized (Gain) Loss on Digital Assets, net

Unrealized (Gain) Loss on digital assets related to unrealized (gain) losses on our digital assets held during the period.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Realized (Gain) Loss on Digital Assets, net

Realized (Gain) Loss on digital assets related to realized (gain) losses on our digital assets held during the period.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Equity and Equity method investments

Unrealized (Gain) Loss on Equity Investments, net

Unrealized (Gain) Loss on equity investments related to unrealized (gain) losses on our investment in Datavault held during the period, prior to obtaining significant influence.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Realized (Gain) Loss on Equity Investments, net

Realized (Gain) Loss on equity investments related to realized (gain) losses on our investment in Datavault held during the period, prior to obtaining significant influence.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

The Company utilizes the equity method to account for investments when the Company has the ability to exercise significant influence, but not control over the investees.

In determining whether the Company has significant influence, the Company considers its ownership

levels, whether it has the right to nominate board members, and whether it has the ability to participate in the policy-making process of the investee, among other criteria.

Investments granting significant influence are generally accounted for using the equity method unless the fair value option is elected.

Unrealized (Gain) Loss on Equity Method Investments, net

Unrealized (Gain) Loss on equity method investments (or “EMI”) related to unrealized (gain) losses on our investment in Datavault accounted for using the equity method.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Realized (Gain) Loss on Equity Method Investments, net

Realized (Gain) Loss on equity method investments (or “EMI”) related to realized (gain) losses on our investment in Datavault accounted for using the equity method.

See Note 5 titled “Fair Value Measurements” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Results of Operations

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Selling, general and administrative

Goodwill impairment

Intangible amortization

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Change in fair value of debt and liability instruments

Loss on debt extinguishment, net

Interest expense, net

Loss on foreign currency exchange

Unrealized loss on digital assets, net

Realized loss on digital assets, net

Unrealized (gain) on equity investment, net

Realized (gain) on equity investments, net

Unrealized (gain) on equity method investments carried at fair value, net

Realized (gain) on equity method investments carried at fair value, net

Realized (gain) on securities

Total other (income) expense, net

Loss before income taxes

Income tax (benefit) expense

Income tax expense (benefit)

Comparison of the Years Ended December 31, 2025, and 2024:

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Year Ended December 31,

Vivasor Contract Revenue

Total Net Revenue

Net revenue for the years ended December 31, 2025 and 2024 was $30.3 million and $56.6 million, respectively.

The increase of $9.9 million was comprised of $5.8 million, $3.8 million and $0.2 million increase in net product sales of ZTlido, ELYXYB and GLOPERBA, respectively, with GLOPERBA sales commencing in June 2024.

The increase in net sales of ZTlido and ELYXYB was driven by an increase in gross sales by approximately 6% and 49%, respectively, as a result of an increase in the sales volume due to higher demand and a standard industry annual price increase, partially offset by an increase in rebates.

The commercial launch of ELYXYB has been met with a strong response from the prescribing community since its commercial launch in April 2023 and continued to show growth during 2024, the first full year of commercialization.

The decrease of $26.3 million comprised of $26.4 million, $0.5 million and $0.1 million decrease in net product sales of ZTlido, ELYXYB and GLOPERBA, respectively, with GLOPERBA sales commencing in June 2024.

The decrease in net sales of ZTlido and ELYXYB was driven by a decrease in gross sales of approximately 26% and 7%, respectively, as a result of a decrease in the sales volume and a decrease in sales rebate for inflation, partially offset by an increase in sales returns and a standard industry annual price increase, effective January 1, 2025.

Cost of Revenue

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Total GLOPERBA

Vivasor Contract Revenue

Cost of Revenue - Services

Total Vivasor Contract Revenue

Total Cost of Revenue

Cost of revenue for the years ended December 31, 2025 and 2024 was $10.6 million and $16.7 million, respectively.

Cost of revenue for ZTlido increased by $0.5 million due to higher royalties primarily driven by an increase in gross product sales by approximately 6%, partially offset by a decrease due to favorable foreign currency exchange rate fluctuations affecting purchases from our foreign supplier, Itochu, and decrease in logistics costs due to the absence of air shipments in 2024 compared to 2023.

Cost of revenue for ELYXYB increased by $0.5 million and was primarily due to the increase in gross product sales by approximately 49% with the sales commencing in April 2023.

GLOPERBA sales commenced in June 2024.

Cost of revenue for ZTlido decreased by $7.1 million due to decrease in gross product sales of approximately 25%, driven by decrease in sales demand.

Research and Development Expenses

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Contracted R&D

R&D Discovery Project

Contracted R&D

Total Discovery Project

Total Research and Development Expenses

Research and development expenses for the years ended December 31, 2025, and 2024 were $20.7 million and $9.6 million, respectively.

The $3.1 million decrease was primarily attributed to reduced costs of SP-103 due to the completion of the Phase 2 clinical study and reduced development costs of SP-104.

The increase was primarily attributed to higher development costs related to SP-102 and additional expenses related to the development of KDS2010 by Scilex Bio.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 were $266.9 million and $119.0 million, respectively.

The decrease of approximately $0.6 million was primarily due to a $10.1 million decrease in legal fees, a $1.6 million decrease in insurance costs, a $0.4 million decrease in advisory and financing expenses and a $0.2 million decrease as a result of a $1.4 million decrease related to allowance for credit losses that was made in March 2023 for the receivable from Sorrento offset by a $1.2 million increase related to allowances for expected credit losses on accounts receivable, partially offset by a $5.5 million increase in rebate expense related to future shipments of the Additional Product (as defined below) under the Satisfaction Agreement, a $2.9 million increase in contracted services, a $1.7 million increase in personnel expense due to increase in headcount and a merit increase starting January 2024, a $0.5 million increase in travel expenses, a $0.1 million increase in marketing expenses and a $1.0 million increase in other expenses.

The increase of approximately $147.9 million was primarily due to a $148.7 million increase related to issuance costs for reverse recapitalization with Denali and other financing activities, a $18.6 million increase in advisory and financing expenses, a $4.0 million increase in contracted services, a $0.2 million increase in allowances for expected credit losses on accounts receivable, partially offset by a $5.7 million decrease in rebate expense related to future shipments of the Additional Product (as defined below) under the Satisfaction Agreement, a $1.0 million decrease in insurance costs, a $1.3 million decrease in legal fees, a $6.1 million decrease in personnel expense, a $4.1 million decrease in travel expenses, a $5.4 million decrease in marketing expenses.

Goodwill Impairment

In connection with preparing our financial statements for the year ended December 31, 2025, we evaluated the carrying value of goodwill for impairment in response to impairment indicators identified during our business combination with Vivasor.

As such, we performed a quantitative goodwill impairment test on each of our newly consolidated subsidiary and as a result, we concluded that Vivasor had a carrying value that exceeded its estimated fair value.

As a result, we recorded a goodwill impairment charge of $73.4 million during the year ended December 31, 2025, which was the entire goodwill balance for Vivasor.

See Note 7 to our consolidated financial statements for additional information.

Intangible Amortization Expense

Intangible amortization expense for the years ended December 31, 2025 and 2024 was $4.4 million and $4.0 million, respectively.

The decrease of $0.1 million is related to the full amortization of the assembled workforce intangible asset (see Note 6 titled “ Goodwill and Intangible Assets ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Legal Settlements

Legal settlements for the years ended December 31, 2024 and 2023 were $9.4 million and nil, respectively.

The increase was attributed to litigation settlements that were entered into during the first quarter of 2024.

The increase of $0.4 million is related to the amortization of the Datavault acquired license (see Note 7 titled “ Goodwill and Intangible Assets ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Legal Settlements Expense

Legal settlements for the years ended December 31, 2025 and 2024 were $0.3 million and $(9.4 million), respectively.

The increased expense in 2025 compared to 2024 is primarily due to payments received by the Company from the litigation settlement that was entered into during the first quarter of 2024.

See Note 13 titled “ Commitments and Contingencies ” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

(Gain) Loss on Derivative Liability

(Gain) loss on derivative liability for the years ended December 31, 2024 and 2023 was ($17.4) million and $0.5 million, respectively.

The gain recognized during the year ended December 31, 2024 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants (each as defined below).

The loss recognized during the year ended December 31, 2023 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants.

(Gain) loss on derivative liability for the years ended December 31, 2025 and 2024 were $22.7 million and ($17.4 million), respectively.

The loss recognized during the year ended December 31, 2025 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants, the December 2024 RDO Common Warrants, the Exchange Warrants (as defined below), September 2025 Warrants and November 2025 Warrants (each as defined below).

Change in Fair Value of Debt and Liability Instruments

Change in fair value of debt and liability instruments for the years ended December 31, 2025 and 2024 was $25.4 million and $4.8 million, respectively.

The loss recognized during the year ended December 31, 2024 was attributed to losses of $35.0 thousand for the Convertible Debentures, $3.6 million for the Oramed Note, $4.7 million for the FSF Deposit, $0.9 million for the purchased revenue liability pursuant to the ZTlido Royalty Purchase Agreement and a $2.6 million loss recognized upon issuance of the Tranche B Notes, partially offset by a gain of $6.6 million in change in fair value of the Tranche B Notes and $0.4 million gain on partial extinguishment of the Oramed Note pursuant to the Oramed Letter Agreement.

The loss recognized during the year ended December 31, 2025 was attributed to losses of $8.4 million for the Oramed Note, $2.4 million for the purchased revenue liability pursuant to the ZTlido Royalty Purchase Agreement, $1.8 million for the purchased revenue liability pursuant to the Gloperba-Elyxyb Royalty Purchase Agreement, totaling $4.4 million, a $12.9 million in change in fair value of the Tranche B Notes and a $0.3 million gain in change in fair value remeasurement gain related to the termination of the Tumim Purchase Agreement.

The loss recognized during the year ended December 31, 2024, was attributed to losses of $4.4 million for the Convertible Debentures and $2.8 million for the Oramed Note.

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The Tranche B Notes were issued in October 2024 in the principal amount of $50.0 million, of which the principal amount of $17.5 million remained outstanding as of December 31, 2025.

The Scilex-St.

James Loans were received in December 2025 in the principal amount of $22.6 million, of which the principal amount $22.6 million remained outstanding as of December 31, 2025.

(Gain) loss on debt extinguishment, net

(Gain) loss on debt extinguishment, net for the years ended December 31, 2025 and 2024 was $7.4 million and nil, respectively.

Loss recognized during the year ended December 31, 2025 was attributed to the loss associated with the exchange of October 2024 Warrant

for the Exchange Warrants (as defined below), and exchange of April 2024 RDO Common Warrants and December 2024 RDO Common Warrants for the November 2025 Warrants (each as defined below).

Interest Expense, Net

Interest expense, net for the years ended December 31, 2025 and 2024 was $11.5 million and $2.0 million, respectively.

The increase was attributed to $0.8 million of interest related to the Revolving Facility and $0.1 million of interest related to deferred consideration for GLOPERBA license acquired from Romeg in 2022.

Interest expense of $11.5 million primarily consists of interest on the balances due for government and commercial rebate programs.

Interest expense of $2.0 million consists of interest related to the Revolving Facility.

Unrealized (Gain) Loss on Digital Assets, net

Unrealized loss on digital assets for the years ended December 31, 2025 and 2024 was $12.2 million, and nil, respectively.

The unrealized loss during the twelve months ended December 31, 2025, was attributed to the unrealized loss on digital assets held, which had depreciated in value.

Realized (Gain) Loss on Digital Assets, net

Realized loss on digital assets for the years ended December 31, 2025 and 2024 was $30.2 million, and nil, respectively.

The realized loss during the twelve months ended December 31, 2025, was attributed to the realized loss on digital assets sold, which had depreciated in value.

Unrealized (Gain) Loss on Equity Investments, net

Unrealized (gain) on equity investments for the year ended December 31, 2025 and 2024 was $2.7 million and nil, respectively.

The unrealized (gain) during the twelve months ended December 31, 2025, was attributed to the unrealized (gain) on Datavault investment held that had appreciated in value.

Realized (Gain) Loss on Equity Investments, net

Realized (gain) on equity investments for the year ended December 31, 2025 and 2024 was $19.2 million and nil, respectively.

The realized (gain) during the twelve months ended December 31, 2025, was attributed to the realized (gain) on Datavault investment sold that had appreciated in value.

Unrealized (Gain) Loss on Equity Method Investments, net

Unrealized (gain) on equity method investments for the year ended December 31, 2025 and 2024 was $54.8 million and nil, respectively.

The unrealized (gain) during the twelve months ended December 31, 2025 was attributed to the unrealized (gain) on Datavault investment held that had appreciated in value.

Realized (Gain) Loss on Equity Method Investments, net

Realized (gain) on equity method investments for the year ended December 31, 2025 and 2024 was $4.7 million and nil, respectively.

The realized (gain) during the twelve months ended December 31, 2025 was attributed to the realized (gain) on Datavault investment sold that had appreciated in value.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of approximately $5.0 million.

We have funded our operations primarily through the Yorkville financing pursuant to the A&R Yorkville Purchase Agreement (as defined below), the B.

We have funded our operations in the years ended December 2025 and 2024 primarily through equity and debt financings pursuant to the A&R Yorkville Purchase Agreement, and the B.

Riley Purchase Agreement, together as the “Standby Equity Purchase Agreements”) with B.

Riley Principal Capital II, LLC (“B.

Riley”) financing pursuant to the B.

Riley Purchase Agreement (as defined below), the Revolving Facility, the issuance of the Convertible Debentures and financing pursuant to the ATM Sales Agreement (as defined below).

We also have indebtedness pursuant to the Oramed Note and Tranche B Notes as well as deferred consideration related to the GLOPERBA license acquired from Romeg in 2022.

The following table summarizes the aggregate indebtedness of these issuances as of December 31, 2024 and December 31, 2023 (in thousands):

Riley”), the Sales Agreement (the “ATM Sales Agreement”) with B.

Riley Securities, Inc., Cantor Fitzgerald & Co.

Wainwright & Co., LLC (the “Sales Agents”), the Oramed Note and Tranche B Notes, various registered direct offerings and private placements and the Scilex-St.

James Loans, as well as deferred consideration related to the GLOPERBA license acquired from Romeg in 2022.

The following table summarizes the aggregate carrying value indebtedness of these issuances as of December 31, 2025, and December 31, 2024 (in thousands):

December 31, 2025

December 31, 2024

Oramed Note (outstanding principal balance:

Oramed Note (outstanding principal balance and paid in kind interest:

$28.2 million and $25.0 million as of December 31, 2025 and 2024, respectively)

Convertible Debentures (outstanding principal balance:

nil and $4.4 million as of December 31, 2024 and 2023, respectively)

Tranche B Notes (outstanding principal balance:

$38.0 million and nil as of December 31, 2024 and 2023, respectively)

$17.9 million and $38.0 million as of December 31, 2025 and 2024, respectively)

Promissory Notes

Purchased Revenue Liability

Revolving Facility

Deferred Consideration with Romeg

James Loans (outstanding principal balance:

$22.6 million and nil as of December 31, 2025 and 2024, respectively)

Vivasor Related Debt (outstanding principal balance:

$47.0 million and nil as of December 31, 2025 and 2024, respectively)

Total indebtedness

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As of December 31, 2025, the fair value of the Oramed Note outstanding was $28.2 million pursuant to the Scilex-Oramed SPA (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Convertible Debentures

We fully repaid the Convertible Debentures in March 2024 (see Note 7 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Tranche B Notes

As of December 31, 2025, the fair value of the Tranche B Notes outstanding was $17.5 million pursuant to the Tranche B Securities Purchase Agreement (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Promissory Notes

As of December 31, 2025, the carrying value of the Promissory Notes outstanding was $3.5 million pursuant to the Promissory Notes (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Purchased Revenue Liability

As of December 31, 2024, the fair value of the purchased revenue liability was $6.8 million pursuant to the ZTlido Royalty Purchase Agreement (see Note 7 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Revolving Facility

We fully repaid the Revolving Facility in October 2024 (see Note 7 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

As of December 31, 2025, the fair value of the purchased revenue liability was $8.4 million pursuant to the ZTlido Royalty Purchase Agreement and Gloperba-Elyxyb Royalty Purchase Agreement (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Deferred Consideration

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Deferred consideration minimum royalty payments began in July 2023.

Vivasor Related Debt

As of December 31, 2025, the aggregated outstanding principal balance of the Vivasor-related debt was $47.0 million pursuant to the Vivasor-related debt agreement (see Note 8 titled “ Debt ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

As of December 31, 2025, the carrying value of the Scilex-St.

James Loans outstanding was $21.5 million pursuant to the Scilex-St.

James Loan Agreement (see Note 8 titled “ Debt ” and Note 16 titled “ Subsequent Events ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

ZTlido, ELYXYB and GLOPERBA Royalties

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Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25% and 35% to the Developers based on net profits.

During each of the years ended December 31, 2024 and 2023, Scilex Pharma made royalty payments in the amount of $8.3 million.

During each of the years ended December 31, 2025, and 2024, Scilex Pharma made royalty payments in the amount of $6.3 million and $8.3 million, respectively.

As of December 31, 2025, and 2024, Scilex Pharma had ending balances of accrued royalty payables of $2.1 million and $4.0 million, respectively.

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In April 2023, we launched ELYXYB in the U.S.

During the year ended December 31, 2024 and 2023, we made royalty payments in the amount of $0.3 million and $26.0 thousand, respectively.

As of December 31, 2024 and 2023, we had ending balances of accrued royalty payables of $0.1 million and $5.0 thousand, respectively.

During the year ended December 31, 2025, and 2024, we made royalty payments in the amount of $0.2 million and $0.3 million, respectively.

As of December 31, 2025, and December 31, 2024, we had ending balances of accrued royalty payables of $0.2 million and $0.1 million.

In June 2022, we entered into the Romeg License Agreement with Romeg, which agreement was subsequently amended in January 2025, to acquire certain rights to GLOPERBA and the exclusive license to use the trademark “GLOPERBA®”.

As consideration for the license under the Romeg License Agreement, we are obligated to make royalty payments on net sales of GLOPERBA that range from low-single digit to mid-single digit percentages based on annual net sales.

During the years ended December 31, 2024 and 2023, we made royalty payments in the amount of $0.6 million and $0.3 million, respectively.

During each of the years ended December 31, 2025, and 2024, we made royalty payments in the amount of $0.6 million.

Contingent Consideration

We have $280.0 million, $13.0 million and $23.0 million in aggregate contingent consideration obligations in connection with the SEMDEXA, GLOPERBA and SP-104 acquisitions, respectively, that are contingent upon achieving certain specified milestones or the occurrence of certain events.

Contingent consideration obligations are comprised of regulatory milestones and additional payments that will be due upon the achievement of certain amounts of net sales (see Note 3 titled “ Acquisitions and License Agreements ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Standby Equity Purchase Agreements

On November 17, 2022, we entered into a standby equity purchase agreement (the “Original Purchase Agreement”) with Yorkville.

On February 8, 2023, we 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.

Pursuant to the A&R Yorkville Purchase Agreement, we have the right, but not the obligation, to sell to Yorkville up to $500.0 million of shares of Common Stock at our request during the 36 months following the date on which the initial registration statement filed with respect to the shares of Common Stock issuable pursuant thereto was declared effective by the SEC, subject to the terms therein.

The registration statement filed with the SEC in connection with the Original Purchase Agreement was initially declared effective by the SEC on December 9, 2022 and we are now able to offer and sell shares of our Common Stock under that agreement, subject to the limitations set forth therein.

During the year ended December 31, 2024, we have sold 96,982 shares of Common Stock under the A&R Yorkville Purchase Agreement for aggregate net proceeds of approximately $0.2 million.

On, and effective as of, March 25, 2024, we and Yorkville mutually agreed to terminate the A&R Yorkville Purchase Agreement.

On January 8, 2023, we entered into a standby equity purchase agreement (the “B.

Riley Purchase Agreement”, together with the A&R Yorkville Purchase Agreement, the “Standby Equity Purchase Agreements”) with B.

Riley, pursuant to which we had the right, but not the obligation, to sell to B.

Riley up to $500.0 million of shares of Common Stock at our request during the 36 months following the date on which the initial registration statement filed with respect to the shares of Common Stock issuable pursuant thereto was declared effective by the SEC, subject to the terms therein.

The registration statement filed with the SEC in connection with the B.

Riley Purchase Agreement was initially declared effective by the SEC on January 20, 2023 and we were able to offer and sell shares of our Common Stock under that agreement, subject to the limitations set forth therein and the limitations set forth in the Convertible Debentures.

During the year ended December 31, 2024, we did not sell any shares of Common Stock under the B.

Riley Purchase Agreement.

On, and effective as of, February 16, 2024, we and B.

Riley mutually agreed to terminate the B.

Riley Purchase Agreement.

Contingent consideration obligations are comprised of regulatory milestones and additional payments that will be due upon the achievement of certain amounts of net sales (see Note 3 titled “ Acquisitions ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

At-the-Market Sales Agreement

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The Sales Agents were entitled to a commission equal to 3.0% of the gross proceeds from each sale of shares of Common Stock.

We also agreed to reimburse the Sales Agents for certain expenses and provide indemnification and contribution to the Sales Agents against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended.

During the year ended December 31, 2025, no sales of Common Stock had been made under the ATM Sales Agreement.

During the year ended December 31, 2024, we sold 78,976 shares of Common Stock pursuant to the ATM Sales Agreement for net proceeds of approximately $2.7 million.

There were no sales made under the ATM Sales Agreement subsequent to December 31, 2024.

February 2024 Bought Deal Offering

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Pursuant to the February 2024 BDO Underwriting Agreement, we sold, in an underwritten offering (the “February 2024 BDO”), 168,068 shares (the “February 2024 BDO Firm Shares”) of the Common Stock, and accompanying common warrants to purchase up to an aggregate of 168,068 shares of Common Stock (the “February 2024 BDO Firm Warrants”).

Pursuant to the February 2024 BDO Underwriting Agreement, we also granted the Underwriters an option for a period of 30 days from the date of the February 2024 BDO Underwriting Agreement to purchase up to 882,352 additional shares of Common Stock (the “February 2024 BDO Optional Shares”, and together with the February 2024 BDO Firm Shares, the “February 2024 BDO Shares”) and/or common warrants to purchase up to 882,352 shares of Common Stock (the “February 2024 BDO Optional Warrants”, and together with the February 2024 BDO Firm Warrants, the “February 2024 BDO Common Warrants”) that may be purchased by the Underwriters, at a price per February 2024 BDO Optional Share of $1.5548 and a price per February 2024 BDO Optional Warrant of $0.0092, which amounts reflect the public offering price of $1.69 per February 2024 BDO Optional Share and $0.01 per February 2024 BDO Optional Warrant, less underwriting discounts and commissions, as applicable (the “February 2024 BDO Underwriters’ Option”).

The February 2024 BDO Underwriters’ Option was not exercised.

Each Firm Share was sold together with a February 2024 BDO Firm Warrant at a combined public offering price of $1.70.

Each February 2024 BDO Firm Share was sold together with a February 2024 BDO Firm Warrant at a combined public offering price of $59.50.

The combined price per Firm Share and accompanying February 2024 BDO Firm Warrant paid by the Underwriters was $54.74, which amount reflects the combined public offering price of $59.50, less underwriting discounts and commissions.

Subject to certain ownership limitations, the February 2024 BDO Common Warrants are exercisable immediately, will expire on the five-year anniversary of the date of issuance and have an exercise price of $59.50 per share.

The exercise price of the February 2024 BDO Common Warrants is subject to certain adjustments, including (but not limited to) for stock dividends, stock splits, combinations and reclassifications of the Common Stock.

The exercise price of the February 2024

BDO Common Warrants is subject to certain adjustments, including (but not limited to) stock dividends, stock splits, combinations and reclassifications of the Common Stock.

In connection with the February 2024 BDO, pursuant to the February 2024 BDO Underwriting Agreement, we issued to the Representatives warrants (the “February 2024 BDO Representative Warrants”, and together with the February 2024 BDO Common Warrants, the “February 2024 BDO Warrants”) to purchase up to an aggregate of 13,446 shares of Common Stock (which represents 8.0% of the aggregate number of February 2024 BDO Firm Shares sold in the February 2024 BDO).

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We also reimbursed the Placement Agents $100,000 for actual, reasonable and documented fees and expenses, inclusive of fees and expenses of legal counsel and out-of-pocket expenses and $15,950 for clearing expenses.

We also issued to the Placement Agents or their respective designees common warrants, substantially in the form of the April 2024 RDO Common Warrants, to purchase up to 1,200,000 shares of Common Stock (the “April

2024 RDO Placement Agent Warrants” and together with the “April 2024 RDO Common Warrants”, the “April 2024 RDO Warrants”), representing up to 8.0% of the total number of the April 2024 RDO Shares issued in the April 2024 RDO.

We also issued to the Placement Agents or their respective designees common warrants, substantially in the form of the April 2024 RDO Common Warrants, to purchase up to 34,286 shares of Common Stock (the “April 2024 RDO Placement Agent Warrants” and together with the “April 2024 RDO Common Warrants”, the “April 2024 RDO Warrants”), representing up to 8.0% of the total number of the April 2024 RDO Shares issued in the April 2024 RDO.

The April 2024 RDO Placement Agent Warrants have an exercise price of $43.75 per share (which represents 125% of the combined offering price per share of Common Stock and the April 2024 RDO Common Warrant sold in the April 2024 RDO), will become exercisable on the six-month anniversary of the date of issuance and expire five years from the commencement of sales in the April 2024 RDO.

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The Commitment Amount shall be payable as follows:

(i) $85 million no later than the date that is 70 days following the date on which we receive the FSF Deposit (the “Outside Date” and the funding of the initial $85 million, the “Initial Closing”) and (ii) the remaining $15 million within 60 days following the Initial Closing.

Pursuant to the Commitment Letter, the FSF Lender provided us the non-refundable FSF Deposit in immediately available funds in the aggregate principal amount of $10 million on June 18, 2024 (the “Deposit Date”), which amount will be creditable towards the $85 million required to be funded by FSF Lender at the Initial Closing.

On the Deposit Date, we issued to FSF Lender a warrant to purchase up to an aggregate of 3,250,000 shares of Common Stock (subject to adjustment for any stock dividend, stock split, reverse stock split or similar transaction) (the “Deposit Warrant”), with an exercise price of $1.20 per share.

(i) $85 million no later than the date that is 70 days following the date on which we receive the FSF Deposit (the “Outside Date” and the funding of the initial $85 million, the “Initial Commitment Closing”) and (ii) the remaining $15 million within 60 days following the Initial Commitment Closing.

On the Deposit Date, we issued to FSF Lender a warrant to purchase up to an aggregate of 3,250,000 shares of Common Stock (subject to

adjustment for any stock dividend, stock split, reverse stock split or similar transaction) (the “Deposit Warrant”), with an exercise price of $1.20 per share.

Subject to certain ownership limitations, the Deposit Warrant is immediately exercisable and will expire five years from the date of issuance.

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Tranche B Notes

On October 8, 2024, we entered into a securities purchase agreement (the “Tranche B Securities Purchase Agreement”) with certain institutional investors (collectively, the “Tranche B Investors”) and Oramed (together with the Tranche B Investors, the “Tranche B Noteholders”), to refinance a portion of the Oramed Note and pay off certain other indebtedness.

On October 8, 2024, we entered into the Tranche B Securities Purchase Agreement to refinance a portion of the Oramed Note and pay off certain other indebtedness.

Pursuant to the Tranche B Securities Purchase Agreement, we agreed to issue and sell, in a registered offering directly to the Tranche B Noteholders:

(i) a new tranche B of senior secured convertible notes in the aggregate principal amount of $50.0 million (the “Tranche B Notes”), which notes will mature on the two-year anniversary of the issuance date and will be convertible into shares of our Common Stock at a conversion price equal to $1.09 per share (which was automatically reduced to $1.04 per share of Common Stock subsequent to the December 2024 RDO (as defined below) in accordance with the terms of such notes) and (ii) warrants (the “October 2024 Noteholder Warrants”) to purchase up to 7,500,000 shares of our Common Stock directly to the Tranche B Noteholders.

(i) the “Tranche B Notes”), which will mature on the two-year anniversary of the issuance date and will be convertible into shares of our Common Stock at a conversion price equal to $38.15 per share (which was automatically reduced to $36.40 per share of Common Stock subsequent to the December 2024 RDO (as defined below) in accordance with the terms of such notes) and (ii) warrants (the “October 2024 Noteholder Warrants”) to purchase up to 214,284 shares of our Common Stock directly to the Tranche B Noteholders.

We received in exchange for the issuance of the Tranche B Notes to the Tranche B Investors an aggregate amount in cash of $22,500,000, excluding fees and expenses payable by us.

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The October 2024 Placement Agent Warrants will have the same terms as the October 2024 Noteholder Warrants, except that the Placement Agents have agreed not to exercise the October 2024 Placement Agent Warrants for a period of 180 days following the date of issuance.

Pursuant to the Tranche B Notes, commencing on January 2, 2025, we were required to redeem in cash (the “First Amortization Payment”) such portion of the principal amount of the Tranche B Notes equal to each Tranche B Noteholder’s Holder Pro Rata Amount (as defined in the Tranche B Notes) of $6,250,000 per fiscal quarter at a redemption price equal to 100% of such Amortization Amount (as defined in the Tranche B Notes).

On January 2, 2025, we entered into a deferral and consent letter with each of (i) Nomis Bay Ltd and BPY Limited (the “Nomis Bay Consent”), (ii) Oramed (the “Oramed Consent”) and (iii) 3i, LP (the “3i Consent” and, collectively with the Nomis Bay Consent and the Oramed Consent, the “Tranche B Consents”), respectively, pursuant to which the Tranche B Noteholders agreed to defer our obligation to make the First Amortization Payment until January 31, 2025 and then further to October 8, 2026.

In consideration of such deferral, (i) SCLX JV delivered to the Tranche B Noteholders an aggregate of 142,855 shares of Common Stock held by SCLX JV, (ii) we paid an aggregate of $1.1 million in respect of a portion of the First Amortization Payment and related make-whole interest, and (iii) we entered into the Gloperba-Elyxyb Royalty Purchase Agreement.

Oramed Warrant

Pursuant to the Tranche B Notes, we were required to make an amortization payment on October 1, 2025 (the “Second Amortization Payment”) to Oramed.

On December 31, 2025, the Company enter into a commitment letter with Oramed to purchase 50,000 shares of common stock of Scilex, par value 0.0001 per share, with an exercise price of $20.00 per share (in each case subject to adjustment for recapitalizations, stock splits, stock dividends and similar types of transactions) and a verbal commitment for Oramed to purchase an additional 50,000 shares for a total of 100,000 shares of common stock of Scilex to which Oramed deferred its right to receive this amortization payment.

On February 19, 2026, the Company issued to Oramed a new warrant to purchase an aggregate of 100,000 shares of Common Stock (the “February 2026 Warrant”) at an initial exercise price of $20.00 per share.

The deferred amortization payment was made to Oramed in November 2025.

December 2024 Registered Direct Offering

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The gross proceeds to us from such exercise was approximately $1.0 million.

Tumim Purchase Agreement

In July 2025, we entered into a common stock purchase agreement (the “Tumim Purchase Agreement”) and a related registration rights agreement (the “Tumim Registration Rights Agreement”) with Tumim Stone Capital, LLC (“Tumim”).

Pursuant to the Tumim Purchase Agreement, we had the right but not the obligation, to sell, from time to time, to Tumim up to $100.0 million in aggregate gross purchase price of shares of Common Stock in our sole discretion, subject to certain conditions and limitations, during the term of 24 months.

Through December 31, 2025, there were no sales of shares of Common Stock under the Tumim Purchase Agreement.

In connection with the Tumim Purchase Agreement, we incurred an obligation to issue 150,000 shares of Common Stock (“Commitment Shares Obligation”) to Tumim.

The Commitment Shares Obligation was determined to be an equity-linked contract and met all the conditions for equity classification.

We recognized an amount of $3.0 million in expense and in accrued expenses.

As part of the termination, no shares were issued and instead Tumim was paid an aggregate of $2.7 million.

During the twelve months ended December 31, 2025, there were no sales of shares of Common Stock under the Tumim Purchase Agreement.

As of December 31, 2025, Tumim Purchase Agreement has been terminated.

Warrant Exchange Agreements

On July 22, 2025, the Company entered into Warrant Exchange Agreements (each, a “Warrant Exchange Agreement” and collectively, the “Warrant Exchange Agreements”) with certain holders of the Company’s then-existing Tranche B warrants (such certain holders (excluding Oramed), the “Exchanging Warrant Holders”) to purchase shares of Common Stock (such Tranche B warrants held by the Exchanging Warrant Holders, the “Existing Tranche B Warrants”).

Pursuant to the Warrant Exchange Agreements, the Company and the Exchanging Warrant Holders effected a voluntary securities exchange whereby the Exchanging Warrant Holders exchanged the Existing Tranche B Warrants, which were then exercisable for an aggregate of 107,142 shares of Common Stock at an exercise price of $36.40 per share, originally issued pursuant to the Tranche B Securities Purchase Agreement, for warrants to purchase an aggregate of 500,000 shares of Common Stock (the “Exchange Warrants”) at an exercise price of $40.00 per share (the “Exchange Warrant Exercise Price”).

Warrant Exercise Agreement

On September 30, 2025, we entered into a Warrant Exercise Agreement (the “Warrant Exercise Agreement”) with certain holders of the December 2024 RDO Common Warrants, pursuant to which, among other things, such holders exercised the December 2024 RDO Common Warrants to purchase 179,236 shares and deferred, for a deferral fee of $7.72 per share being exercised, their right to receive an amortization payment scheduled to be paid by us on October 1, 2025 as set forth in the amortization schedule included in the Tranche B Notes in exchange for our agreement to issue new warrants to purchase an aggregate of 275,000 shares of Common Stock (the “September 2025 Warrants”) at an exercise price of $20.00 per share.

Warrant Inducement Agreement

On November 23, 2025, we entered into a warrant inducement agreement (the “Warrant Inducement Agreement”) with a certain institutional investor, pursuant to which the investor agreed to exercise (the “Exercise”) (i) a warrant to purchase shares of Common Stock issued to the investor on April 25, 2024, which was then exercisable for 428,572 shares and has an exercise price of $38.50 per share (the “Existing April 2024 Warrants”) and (ii) a warrant to purchase shares of Common Stock issued to the investor on December 13, 2024, which was then exercisable for 475,824 shares and has an exercise price of $22.72 per share (together with the Existing April 2024 Warrants, the “Existing Warrants”).

As consideration for the Exercise, the Company agreed to (i) reduce the exercise price of the Existing Warrants to $22.51 per share and (ii) issue to the investor the “November 2025 Investor Warrant”) to purchase up to an aggregate of 1,356,594 shares of Common Stock with an exercise price of $29.00 per share (the “November 2025 Investor Warrant Exercise Price”) in a private placement pursuant to Section 4(a)(2) of the Securities Act.

The November 2025 Investor Warrant shall be immediately exercisable and in certain circumstances may be exercised on a cashless basis.

The November 2025 Investor Warrant shall expire five years from the date of its issuance.

The November 2025 Investor Warrant Exercise Price shall be subject to adjustment for any stock split, stock dividend, stock combination, recapitalization or similar event.

Further, in connection with a warrant inducement agreement and pursuant to the terms of an engagement agreement by and between the Company and StockBlock, dated as of March 22, 2024 (as amended and supplemented from time to time, the “Engagement Agreement”), the Company has agreed to issue the placement agents or their designees, warrants to purchase up to an aggregate of 72,352 shares of Common Stock (the “November 2025 Placement Agent Warrants” and, together with the November 2025 Investor Warrant, the "November 2025 Warrants").

The Placement Agent Warrants have substantially the same terms of the November 2025 Warrant, including exercise price and expiration.

Future Liquidity Needs

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We will seek to raise additional funds through various potential sources, such as equity and debt financings and license agreements.

In addition to the liquidity provided by revenue generating products and the issuance of the Common Stock under the ATM Sales Agreement, the February 2024 BDO Underwriting Agreement, the April 2024 RDO Purchase Agreement, the Tranche B Securities Purchase Agreement and the December 2024 RDO Purchase Agreement, as of December 31, 2024, we will receive up to an aggregate of approximately $74.4 million from the exercise of the Private Warrants and public warrants to purchase Common Stock (the “Public Warrants”, and together with the Private Warrants, the “ SPAC Warrants”) (at an exercise price of $11.50 per share of Common Stock), assuming the exercise in full of all of the SPAC Warrants for cash, but will not receive any proceeds from the sale of the shares of our Common Stock issuable upon such exercise.

However, our ability to generate proceeds will depend on the market price of our Common Stock.

In addition to the liquidity provided by revenue generating products, as of December 31, 2025, we would receive up to an aggregate of approximately $80.0 million from the exercise of the Private Warrants and public warrants to purchase Common Stock (the “Public Warrants”, and together with the Private Warrants, the “ SPAC Warrants”) (at an exercise price of $402.50 per share of Common Stock), assuming the exercise in full of all of the SPAC Warrants for cash, but will not receive any proceeds from the sale of the shares of our Common Stock issuable upon such exercise.

If the price of our Common Stock remains below $402.50 per share, we believe warrant holders will be unlikely to cash exercise their SPAC Warrants, resulting in little or no cash proceeds to us.

To the extent any of the February 2024 BDO Firm Warrants, February 2024 BDO Representative Warrants, April 2024 RDO Common Warrants, April 2024 RDO Placement Agent Warrants, Deposit Warrant, October 2024 Noteholder Warrants, October 2024 Placement Agent Warrants, December 2024 RDO Common Warrants and StockBlock Warrants is exercised, we will receive additional proceeds.

To the extent any of the February 2024 BDO Firm Warrants, February 2024 BDO Representative Warrants, April 2024 RDO Placement Agent Warrants, Deposit Warrant, October 2024 Noteholder Warrants, October 2024 Placement Agent Warrants, December 2024 RDO Common Warrants, StockBlock Warrants, the Exchange Warrants, the September 2025 Warrants, the November 2025 Warrants and the February 2026 Warrants is exercised, we will receive additional proceeds.

We can give no assurances that we will be able to secure additional sources of funds to support our operations on acceptable terms, or at all, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.

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In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders.

If we incur additional indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on

our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

If we incur additional indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating

restrictions that could adversely impact our ability to conduct our business.

Additionally, any future collaborations we enter into with third parties may provide capital in the near term, but we may have to relinquish valuable rights to ZTlido, GLOPERBA, ELYXYB, or our product candidates or grant licenses on terms that are not favorable to us.

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Cash Flow Data:

Net cash proceeds from (used for) operating activities

Net cash used for investing activities

Net cash (used for) proceeds from financing activities

Net cash proceeds from operating activities

Net cash proceeds from (used for) investing activities

Net cash (used for) financing activities

Effect of exchange rate changes on cash

Net change in cash, cash equivalents and restricted cash

Cash Flows from Operating Activities

For the year ended December 31, 2024, net cash proceeds from operating activities was approximately $19.3 million, attributable to non-cash reconciling items of $27.3 million related to allocated expense for financial instruments at fair value, stock-based compensation, change in fair value of debt and liability instruments, allowances for expected credit losses, depreciation and amortization, non-cash operating lease cost and gain on derivative liabilities, and changes in operating assets and liabilities that provided $64.8 million of cash, partially offset by our net loss of $72.8 million.

For the year ended December 31, 2023, net cash used for operating activities was approximately $20.7 million, attributable to our net loss of $114.3 million, partially offset by other non-cash reconciling items of $27.9 million related to loss on derivative liabilities, stock-based compensation, change in fair value of debt and liability instruments, depreciation and amortization and non-cash operating lease cost, and changes in operating assets and liabilities that provided $65.7 million of cash.

Net cash provided by operating activities was $3.8 million, for the year ended December 31, 2025 compared to net cash provided by operating activities of $19.3 million for the same period in 2024.

Significant changes impacting net cash provided by operating activities for the year ended December 31, 2025 compared to the same period in 2024 were as follows:

• Net loss of $374.1 million for the year ended December 31, 2025 compared to a net loss of $72.8 million for the year ended December 31, 2024.

• A loss on derivative liability of $22.7 million for the year ended December 31, 2025 compared to a gain of $17.4 million for the prior year period, a difference of $40.1 million.

The change is primarily due to change in fair value of derivative liability.

• Transaction costs related to the Semnur Business Combination of $140.0 million for the year ended December 31, 2025 and nil for the prior year period, a difference of $140.0 million.

The change is primarily due to the closing of the Semnur Business Combination that occurred in September 2025.

• A loss on digital assets of $42.4 million for the year ended December 31, 2025 and nil for the prior year period, a difference of $42.2 million.

The change is primarily due to the digital assets held, which had depreciated in value.

• A loss on convertible debentures of $25.4 million for the year ended December 31, 2025 compared to a $4.8 for the prior year period, a difference of $28.3 million.

The change is primarily due to change in fair value of debt and liability instruments.

• A loss on equity method investment of $59.4 million for the year ended December 31, 2025 and nil for the prior year period, a difference of $446.1 million.

The change is primarily due to the Datavault investment, which had depreciated in value.

• A loss on debt extinguishment of $7.4 million for the year ended December 31, 2025 and nil for the prior year period, a difference of $7.4 million.

The change is primarily due to the loss associated with the exchange of October 2024 Warrant for the Exchange Warrants (as defined below) and exchange of April 2024 RDO Common Warrants and December 2024 RDO Common Warrants for the November 2025 Warrants (each as defined below).

• A gain on purchase of pre-funded warrants of $– million for the year ended December 31, 2025 compared to a $1.2 million gain for the prior year period, a difference of $472.0 million.

The change is primarily due to gain on purchase of Datavault pre-funded warrants.

• A gain on equity investment of $21.9 million for the year ended December 31, 2025 and nil for the prior year period, a difference of $21.9 million.

The change is primarily due to the Datavault investment, which had appreciated in value.

• Other non-cash reconciling items of approximately $33.1 million and $38.7 million for the year ended December 31, 2025 and 2024, respectively, a difference of approximately $5.4 million related to depreciation and amortization and non-cash operating lease cost, financing costs, allocated expense for financial instrument at fair value, in-process research and development expense and stock-based compensation and changes in operating assets and liabilities that provided $114.0 million of cash, partially offset by our net loss of $374.1 million, compared to changes in operating assets and liabilities that provided $64.8 million of cash, partially offset by our net loss of $72.8 million for the year ended December 31, 2024.

Cash Flows from Investing Activities

For the year ended December 31, 2025, net cash provided by investing activities was approximately $4.1 million and was primarily related to $39.6 million related to sale of Datavault shares, partially offset by $15.8 million related to purchase of Bitcoin with cash, $9.2 million related to cash paid to settle Datavault obligation, $1.0 million related to repayments on promissory note, $0.6 million payments of deferred consideration for Romeg intangible asset acquisition under the Romeg License Agreement, and $0.2 million related to purchase of Gloperba Ex-U.S.

rights, in-process research and development assets.

For the year ended December 31, 2024, net cash used for investing activities was approximately $2.7 million and was related to $0.6 million payments of deferred consideration for Romeg intangible asset acquisition under the Romeg License Agreement, $2.0 million purchase of the Class B ordinary shares of Denali and $0.1 million purchase of a convertible promissory note from Denali (see Note 6 titled “ Balance Sheet Components ” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

For the year ended December 31, 2023, net cash used for investing activities was approximately $0.3 million, related to payments of deferred consideration for Romeg intangible asset acquisition and $30.0 thousand attributed to cash paid for property and equipment purchases.

Cash Flows from Financing Activities

For the year ended December 31, 2025 , net cash used for financing activities was approximately $5.5 million and is primarily related to the repayment of an aggregate of $20.5 million of the Tranche B Notes, a $2.7 million payment for the termination of the Tumim Purchase Agreement, a $0.9 million payment of excise tax on stock repurchases, and a payment of $27.0 million cash consideration paid in connection with Penny Warrants repurchase, an aggregate of $3.2 million payment under the ZTlido Royalty Purchase Agreement and Gloperba-Elyxyb Royalty Purchase Agreement , $0.1 million in payment of debt issuance costs, a $1.7 million transaction costs paid in connection with issuance of Common Stock and exchange of April 2024 RDO Warrants and December 2024 RDO Warrants for November 2025 Warrants, $1.0 million transaction costs paid in connection with share repurchase, partially offset by $20.4 million in gross proceeds from the exercise of April 2024 RDO Warrants and December 2024 RDO Warrants, together, the Original Warrants, $10.2 million in proceeds from the exercise of December 2024 Warrants, $21.5 million in proceeds from borrowings pursuant to the Scilex-St.

James Loan Agreement.

For the year ended December 31, 2024 , net cash used for financing activities was approximately $18.1 million and is primarily related to the repayment of an aggregate of $184.6 million of borrowings under the Revolving Facility, the Oramed Note, the Convertible Debentures and the Tranche B Notes, the payment of an aggregate of $4.4 million of transaction costs related to the February 2024 BDO, the April 2024 RDO and the December 2024 RDO, the payment of an aggregate of $4.2 million of transaction cost related to the Tranche B Notes and the ZTlido Royalty Purchase Agreement, a $1.4 million payment of deferred transaction costs related to the Semnur Business Combination, a $0.5 million payment of excise tax on stock repurchases, and a payment of $0.3 million cash in consideration of the repurchase of a certain portion of the SPAC Warrants, partially offset by $95.5 million in gross proceeds from the Revolving Facility, an aggregate of $42.2 million in gross proceeds from the issuance of shares under the February 2024 BDO, April 2024 RDO, December 2024 RDO and the exercise of the February 2024 BDO Firm Warrants, an aggregate of $25.5 million in gross proceeds from issuance of Tranche B Notes and ZTlido Royalty Purchase Agreement, $10.7 million in proceeds from receiving the FSF Deposit, an aggregate of $2.7 million in proceeds from the Standby Equity Purchase Agreements and the ATM Sales Agreement and an aggregate of $2.1 million in proceeds from the exercise of stock options and warrants and purchases under the ESPP.

For the year ended December 31, 2023, net cash provided by financing activities was approximately $23.6 million and is primarily related to $86.4 million in gross proceeds from the Revolving Facility between Scilex Pharma and eCapital Healthcare Corp., $35.5 million in proceeds from the Standby Equity Purchase Agreements, $24.0 million in proceeds from the Convertible Debentures and $1.1 million in proceeds from the exercise of stock options and warrants, partially offset by $89.6 million repayment of the borrowings under the Revolving Facility, Convertible Debentures, and Oramed Note, $20.0 million capital distribution to Sorrento, $10.0 million cash consideration paid for the securities purchased by the Company from Sorrento under the Sorrento SPA, $2.0 million payment of the transaction costs related to the Scilex-Oramed SPA and the Sorrento SPA and $1.8 million payment of the transaction costs related to the Business Combination and debt issuance costs.

Critical Accounting Estimates

This management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which are prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S.

This management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which are prepared in accordance with “U.S.

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period.

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Materially different results can occur as circumstances change and additional information becomes known.

There have been no material changes in our critical accounting estimates as compared to the critical accounting estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, except for the accounting treatment for the cryptocurrency assets, noncontrolling interests and equity method investment as discussed in Note 1 to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

We believe the following accounting policies and estimates are most critical to aid in understanding and evaluating our reported financial results.

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We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control.

Our performance obligations with respect to sales of ZTlido, ELYXYB and GLOPERBA are satisfied at a certain point in time, and we consider control to have transferred upon delivery to the customer, because, upon delivery, the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards in connection with

ownership of the asset, and we have a present right to payment from the customer at that time.

Invoicing typically occurs upon shipment and the length of time between invoicing and the date on which payment is due is not significant.

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Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in our customer contracts, customary industry practices and current government regulations.

Deductions from Revenues

The Company’s gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized.

Such variable consideration represents chargebacks, rebates, sales allowances and sales returns.

These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these product revenue deductions on net sales for a reporting period.

Rebates and Chargebacks

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Product returns are presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheets.

The allowance for product returns is determined based on historical return rates, product shelf life, and inventory levels within the distribution channel.

This estimated rate is applied to gross sales to accrue the sales allowance.

Discounts, typically 2% of sales, are offered to wholesalers for prompt payment.

Upon receipt of actual product returns, the Company updates its balances accordingly, while continuing to refine its estimates based on historical trends.

Co-payment Assistance

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Derivative Liability

Derivative liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expire, with changes in the fair value between reporting periods recorded as other income or expense.

The warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value meas urement.

Derivative liabilities are recorded on our consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expired, with changes in the fair value between reporting periods recorded as other income or expense.

The primary unobservable input utilized in determining the fair value of the warrants is the expected volatility of the Common Stock.

The expected volatility assumption is a blend of our own stock volatility and historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants.

The Company evaluated the Scilex-St.

James Loan Agreement for embedded derivatives and identified certain features that required bifurcation because they are not clearly and closely related to the host instrument.

The embedded derivatives relate to (i) default provisions that could require additional interest payments, and (ii) a provision which could require the settlement of the principal amount of the Scilex-St.

James Loans through the Scilex-St.

James Pledged Securities upon an uncured event of default.

The Company determined that the fair value of these embedded derivatives was immaterial as of the issuance dates of the Scilex-St.

James Loans and as of December 31, 2025.

Stock-Based Compensation

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Interest expense related to these financial instruments is included in the changes in fair value.

Goodwill Impairment

We test for goodwill impairment at the reporting unit level.

We consider our reporting units for goodwill impairment testing.

When evaluating goodwill for impairment, we may first assess qualitative factors to determine whether it is more likely than not the fair value of a reporting unit is less than its carrying amount.

Qualitative factors include macroeconomic conditions, industry and market conditions and overall company financial performance.

If, after assessing the totality of events and circumstances, we determine that it is more likely than not the fair value of the reporting unit is greater than its carrying amount, the quantitative impairment test is unnecessary.

The quantitative impairment test, if necessary, involves comparing the fair value of each reporting unit to its carrying value, including goodwill.

Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit.

If the fair value exceeds the carrying value, we conclude that no goodwill impairment has occurred.

If the carrying value exceeds the fair value, we recognize an impairment charge in an amount equal to the excess, not to exceed the carrying value of the goodwill.

Determining the fair value of a reporting unit when performing a quantitative impairment test involves the use of significant estimates and assumptions to evaluate the impact of operational and economic changes on each reporting unit.

We estimate the fair value using the income and market valuation approaches.

We apply a market approach, which develops a value correlation based on the market capitalization of similar publicly traded companies, referred to as a multiple, to apply to the operating results of the reporting units.

The primary market multiples to which we compare include revenue and earnings before interest, taxes, depreciation, and amortization.

We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain.

Actual future results may differ from those estimates.

We confirm the reasonableness of the valuation conclusions by comparing the indicated values of all the reporting units to the overall company value indicated by the stock price and outstanding shares as of the valuation date, or market capitalization.

Impairment test

During the fiscal fourth quarter of 2025, management determined that a triggering event had occurred as a result of business combination with Vivasor, and a further decrease in our stock price.

Therefore, we performed an impairment test post consolidation of Vivasor, as of the last day of fiscal December 2025.

Based on the results of our year-end impairment test, we concluded that the carrying amount of goodwill for Vivasor exceeded the estimated fair value and we recorded a non-cash impairment charge of $73.4 million, which was included in goodwill and intangible asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 31, 2025.

As a result of this impairment charge, $73.4 million of the total goodwill carrying value of $73.4 million for Vivasor was impaired.

The goodwill impairment was primarily driven by company-specific factors following the acquisition, including a more challenging capital markets environment for early-stage biotechnology companies, increased cost of capital, and updated expectations regarding the timing and probability of future development and financing activities, which together resulted in a decline in the estimated fair value of the reporting unit below its carrying amount.

Based on our year-end impairment test, we concluded that, other than goodwill impairment for Vivasor, the rest of the goodwill balance was not impaired.

Goodwill and Intangible Assets , to our consolidated financial statements found elsewhere in this Annual Report on Form 10-K, for additional details on the 2025 goodwill impairment.

There were no goodwill impairment charges recorded during fiscal 2024.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis