Scilex Holding announces 1-for-35 reverse stock split

PALO ALTO, CA - Scilex Holding Co (NASDAQ:SCLX), a company in the biological products industry, has announced a reverse stock split of its common stock at a ratio of 1-for-35, effective as of April 15, 2025. The announcement comes as the company’s stock has experienced significant pressure, declining over 85% in the past year according to InvestingPro data, with current market capitalization at approximately $34.5 million. The decision, filed with the SEC on Tuesday, follows the approval from the company’s stockholders at a special meeting held on March 19, 2025, to enact a reverse stock split within a range of 1-for-14 to 1-for-50. The board of directors determined the final ratio and filed the Certificate of Amendment on April 14, 2025.

The reverse stock split is aimed at regaining compliance with Nasdaq’s minimum bid price requirement. As a result, every thirty-five shares of the pre-split common stock will be combined into one share of post-split common stock, maintaining the same par value. Despite current challenges, InvestingPro analysis indicates positive forecasts, with analysts expecting the company to achieve profitability this year. Subscribers can access 8 additional key insights about SCLX’s future prospects. The company’s common stock will continue to trade on the Nasdaq Capital Market under the ticker symbol "SCLX" with a new CUSIP number, 80880W205. The trading of the common stock on a split-adjusted basis commenced at the market opening on April 15, 2025.

Shareholders will not receive fractional shares in the reverse stock split. Instead, the company will pay cash equivalent to the fraction of a share multiplied by the closing sales price of the common stock on April 14, 2025. This adjustment will also apply to the common stock issuable upon the exercise or conversion of outstanding warrants, stock options, and senior secured convertible notes, with corresponding adjustments to the exercise or conversion prices.

The reverse stock split uniformly affects all shareholders and does not alter any shareholder’s percentage ownership in the company, except for minor changes due to the elimination of fractional shares. Shareholders holding stock in "street name" through brokerage accounts do not need to take any action, as their accounts will be automatically adjusted. Shareholders of record will receive information from Continental Stock Transfer & Trust Company regarding their stock ownership post-split and any applicable cash payments in lieu of fractional shares.

Furthermore, the reverse stock split will proportionately adjust the number of shares available for issuance under the company’s equity incentive plans, resulting in fewer shares being subject to such plans. The publicly traded warrants under the symbol "SCLXW" will now be exercisable for one share of common stock at a new exercise price of $402.50 per share. Financial metrics from InvestingPro show the company maintains a strong gross profit margin of 70.5% despite current challenges, with revenue growing at 21% in the last twelve months. The company’s current Fair Value analysis suggests it may be significantly undervalued at current levels.

This announcement is based on a press release statement.

In other recent news, Scilex Holding Co. has announced a 1-for-35 reverse stock split, effective April 15, 2025, to comply with Nasdaq’s minimum bid price requirement. This adjustment will reduce the company’s outstanding common shares from approximately 243 million to about 6.9 million. Shareholders will be compensated with cash payments for any fractional shares, and the split will also affect the conversion prices of certain securities. In a related development, Scilex voluntarily terminated its Sales Agreement with B. Riley Securities Inc., Cantor Fitzgerald & Co., and H.C. Wainwright & Co., LLC, which had allowed the sale of roughly 2.76 million shares, generating around $2.69 million in gross proceeds. The termination carries no penalty, and the company has not disclosed specific reasons for this decision.

Furthermore, the U.S. Bankruptcy Court has extended the lock-up period for Scilex’s Dividend Stock to April 14, 2025, affecting shares distributed by Sorrento Therapeutics (OTC:SRNE). Meanwhile, Boral (OTC:BOALY) Capital downgraded Scilex’s stock rating from Buy to Hold, adopting a cautious stance until the effects of the reverse split are clearer. Despite this, Scilex is actively pursuing a joint venture with IPMC to target neurodegenerative and cardiometabolic diseases, highlighting its focus on expanding its product pipeline.

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