Scorpius Holdings, Inc., a pharmaceutical company with a market capitalization of just $1.41 million, disclosed in a recent SEC filing that it is in urgent need of additional capital to continue its operations.
As of December 20, 2024, the company reported having approximately $1.8 million in cash and cash equivalents and short-term investments, which necessitates raising more funds within the next month. According to InvestingPro data, the company’s current ratio of 0.62 indicates its short-term obligations exceed its liquid assets, highlighting the urgency of its capital needs.
The company, which is listed on NYSE American under the ticker SCPX, is exploring various financing options, including equity and debt financings, equipment sale leasebacks, and potential partnerships or collaborations. The urgency is reflected in the stock’s performance, with InvestingPro data showing a dramatic 99.67% decline over the past year.
The company acknowledged certain limitations in its ability to raise capital through securities sales due to the late filing of its 2023 Annual Report and its Quarterly Report for the quarter ended March 31, 2024. These delays prevent the use of a Form S-3 registration statement for capital raising until June 2025 and are subject to restrictions by the NYSE American.
The filing emphasized the potential consequences of not securing additional funds on acceptable terms. With an EBITDA of -$24.13 million in the last twelve months and total debt of $14.9 million, it may lead to significant dilution for existing stockholders if equity financing is pursued, or restrictive covenants that could affect business operations if debt financing is chosen.
The company also cautioned that failure to obtain necessary financing could result in a restructuring that may include workforce reductions, or more severe measures such as ceasing operations or liquidating assets.
This update supplements the risk factors previously reported in Scorpius Holdings’ Annual Report for the year ended December 31, 2023, and its Quarterly Report for the quarter ended September 30, 2024. The company is actively seeking solutions to address its imminent financial needs and maintain its listing on the NYSE American. InvestingPro subscribers can access 14 additional key insights about SCPX’s financial health, including detailed analysis of its debt structure and profitability metrics.
The information in this article is based on a press release statement.
In other recent news, Scorpius issued a non-convertible promissory note valued at $225,000 to an institutional investor as disclosed in a recent SEC filing. This move created a direct financial obligation for the company, which carries an interest rate of 5.0% per annum and is set to mature on the earliest of December 15, 2024. Notably, the agreement includes standard events of default, such as failure to pay debts exceeding $150,000 to any third party or an event of default under any other outstanding promissory note of the company.
In the case of a subsequent financing event by the company, the holder of the note reserves the right to demand redemption of the full balance and accrued interest. Scorpius Holdings conducted the sale of the note in reliance on exemptions from registration under the Securities Act of 1933, specifically Section 4(a)(2) and/or Regulation D.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
