Scorpius Holdings, Inc. 2024 Audited Financial Statements: Revenue, Debt, Going Concern, and CDMO Operations Analysis

Scorpius Holdings, Inc. 2024 Audited Financial Results: Key Highlights for Investors

Date: April 30, 2025

Auditor: BDO USA, P.C.

Executive Summary

Going Concern Warning: The independent registered public accounting firm has expressed substantial doubt about Scorpius Holdings, Inc.’s ability to continue as a going concern due to recurring losses, negative cash flows, and the need for additional capital.
Significant Net Losses: Net loss for 2024 was \$34.3 million, following a net loss of \$46.8 million in 2023. Accumulated deficit reached \$287.2 million by year-end 2024.
Liquidity Crisis: As of December 31, 2024, the company had only \$1.2 million in cash and short-term investments, which is inadequate for ongoing obligations and planned operations.
Major Dilutive Financings in 2024: The company raised capital through multiple equity and debt offerings, notably a December 2024 convertible note and warrant offering, which significantly diluted existing shareholders.
NYSE American Delisting: The company is in the process of being delisted from the NYSE American due to low stock price and failure to timely file its 10-K.
Massive Share Dilution in 2025: In early 2025, over 6 million shares were issued upon conversion of the December 2024 notes, and a further 48.7 million shares are to be issued in a new private placement, representing a transformative increase in share count.
Debt Defaults and Additional Borrowings: The company has defaulted on certain debt covenants and has issued multiple new short-term, high-interest notes in early 2025.
Operations Remain Unprofitable: Revenue declined to \$6.2 million in 2024, with operating expenses of nearly \$40 million, and the company continues to operate at a substantial loss.

Detailed Financial Highlights and Material Events

1. Going Concern and Liquidity Risks

The auditor’s report emphasizes “substantial doubt” about Scorpius Holdings’ ability to continue as a going concern within one year of the financial statements’ issuance. The company has not generated significant revenue or positive operating cash flows. As of year-end 2024, it reported only \$1.2 million in cash and short-term investments, down from \$51 million in total assets at the start of 2024. Management acknowledges that significant additional funding is required to support ongoing operations and future growth plans, including ramping up its San Antonio biomanufacturing facility.

2. Concerning Net Losses and Declining Revenue

2024 Revenue: \$6.24 million (down from \$6.99 million in 2023)
2024 Operating Loss: \$33.6 million (2023: \$42.0 million)
2024 Net Loss: \$34.3 million (2023: \$46.8 million)
Accumulated Deficit: \$287.2 million at 2024 year-end

The company’s cost structure remains high, with over \$39 million in operating expenses for 2024. Research and development and SG&A costs continue to far outpace revenues.

3. Balance Sheet Deterioration

Total assets decreased to \$39.2 million as of December 31, 2024 (down from \$51 million a year prior).
Total liabilities soared to \$37.5 million (from \$22.7 million), driven by new convertible debt and warrants issued in late 2024.
Equity collapsed to only \$1.68 million (from \$28.3 million), primarily due to ongoing losses and new dilutive financings.

4. Major Dilutive Financings and Convertible Debt Issuances

December 2024 Convertible Notes and Warrants (“December 2024 Offering”):

Issued \$13.4 million of 9% senior secured convertible notes and 13.4 million warrants (exercise price \$0.50, reset to \$0.25 in Feb 2025).
Net proceeds to the company were only ~\$3.0 million, as \$8.5 million was used to repurchase earlier pre-funded warrants and \$225,000 to redeem a previous note.
The notes mature in December 2027 but are in default due to missed payments; they are now classified as current liabilities.
Highly dilutive: If fully converted at \$0.25/share, over 53.5 million new shares could be issued, plus another 14.5 million for accrued interest and make-whole payments, and 13.4 million for the warrants – a potential several hundred percent increase in share count.
The notes and warrants contain complex conversion and anti-dilution features, including limitations that can be waived upon shareholder approval (which has been obtained).

Other 2024 Fundraising:

May and August 2024: Additional public offerings of common stock and pre-funded warrants, raising over \$20 million gross (significant portion used to buy back warrants).
At-the-market (ATM) sales raised only about \$18,000 in 2024.

5. Further Rapid Dilution and Short-Term Debt Issuances in 2025

Between January and April 2025, the company issued four new non-convertible promissory notes totaling \$2.65 million, all with 5% interest, short maturities, and high redemption risk.
6,019,444 shares issued in early 2025 for conversion of the December 2024 notes at \$0.25 and \$0.50/share.
As of April 28, 2025, \$1.94 million was raised in a private placement for 48.8 million new shares — another transformative dilution event, with the share count exploding from 5 million at end-2024 to potentially over 60 million in a matter of months.

6. NYSE American Delisting and Compliance Failures

On April 16, 2025, the company received notice from NYSE Regulation for failing to timely file its 10-K.
On April 21, 2025, the NYSE suspended trading and commenced delisting proceedings due to an unsuitably low share price.
The company did not appeal and expects its shares to be delisted imminently.

This is a highly material event and could significantly impact the share price and the company’s ability to access public capital markets.

7. Critical Audit Matter: Complex and Risky Accounting for December 2024 Offering

The company’s December 2024 Offering required significant management judgment regarding whether settlement of prior warrants and notes constituted a modification or extinguishment under accounting rules. The audit process was complex, involving technical specialists and valuation experts, highlighting the transaction’s complexity and risk.

8. Other Notable Risks and Uncertainties

Heavy reliance on a small customer base with mostly short-term contracts.
Uncertain market acceptance for its contract manufacturing services and stiff competition from larger CDMOs.
Ongoing dependence on key individuals and sole-source suppliers.
Material risk from possible further impairment of assets, as occurred in 2024 with a nearly \$2 million impairment charge.
Potential limitations on the use of tax loss carryforwards due to recent ownership changes.

Investor Takeaways

Scorpius Holdings is in acute financial distress, with recurring large losses, a shrinking asset base, and urgent capital needs.
Shareholders have been and will continue to be massively diluted by recent and upcoming equity issuances, including conversions and private placements.
Delisting from the NYSE American will likely further impair share liquidity, market value, and investor confidence.
The company’s survival depends on raising additional capital and/or executing a strategic transaction, both of which remain highly uncertain.
The company is in default on some debt obligations, and its convertible notes and warrants expose shareholders to further dilution and downside risk.

Conclusion

These audited financials and subsequent events are extremely price sensitive. The combination of a going concern warning, severe dilution, imminent delisting, and ongoing operating losses represent significant negative catalysts for the share price. Investors should carefully consider the company’s acute financial challenges, capital structure, and near-term risks before making any investment decisions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult their financial advisors before making any investment decisions. The information herein is based on audited financial statements and public disclosures as of the dates indicated and may be subject to change.