On May 29, 2024 Scorpius Holdings, Inc (NYSE American: SCPX) (‘Scorpius" or "the Company"), an integrated contract development and manufacturing organization ("CDMO"), reported strategic, financial, and operational updates for the first quarter ended March 31, 2024 (Press release, Scorpius BioManufacturing, MAY 29, 2024, View Source [SID1234643799]).

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Jeff Wolf, CEO of Scorpius Holdings, Inc., stated, "We are successfully executing our strategy to enhance revenue and reduce costs as we seek to become cash flow positive in the near future. This quarter is indicative of this goal as we achieved a 359% increase in revenue while reducing operating expenses by 34% over the same period last year. We believe this performance reinforces the growing demand for our services and our prudent financial management. Moreover, we have built a highly scalable business model poised to generate meaningful cash flow as we continue to grow our sales and increase utilization of our state-of-the-art San Antonio campus, which we anticipate will allow us to achieve meaningful operating leverage. We are very confident that the future for Scorpius is brighter than ever, with significant industry-wide capacity shortages, and our growing revenue backlog, which stood at $10.8 million as of March 31, 2024."

2023 Financial Results

For the three months ended March 31, 2024, the Company recognized $3.5 million of revenue from process development. For the three months ended March 31, 2023, the Company recognized $0.7 million of process development revenue and $0.1 million of license revenue. The increase in process development revenue was attributable to the expanded biomanufacturing operations and service offerings of the CDMO.

Cost of revenues were $0.9 million and $0.6 million for the three months ended March 31, 2024, and 2023, respectively, and primarily consisted of the direct cost of labor, overhead and material costs at Scorpius. The increase in cost of revenues was due to the expanded service offerings and completed milestone work on multiple CDMO contracts.

Research and development expenses were $3.9 million for the three months ended March 31, 2024, compared to $6.3 million for the three months ended March 31, 2023.

Selling, general and administrative expenses were $5.0 million and $6.5 million for the three months ended March 31, 2024, and 2023, respectively. The decrease of $1.5 million was primarily due to decreases in marketing expense of $0.5 million, consultant labor of $0.5 million, and stock-based compensation of $0.5 million.

For the three months ended March 31, 2024, the change in fair value of contingent earn-out receivable, related party, was $1.0 million. This change was primarily due to an increase in expected value of the earn-out due to a new contract received by Elusys Therapeutics.

Total non-operating income was $0.7 million for the three months ended March 31, 2024, which primarily consisted of $1.0 million from the sale of an intellectual property license, partially offset by $0.2 million of interest expense on finance leases, and $0.1 million change in fair value of convertible promissory note, related party. Total non-operating income was $0.1 million for the three months ended March 31, 2023, which primarily consisted of $0.2 million of interest income, $0.1 million of unrealized gain on short-term investment balances, partially offset by $0.2 million of interest expense on finance leases and other expense.

Net loss attributable to Scorpius was approximately $4.4 million, or ($0.16) per basic and diluted share, for the three months ended March 31, 2024, compared to approximately $12.8 million, or ($0.49) per basic and diluted share, for the three months ended March 31, 2023.

As of March 31, 2024, the Company had approximately $1.7 million in cash, cash equivalents, and short-term investments. On May 16, 2024, the Company consummated a public offering resulting in aggregate gross proceeds of approximately $6.0 million, before deducting underwriting discounts and other offering expenses.