Company: SCLXW
Filing Date: 2025-05-15
Form Type: 424B3
Source: 0000950170-25-071914
Chunk: 13

Company: Scilex Holding Co
Filing Date: 2025-05-15
Form: 424B3
Chunk 13
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 balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value. Cash equivalents were immaterial as of March 31, 2025 and December 31, 2024.

Accounts Receivable, Net

Accounts receivable are presented net of allowances for expected credit losses and prompt payment discounts. Accounts receivable consists of trade receivables from product sales to customers, which are generally unsecured. Estimated credit losses related to trade accounts receivable are recorded as selling, general and administrative expenses and as an allowance for expected credit losses within accounts receivable, net. The Company reviews reserves and makes adjustments based on historical experience, current economic conditions and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for expected credit losses. As of March 31, 2025 and December 31, 2024, allowances for credit losses on accounts receivable were $1.1 million and $1.2 million, respectively. As of March 31, 2025 and December 31, 2024, allowances for prompt payment discounts were $0.4 million and $0.6 million, respectively.

The Oramed Note and Tranche B Notes

The Company has elected the fair value option to account for the Tranche B Notes (as defined in Note 2 “Liquidity and Going Concern” below) and the Oramed Note (as defined in Note 4 “Fair Value Measurements” below) that were issued in October 2024 and September 2023, respectively, as discussed further in Note 7. The Company recorded these financial instruments at fair value upon issuance with changes in fair value recorded as change in fair value of debt and liability instruments in the unaudited condensed consolidated statements of operations, with the exception of

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changes in fair value due to instrument-specific credit risk, if any, which are recorded as a component of other comprehensive income. Interest expense related to these financial instruments is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to these financial instruments were expensed as incurred. As of March 31, 2025 and December 31, 2024, the weighted-average interest rates for the short-term loans, including these financial instruments, were 8.35% and 6.67%, respectively.

Treasury Stock

The Company uses the cost method to account for rep