Company: SCLXW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0000950170-25-047800
Chunk: 232

Company: Scilex Holding Co
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 232
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 a result of a $1.4 million decrease related to allowance for credit losses that was made in March 2023 for the receivable from Sorrento offset by a $1.2 million increase related to allowances for expected credit losses on accounts receivable, partially offset by a $5.5 million increase in rebate expense related to future shipments of the Additional Product (as defined below) under the Satisfaction Agreement, a $2.9 million increase in contracted services, a $1.7 million increase in personnel expense due to increase in headcount and a merit increase starting January 2024, a $0.5 million increase in travel expenses, a $0.1 million increase in marketing expenses and a $1.0 million increase in other expenses.

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Intangible Amortization Expense

Intangible amortization expense for the years ended December 31, 2024 and 2023 was $4.0 million and $4.1 million, respectively. The decrease of $0.1 million is related to the full amortization of the assembled workforce intangible asset (see Note 6 titled “Goodwill and Intangible Assets” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information).

Legal Settlements

Legal settlements for the years ended December 31, 2024 and 2023 were $9.4 million and nil, respectively. The increase was attributed to litigation settlements that were entered into during the first quarter of 2024. See Note 11 titled “Commitments and Contingencies” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

(Gain) Loss on Derivative Liability

(Gain) loss on derivative liability for the years ended December 31, 2024 and 2023 was ($17.4) million and $0.5 million, respectively. The gain recognized during the year ended December 31, 2024 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants, the February 2024 BDO Firm Warrants, the April 2024 RDO Common Warrants, the Deposit Warrant, the October 2024 Noteholder Warrants and the December 2024 RDO Common Warrants (each as defined below). The loss recognized during the year ended December 31, 2023 was attributed to the change in the fair value of the derivative warrant liability associated with the Private Warrants.

Change in Fair Value of