Company: SCLXW
Filing Date: 2025-05-07
Form Type: POS AM
Source: 0001193125-25-115095
Chunk: 530

Company: Scilex Holding Co
Filing Date: 2025-05-07
Form: POS AM
Chunk 530
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 to the Company. Under the 2024 SIA, the Company issued 10,000,000shares of Common Stock to the same law firm. All such shares are held by the law firm as collateral for current and future outstanding legal fees due from the Company (the “Retainer Shares”). At the option of the law firm, the Retainer Shares may be sold and the net proceeds may be applied against the outstanding legal fees. The Retainer Shares not applied against the outstanding legal fees due will be returned to the Company. As of December 31, 2024, it was not probable that any of the Retainer Shares would be applied against any outstanding legal fees. 11. Commitments and Contingencies Product Development Agreement In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with Itochu and Oishi Koseido Co., Ltd. (“Oishi,” and together with Itochu, the F-45 “Developers”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and SP-103(the “Products”), for Scilex Pharma. The Developers initially developed and have intellectual property rights relating to the Products. Pursuant to the Product Development Agreement, Scilex Pharma acquired an exclusive right to develop and commercialize the Products worldwide except for Japan. The Developers are responsible for sourcing and supplying lidocaine for development and commercialization purposes. Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25% and 35% to the Developers based on net profits. For each of the years ended December 31, 2024 and 2023, Scilex Pharma made royalty payments in the amount of $ 8.3million. As of December 31, 2024 and 2023, Scilex Pharma had ending balances of accrued royalty payables of $ 4.0million and $ 2.4million, respectively. Total royalty expense recorded within cost of revenue was $ 9.9million and $ 8.5million for the years ended December 31, 2024 and 2023, respectively. Net profits are defined as net sales, less cost of goods and marketing expenses. Net sales are defined as total gross sales of any Product, less all applicable deductions, to the extent accrued, paid or allowed in the ordinary course of business with respect to the sale of such