Company: SMNR
Filing Date: 2025-06-11
Form Type: S-4/A
Source: 0001193125-25-139124
Chunk: 229

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-06-11
Form: S-4/A
Chunk 229
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iliated company of Scilex, and we will incur significant charges in connection with the Business Combination and incremental costs as a stand-alone public company.

We will need to replicate or replace certain functions, systems and infrastructure provided by Scilex to which we will no longer have the same access after the Business Combination. We may also need to make investments or hire additional employees to operate without the same access to Scilex’s existing operational and administrative infrastructure. These initiatives may be costly to implement. Due to the scope and complexity of the underlying projects relative to these efforts, the amount of total costs could be materially higher than our estimate, and the timing of the incurrence of these costs is subject to change.

Scilex currently performs or supports many important corporate functions for our company. Our financial statements for the fiscal years ended December 31, 2023 and 2022 reflect charges for these services on an allocation basis. As a result, our historical financial statements may not be reflective of conditions that would have existed or what our results of operations would have been had we been a stand-alone public company and no longer a majority owned subsidiary of Scilex. In connection with the closing of the Business Combination, we will enter into the Transition Services Agreement with Scilex, pursuant to which we will be able to utilize certain employees and other service providers of Scilex (including Scilex’s sales force) to operate our business, including with respect to the following business functions: finance, human resources, information systems, legal and administrative, R&D support and commercialization support. The services under the Transition Services**

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**Agreement will be provided for a period of three years on a cost plus 10% basis, provided that the service fees will not exceed $2,000,000 per annum until all payments under the Oramed Note have been paid in full in cash, and we will reimburse Scilex for its out of pocket fees, costs or expenses. We expect to incur other costs to replace the services and resources that will not be provided by Scilex. We will also incur additional costs as a stand-alone public company. As a stand-alone public company, our total costs related to certain support functions may differ from the costs that were historically allocated to us from Scilex. In addition, in the future, we expect to incur internal costs to implement certain new systems, including infrastructure and an ERP system, while our systems are currently being fully supported by Scilex.

While we