Company: SCLXW
Filing Date: 2025-08-14
Form Type: 424B3
Source: 0000950170-25-108226
Chunk: 64

Company: Scilex Holding Co
Filing Date: 2025-08-14
Form: 424B3
Chunk 64
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 and future outstanding legal fees due from the Company (the “Retainer Shares”). At the option of the law firm,

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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 June 30, 2025, 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 (together, the “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. Scilex Pharma made royalty payments in the amount of $0.6 million and $2.0 million for the three months ended June 30, 2025 and 2024, respectively, and $1.9 million and $4.4 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, Scilex Pharma had ending balances of accrued royalty payables of $4.5 million and $4.0 million, respectively. Total royalty expense recorded within cost of revenue was $1.6 million and $2.4 million for the three months ended June 30, 2025 and 2024, respectively, and $2.3 million and $4.7 million for the six months ended June 30, 2025 and 2024, 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