Company: SCLXW
Filing Date: 2025-05-07
Form Type: POS AM
Source: 0001193125-25-115054
Chunk: 510

Company: Scilex Holding Co
Filing Date: 2025-05-07
Form: POS AM
Chunk 510
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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 Product, and to the extent that they are in accordance with GAAP. If Scilex Pharma were to sublicense the licensed technologies, the Developers will receive the same proportion of any sublicensing fees received therefrom. The Product Development Agreement will continue in full force and effect until October 2, 2028, the date that is ten years from the date of the first commercial sale of ZTlido. The Product Development Agreement will renew automatically for subsequent successive one-yearrenewal periods unless Scilex Pharma or the Developers terminate it upon six months’ written notice. On February 16, 2017, Scilex Pharma entered into a Commercial Supply Agreement (as amended, the “Supply Agreement”) with the two Developers to provide commercial supply of ZTlido and SP-103to Scilex Pharma. The Supply Agreement contains standard terms regarding term, termination, payment, product quality and supply. In addition, the agreement provides additional terms regarding the calculation and amount of marketing expenses that may be deducted from net sales for purposes of determining the amount of net profit under the Product Development Agreement. Litigation In the normal course of business, the Company may be