SCLX · Scilex Holding Company

This Term Sheet represents a strategically significant, high-capital, performance-contingent arrangement for Scilex, marking a material departure from its historical pharmaceutical commercialization focus toward infrastructure-enabled technology monetization. The $120 million upfront payment — to be disbursed in tranches and fully committed by year-end 2026 — constitutes a substantial near-term use of cash that will not generate returns unless Datavault successfully deploys and monetizes its Quantum-Ready Edge Network across ~100 U.S. cities. The tiered revenue participation structure ties Scilex’s financial return directly to Datavault’s operational execution: the initial 30% share accelerates recovery up to $250 million, but the step-downs to 15% and then 5% reflect diminishing marginal returns and extended payout horizons — implying breakeven and profitability thresholds for Datavault are prerequisites for meaningful Scilex economics. Critically, the Term Sheet is expressly non-binding except for limited provisions, and the filing explicitly enumerates numerous contingencies — including regulatory approvals, third-party actions, board approvals, and Datavault’s achievement of unspecified operational and financial milestones — that could prevent definitive documentation or closing altogether. The disclosure also warns that failure to finalize could trigger costly disputes over enforceability, diverting management attention and adversely affecting Scilex’s liquidity. As such, investors face binary risk: either the transaction delivers long-duration, scalable revenue exposure to an emerging edge-AI infrastructure play, or it results in capital impairment, opportunity cost, and potential litigation expense — with no interim financial disclosures or governance safeguards disclosed to mitigate uncertainty.