Scilex Holding Company Provides Information to Scilex Stockholders Regarding Manipulative and Naked Short Selling of Scilex Common Stock

• Scilex management is determined to enhance its stockholders’ value and protect their stockholder rights, and is taking steps to combat manipulative and naked short selling practices in Scilex common stock.
  
  

Of the approximately 181 million shares of Scilex common stock currently issued and outstanding: (a) 76 million were distributed by Sorrento Therapeutics, Inc. (OTC: SRNEQ, “Sorrento”) as dividend shares in January 2023 (the “Dividend Shares”) and are restricted from trading until the earlier of (i) September 30, 2024 per court order or (ii) the date on which Sorrento and its Official Committee of Unsecured Creditors agree in writing or on the record in Sorrento’s chapter 11 cases certain claims that may be asserted in potential litigation to avoid Sorrento’s distribution of Dividend Shares and to recover such Dividend Shares; (b) another approximately 60 million shares of Scilex common stock, along with approximately 29 million of shares of Scilex preferred stock, were repurchased by Scilex in September 2023; and (c) approximately 45 million shares of Scilex common stock constitute the unrestricted public float trading on the Nasdaq Capital Market.

According to credible information available to Scilex, Scilex management believes there are approximately 10 million shares of Scilex common stock being sold short and additionally, there are more than 10 million Dividend Shares deemed to have been sold as “naked short” positions on or after January 2023 that have not been covered as of today. The Company believes that there are substantial “naked short” positions in approximately 44 million shares of its common stock that had not cast votes based on the reports tabulated by Broadridge Financial Solutions, Inc., an independent third party that collects and tabulates stockholder votes, for the Company’s prior two annual meetings for its stockholders. This represents a failure by the brokerage firms to deliver the Dividend Shares to the beneficial owner accounts for approximately 15 months constituting a potential violation of Regulation SHO.

Sample letter for Scilex stockholders to send to their brokerage firms to recall loaned shares of Scilex common stock from Brokerages’ Lending Programs.

Sample letter for the beneficial owners, eligible to receive dividend shares of the Company (the “Dividend Shares”) previously distributed by Sorrento Therapeutics, Inc. (OTC: SRNEQ, “Sorrento”) to its stockholders as a dividend, to demand immediate delivery of the Dividend Shares from such Brokerage Firms as Record Holders.