Scilex reports substantial underreporting of over 44M shares of common stock

Scilex Holding announced that there are more than 44 million shares of its common stock that have not yet been reported by brokers, banks and other nominees to Broadridge Financial Solutions an independent third party that collects and tabulates stockholder votes for the upcoming annual meeting of Scilex’s stockholders, to be held on April 6, 2023. On March 9, 2023, Broadridge distributed the proxy materials for the Annual Meeting to all Scilex stockholders of record as of March 6, 2023, the record date for the Annual Meeting. The widespread and substantial non-reporting and under-reporting of eligible stockholder votes poses a serious risk of legal challenge as Delaware law and Scilex’s bylaws provide that each stockholder is entitled to one vote for each share of Scilex capital stock held by such stockholder on all matters on which stockholders generally are entitled to vote. Under Federal law, specifically Rule 14b-1 of the Securities Exchange Act of 1934, brokerage firms are required to forward the Annual Meeting proxy materials received from Scilex to such brokerage firms’ customers who are the beneficial owners of Scilex capital stock no later than five business days after receipt of such materials. Rules of the Financial Industry Regulatory Authority also require brokerage firms to distribute proxy materials to such brokerage firms’ customers. These rules are designed to ensure that stockholders are informed of their right to vote at the Annual Meeting. Given that more than 44 million shares of Scilex common stock have not yet been reported by brokerage firms to Broadridge, Scilex believes that certain brokerage firms have not complied with, and thus violated, their legal obligation to deliver the Proxy Materials to their customers and inform such customers of their right to vote at the Annual Meeting. As a result, such brokerage firms may be subject to sanctions and investigation by US government regulatory agencies as well as legal action by Scilex stockholders. To protect the voting rights of Scilex stockholders , Scilex is reporting to, and coordinating with, regulatory agencies, including FINRA, to investigate the widespread and substantial non-reporting and under-reporting of eligible stockholders’ votes and may bring appropriate legal action in due course. Scilex, together with Sorrento, previously provided a series of "Frequently Asked Questions" documents under the "Investors" section of Sorrento’s website at www.sorrentotherapeutics.com regarding Sorrento’s distribution of the Dividend Stock to its stockholders and is today providing a further update to the FAQs to clarify the voting rights of Scilex stockholders at the Annual Meeting on April 6, 2023 and to request that all Scilex stockholders contact their respective brokerage firms to demand delivery of the Proxy Materials for the Annual Meeting (and any additional proxy soliciting materials Scilex distributes to such firms from time to time) and instructions on how to vote their shares of Scilex common stock at the Annual Meeting.