Release Details

Sorrento Issues a “FAQ” in Response to Large Number Of Urgent Requests from Scilex Dividend Short Holders and/or Record Holders

July 27, 2023

SAN DIEGO, July 27, 2023 (GLOBE NEWSWIRE) -- Sorrento Therapeutics, Inc. (OTC: SRNEQ, "Sorrento"), a biopharmaceutical company dedicated to the development of life-saving therapeutics to treat cancer, intractable pain, and infectious disease, today announced that, in connection with its ongoing chapter 11 case, it has posted a “Frequently Asked Questions” (FAQ) document in response to a number of requests from parties who hold short interests in restricted stock (the “Dividend Short Holders”) of Scilex Holding Company (Nasdaq: SCLX, “Scilex”) regarding its previously announced elective offering of restricted stock of Scilex (the “Offering”).

The FAQ document will be posted under the “Investors” section of its website at www.sorrentotherapeutics.com. The FAQs address questions regarding the process and expected mechanics by which the Dividend Short Holders can purchase the Scilex stock either in open market purchases or in private, secondary transactions with Sorrento.   

The FAQ document is included in this press release and Sorrento will also send the FAQ via email and overnight mail on or about July 27, 2023 to Scilex record holders and to brokerage firms, banks, dealers and similar organizations.

FREQUENTLY ASKED QUESTIONS

PROCESS FOR SHARE PURCHASE FROM OPEN MARKET

1.   Once Scilex Dividend Short Holders (the “Buyer”) acquire shares of Scilex Holding Company (“Scilex”) common stock in the open market, the Buyer will enter into an agreement with Scilex to impose the lock-up restriction expiring September 1, 2023 (the “Lockup”) on the purchased shares.

  1. The agreement will be a short form letter agreement, pursuant to which the Buyer will agree to the imposition of the Lockup legend (through September 1, 2023) on its shares and Scilex will agree to the waiver under #4 below.
  2. Following the open market purchases, Buyer can contact Stephen Ma at Scilex Holding Company, Inc. (SMa@scilexholding.com) to obtain a copy of the agreement for execution.
  3. The agreement will be executed by Scilex and the Buyer or record holder of the acquired shares.
  4. If a holder of a short-position already holds unrestricted shares of Scilex common stock, such holder may convert such shares into restricted shares subject to the Lockup via the same process outlined here for Buyers.

2.   Scilex and Buyer will jointly instruct Continental Stock Transfer & Trust Company, Scilex’s transfer agent (“Continental”), to impose the Lockup on the shares.

3.   If the Buyer is using the purchased shares to cover all or a portion of any outstanding short position in Scilex stock, Buyer will instruct Scilex’s transfer agent to transfer the shares to the lender of the short position.

  1. Buyer, as the holder of the shares, may make direct requests to Continental to transfer the shares. Continental will provide the Buyer with the necessary documentation.
  2. Because the shares will have a Lockup, Continental will separately contact Scilex for an instruction to permit the transfer (See #4 below).
  3. This same process will apply if the lender is also a borrower of Scilex shares (i.e., short) and, in turn, is returning the lender’s borrowed shares to a downstream lender.

4.   Scilex will instruct Continental to “waive” application of the Lockup solely for the purpose of Buyer conveying shares to the lender. The Lockup will continue to apply to the returned shares in lender’s name. This same process will apply if the lender is also a borrower of Scilex shares (i.e., short) and, in turn, is returning the lender’s borrowed shares to a downstream lender.

PROCESS FOR SHARE PURCHASE FROM SORRENTO THERAPEUTICS, INC.

  1. Sorrento Therapeutics, Inc. (“Sorrento”) and Scilex Holding Company (“Scilex”) will coordinate with Continental Stock Transfer & Trust Company, Scilex’s transfer agent (“Continental”), to impose the lock-up restriction expiring September 1, 2023 (the “Lockup”) on the shares of Scilex common stock held by Sorrento.
  2. Sorrento, Scilex and Scilex Dividend Short Holders (“Buyer”) will execute a stock purchase agreement providing for the sale of Scilex common stock by Sorrento to Buyer (the “Purchase Agreement”). The shares will be sold pursuant to the Registration Statement on Form S-1 (File No. 333-268603) filed by Scilex with the SEC on November 30, 2022, and declared effective by the SEC on December 27, 2022 (the “Form S-1”).
  3. Sorrento will instruct Scilex’s transfer agent to transfer the shares to the Buyer. The shares will be recorded by Continental in book entry format.
  4. As set forth in the Purchase Agreement, Scilex will instruct Continental to “waive” application of the Lockup solely for the purpose of Sorrento’s sale of the shares to the Buyer. The Lockup will continue to apply to the returned shares in Buyer’s name.
  5. If the Buyer is using the shares to cover all or a portion of any outstanding short position in Scilex stock, Buyer will instruct Scilex’s transfer agent to transfer the shares to the lender of the short position. This same process will apply if the lender is also a borrower of Scilex shares (i.e., short) and, in turn, is returning the lender’s borrowed shares to a downstream lender.
  6. Scilex will further instruct its transfer agent to “waive” application of the Lockup solely for the purpose of Buyer conveying shares to the lender. The Lockup will continue to apply to the returned shares in lender’s name. This same process will apply if the lender is also a borrower of Scilex shares (i.e., short) and, in turn, is returning the lender’s borrowed shares to a downstream lender.

FAQs

1.   What are the expected mechanics to buying stock from Sorrento mentioned in pg. 5, section “Process” option ii

  1. How are clients expected to pay Sorrento for Scilex shares?
    1. Yes, buyers should expect to wire funds to Sorrento. Wiring instructions will be provided in the Purchase Agreement.
  2. How will the shares be received? i.e. DWAC into DTC on CUSIP 80880W106 or book entry at Continental?
    1. Shares will be held in book-entry form at Continental.

2.   In regards to shares purchased directly from the company, what restrictions are applied if any?

If restrictions applied, are they above and beyond the original spinoff restriction since they are being directly purchased from the company?

  1. The shares will be sold by Sorrento to Buyer pursuant to the Registration Statement on Form S-1 (File No. 333-268603) filed by Scilex with the SEC on November 30, 2022, and declared effective by the SEC on December 27, 2022, and therefore will be transferred by Sorrento in a registered transaction. However, the shares will be subject to a lock-up through September 1, 2023 and therefore are “restricted” from a transfer perspective through the lockup period absent a waiver from Scilex. Upon expiration of the lock-up on 9/1/23 (unless otherwise extended by the Bankruptcy Court), Scilex will instruct its transfer agent to remove the lock- up as of 9/2/23.

About Sorrento Therapeutics, Inc.

Sorrento is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease, and COVID-19. Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as next-generation tyrosine kinase inhibitors ("TKIs"), fully human antibodies (“G-MAB™ library”), immuno-cellular therapies (“DAR-T™”), antibody-drug conjugates (“ADCs”), and oncolytic virus (“Seprehvec™”). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including STI-1558 and COVI-MSC™, and diagnostic test solutions, including COVIMARK™.

Sorrento's commitment to life-enhancing therapies for patients is also demonstrated by our effort to advance a TRPV1 agonist, non-opioid pain management small molecule, resiniferatoxin (“RTX”), and SP-102 (10 mg, dexamethasone sodium phosphate viscous gel) (SEMDEXA™), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, and to commercialize ZTlido® (lidocaine topical system) 1.8% for the treatment of postherpetic neuralgia (PHN). RTX has been cleared for a Phase II trial for intractable pain associated with cancer and a Phase II trial in osteoarthritis patients. Positive final results from the Phase III Pivotal Trial C.L.E.A.R. Program for SEMDEXA™, its novel, non-opioid product for the treatment of lumbosacral radicular pain (sciatica), were announced in March 2022. ZTlido® was approved by the FDA on February 28, 2018.

For more information visit www.sorrentotherapeutics.com

Forward-Looking Statements

This press release and any statements made for and during any presentation or meeting contain forward-looking statements related to Sorrento Therapeutics, Inc., under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding the anticipated timing and plans for completion of the Offering and Sorrento’s products, technologies and prospects. Risks and uncertainties that could cause our actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to: risks related to Sorrento's technologies and prospects, including, but not limited to risks related to clinical development risks, including risks in the progress, timing, cost, and results of clinical trials and product development programs; risk of difficulties or delays in obtaining regulatory approvals; risks that clinical study results may not meet any or all endpoints of a clinical study and that any data generated from such studies may not support a regulatory submission or approval; risks that prior test, study and trial results may not be replicated in continuing or future studies and trials; risks of manufacturing and supplying drug product; risks related to leveraging the expertise of its employees, subsidiaries, affiliates and partners to assist Sorrento in the execution of its product candidates’ strategies; risks relating to the voluntary proceedings under Chapter 11 in the Bankruptcy Court (the "Chapter 11 Cases"), Sorrento's ability to continue operating in the ordinary course while the Chapter 11 Cases are pending, the timing and outcome of the Chapter 11 Cases, Sorrento's ability to obtain timely approval by the Bankruptcy Court of the motions filed in the Chapter 11 Cases, employee attrition and Sorrento's ability to retain senior management and other key personnel due to the distractions and uncertainties of the Chapter 11 Cases, Sorrento's ability to maintain relationships with suppliers, customers, employees and other third parties and regulatory authorities as a result of the Chapter 11 Cases, the Bankruptcy Court's rulings in the Chapter 11 Cases, the length of time that Sorrento will operate under Chapter 11 protection and the continued availability to Sorrento of operating capital during the pendency of the Chapter 11 Cases, risks associated with any third party motions in the Chapter 11 Cases, increased administrative and legal costs related to the chapter 11 process, exposure to potential litigation and inherent risks involved in a bankruptcy process, the potential adverse effects of the Chapter 11 Cases on Sorrento's liquidity or results of operations, or Sorrento's ability to timely file its periodic reports or meet periodic reporting requirements with the SEC; and other risks that are described in Sorrento's most recent periodic reports filed with the Securities and Exchange Commission, including Sorrento's Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, including the risk factors set forth in those filings. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement in this press release except as required by law.

For Sorrento Therapeutics, Inc.

Media Contact
The Levinson Group
212-202-2754
Email: sorrento@tlgcommunications.com
Website: www.sorrentotherapeutics.com

For the Official Committee of Equity Security Holders

Counsel
Glenn Agre Bergman & Fuentes
Phone: 212-970-1600
Email: GABFsorrentoteam@glennagre.com

Sorrento® and the Sorrento logo are registered trademarks of Sorrento Therapeutics, Inc.

G-MAB™, DAR-T™, Seprehvec™, SOFUSA™, COVISHIELD™, COVIDROPS™, COVI-MSC™, COVIMARK™, Fujovee™ and Ovydso™ are trademarks of Sorrento Therapeutics, Inc.

SEMDEXA™ (SP-102) is a trademark of Semnur Pharmaceuticals, Inc. A proprietary name review by the FDA is planned.

ZTlido® is a registered trademark owned by Scilex Pharmaceuticals Inc.

Gloperba® is the subject of an exclusive, transferable license to use the registered trademark by Scilex Holding Company.

ELYXYB™ is the subject of an exclusive, transferable license to use the trademark by Scilex Holding Company.

All other trademarks are the property of their respective owners.

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