Sorrento Posts Form 8937 to Supplement its Previously Issued “FAQ” Regarding the Dividend of Scilex Holding Company Common Stock (Nasdaq: SCLX, “Scilex”)
Sorrento Therapeutics, Inc. (Nasdaq: SRNE) has posted IRS Form 8937 regarding its recent distribution of shares of Scilex Holding Company to stockholders. On January 19, 2023, the company distributed 76 million shares of Scilex, with a ratio of 0.1410127 shares for each Sorrento share held. This distribution is expected to be characterized as a non-dividend return of capital due to insufficient earnings and profits. Sorrento urges stockholders to consult their tax advisors regarding the tax implications of this distribution.
- Distribution of 76,000,000 shares of Scilex common stock enhances shareholder value.
- Characterization of distribution as a non-dividend return of capital may limit tax advantages for shareholders.
- Insufficient earnings and profits could signal financial instability.
SAN DIEGO, Feb. 18, 2023 (GLOBE NEWSWIRE) -- Sorrento Therapeutics, Inc. (Nasdaq: SRNE, “Sorrento”) today posted an IRS Form 8937 (the “Form 8937”) to supplement its previously issued “Frequently Asked Questions” document under the “Investors” section of its website at www.sorrentotherapeutics.com regarding its recent dividend to Sorrento stockholders of shares of common stock of Scilex Holding Company (“Scilex”) previously held by Sorrento.
The Form 8937 has been filed with the Internal Revenue Service and Sorrento expects to send copies of the form in the coming days to brokerage firms, banks, dealers and similar organizations to whom a dividend confirmation had previously been distributed by Scilex’s transfer agent, Continental Stock Transfer & Trust Company.
After the close of trading on the Nasdaq Capital Market on January 19, 2023, Sorrento issued a distribution of an aggregate of 76,000,000 shares of Scilex common stock to the record holders of Sorrento common stock. Sorrento issued the distribution on a pro rata basis among its stockholders in accordance with each stockholder’s ownership percentage of Sorrento common stock as of the record date. The distribution ratio was 0.1410127 of a share of Scilex common stock for each one share of Sorrento common stock. Fractional shares issued as part of the stock distribution have been paid in cash in lieu of distributing fractional shares. At the time of the filing of the Form 8937, Sorrento estimated that its current and accumulated earnings and profits would be insufficient to characterize the distribution as a dividend. Therefore, the estimate would provide that the distribution of the Scilex common stock would be characterized as non-dividend return of capital.
Sorrento stockholders are urged to consult their own tax advisor as to the particular tax consequences of the distribution of the Scilex common stock, including potential tax consequences under state, local and non-U.S. tax laws. Sorrento is providing the details on the Form 8937 for informational purposes only and not to be considered or construed as legal or tax advice.
The Form 8937 is available here.
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 Abivertinib, 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 OvydsoTM (STI-1558), 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)
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 are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding Sorrento’s estimate of its current and accumulated earnings and profits and the expected characterization of the distribution of the Scilex common stock as a non-dividend return of capital. 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 the financial assessment and tax analysis of the distribution; 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 related to the global impact of COVID-19; risks relating to Sorrento’s voluntary proceedings under Chapter 11 in the Bankruptcy Court (the “Chapter 11 Cases”), including 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, 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, 2021 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.
Investors and Media Contact
Email: mediarelations@sorrentotherapeutics.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 OvydsoTM 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.
All other trademarks are the property of their respective owners.
©2023 Sorrento Therapeutics, Inc. All Rights Reserved.
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FAQ
What is the dividend distribution ratio for Sorrento stockholders?
When was the dividend distribution made by Sorrento?
What is the tax implication of the Scilex stock distribution?
How many shares of Scilex were distributed to Sorrento stockholders?
Where can I find the IRS Form 8937 related to Sorrento's distribution?
