What changed in this filing

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Item 9A. Controls and Procedures

2023-03-07 compared with 2022-02-24 · 1375 added, 1548 removed, 37 unchanged (99% of the section changed)

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure Controls and Procedures

are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized,

and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated

to our management, including our principal executive officer and principal financial officer or persons performing similar functions,

as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and

with the participation of our management, including our principal executive officer and principal financial and accounting officer, we

conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year ended December

31, 2021, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Based on this evaluation, our principal executive

officer and principal financial and accounting officer have concluded that our disclosure controls and procedures were not effective

due to the material weakness in our internal control over financial reporting related to the Company’s accounting for complex financial

As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared

in accordance with U.S.

generally accepted accounting principles.

Accordingly, management believes that the financial statements included

in this Form 10-K present fairly, in all material respects, our financial position, result of operations and cash flows of the periods

Management’s Report on Internal Controls

Over Financial Reporting

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Rules 13a-15(f) and 15d-15(f)

under the Securities Exchange Act of 1934, as amended.

A company’s internal

control over financial reporting includes policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance

that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting

principles in the United States, and that receipts and expenditures of the company are being made only in accordance with authorizations

of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Our management conducted

an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated

Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment,

our management concluded that our internal control over financial reporting was not effective as of December 31, 2021 due to the material

weakness described above.

Changes in Internal Control over Financial

The Company has made changes

in its internal control over financial reporting to enhance our processes to identify and appropriately apply applicable accounting requirements

to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements, including providing

enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party

professionals with whom we consult regarding complex accounting applications.

The Company can offer no assurance that these changes will

ultimately have the intended effects.

OTHER INFORMATION

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s regulations, rules and forms and that such information is accumulated and communicated to our management, including our principal officers, as appropriate, to allow for timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) promulgated by the SEC under the Exchange Act,

we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K.

Based on the foregoing, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Annual Report on Form 10-K as a result of the material weakness described below.

No Management Assessment Regarding Internal Control Over Financial Reporting or Attestation Report of Registered Public Accounting Firm

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting (“ICFR”) as allowed by the SEC for reverse acquisitions between an issuer and a private operating company when it is not possible to conduct an assessment of the private operating company’s ICFR in the period between the consummation date of the reverse acquisition and the date of management’s assessment of ICFR (see Section 215.02 of the SEC Division of Corporation Finance’s Regulation S-K Compliance & Disclosure Interpretations).

We completed the Business Combination on November 10, 2022, pursuant to which we acquired Legacy Scilex and its subsidiaries.

Prior to the Business Combination, we were a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination involving one or more businesses.

As a result, previously existing internal controls are no longer applicable or comprehensive enough as of the assessment date as our operations prior to the Business Combination were insignificant compared to those of the consolidated entity post-Business Combination.

The design of ICFR for the Company post-Business Combination has required and will continue to require significant time and resources from management and other personnel.

As a result, management was unable, without incurring unreasonable effort or expense, to conduct an assessment of our ICFR as of December 31, 2022.

The Company intends to conduct a management assessment regarding ICFR as of December 31, 2023.

This Annual Report also does not contain an attestation report of our registered public accounting firm regarding ICFR since the Company, as an “emerging growth company,”

is not required to provide such report.

Our management is responsible for establishing and maintaining adequate ICFR as defined in Rules 13a-15(f) under the Exchange Act.

Our ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

Because of its inherent limitations, ICFR may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Despite not conducting a formal assessment regarding ICFR, management concluded that we did not employ sufficient accounting resources with appropriate experience and technical expertise to effectively execute controls over certain judgmental and technical accounting areas.

As a result, we identified that certain of our control activities in the areas of revenue, debt, business combination and derivative liabilities did not operate effectively and therefore, were deficient and the combination of the aforementioned deficiencies were deemed to represent a material weakness in our internal control over financial reporting as of December 31, 2022.

While we have taken actions to remediate this material weakness, including (i) recruiting and employing personnel with appropriate experience and technical expertise to enhance management’s assessment of judgmental and technical accounting areas, (ii) conducting additional training for staff involved in judgmental and technical accounting areas, and (iii) engaging additional independent third-party technical consultants to assist in performing accounting analyses of complex transactions, completion of our remediation efforts is ongoing.

As such management has concluded the aforementioned material weakness has not been remediated as of December 31, 2022.

As a company with limited accounting resources, a significant amount of management’s time and attention has been and will be diverted from our business to ensure compliance with these regulatory requirements.

Changes in Internal Control over Financial Reporting

Other than in connection with the closing of the Business Combination, there were no changes in our internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Inf ormation.

Not applicable.

Regarding Foreign Jurisdictions that Prevent Inspections

Disclosure Regarding F oreign Jurisdictions that Prevent Inspections.

Not applicable.

DIRECTORS AND EXECUTIVE OFFICERS

OF THE REGISTRANT

Directors and Executive Officers

Our current directors and

executive officers are as follows:

Financial Officer and Director

Jeffrey Chi has

served as our Chairman of the Board and Chief Executive Officer since our inception.

Chi co-founded Vickers Ventures Partners in

2005 and is a member of its Investment Committee.

From 2013 to April 2017, Dr.

Chi also served as the Chairman of the Singapore Venture

Capital and Private Equity Association.

From 2001 to 2005, Dr.

Chi initially served as a Senior Consultant with the Monitor Group and

later served as Executive Director with Pegasus Capital.

Dr Chi managed engagements for a wide range of clients in both

the public and private sectors.

Chi’s operational background includes working on the management team of an engineering and

construction group where he oversaw operations in Singapore, Malaysia, Taiwan and Indonesia from 1992 to 1998.

As a result of a personal legal dispute, the Singapore courts issued

a Bankruptcy Order against Dr.

Chi in November 2021.

The legal dispute is in the process of being settled and it is expected that the

Order will be annulled soon thereafter.

Chi graduated from

the University of Cambridge with First Class Honors in Engineering and has a Ph.D.

from the Massachusetts Institute of Technology.

is also a CFA charterholder, and is fluent in English and Mandarin.

We believe Dr.

Chi is well-qualified to serve on our board of directors

due to his experience and relationships and contacts.

Ho has served as our Chief Financial Officer and member of our board of directors since our inception.

Ho joined VVP

in 2016 as a Venture Principal, sourcing and evaluating international new investments and acquisitions, with a particular focus on technology

Prior to joining VVP, Mr.

Ho worked at ZS Associates, a sales and marketing consulting firm, from January 2014 to April

2017 where he specialized in sales transformation projects.

His work ranged from portfolio and business strategy and customer segmentation

to incentive compensation plan design and effectiveness diagnostics, across a broad spectrum of industries including high-tech, travel

and transportation, and agri-chemicals.

Ho received a B.S.

in Political Science and an MS in Electrical Engineering, both from Columbia

He is fluent in English and Mandarin.

We believe Mr.

Ho is well-qualified to serve on our board of directors due to his experience

and relationships and contacts.

Wei Woo has served as a member of our board of directors since October 2020.

In 2021, Ms Woo became the CEO &

CIO of a single family office headquartered in Singapore, covering multi-asset investing across global markets.

From 2019-2021,

Woo had served as Managing Director of FOSUN, one of the largest conglomerates in China with global businesses in healthcare and

consumer products, financial services, tourism, entertainment and real estate.

Woo served as Head of all international capital

allocation, asset management and investment products at Lu International Pte.

Ltd., the global financial technology headquarters for

Lufax Holdings, China’s largest online wealth management platform.

From 2014 to 2017, she served as Senior Director of CDPQ Asias

Pacific PTE Ltd., one of Canada’s largest pension plans.

From 2013 to 2014, she served as Vice President of JPMorgan Asset Management.

From 2007 to 2012, Ms.

Woo was a Director at Cenenium Capital Partners, a single family office in New York.

From 1999 to 2017, she was

a Director at the Economic Development Board in Singapore.

Woo received a B.Sc.

in Economics from London School of Economics and

in Economics from Yale University.

We believe Ms.

Woo is well-qualified to serve on our board of directors due to her experience

and relationships and contacts.

Kaji has served as a member of our board of directors since October 2020.

Since May 2019, Mr.

Kaji has served as a Managing

Director of Everstone Capital, which manages in excess of US$6.5 billion, and its Everstone Capital US and Everstone Capital Asia Pte

group of funds, for which he co-leads control equity and special situations investing in consumer and business services and cross-border

investments between the US and Asia.

Kaji was formerly a member of the board of directors of Twelve Seas Investment Company, a blank

check company, from June 2018 until it an initial business combination with Brooge Holdings in December 2019.

Previously from October

2016 through the spring of 2019, Mr.

Kaji had served as an employee director of the University of Texas and Texas A&M System Management

Company (UTIMCO), advising on co- and direct principal investments globally as well as emerging markets’ fund selection.

to joining UTIMCO, Mr.

Kaji served as a Managing Director of Accordion Partners LLC, a private equity consultancy with three offices

He established and led the firm’s investment affiliate (established in 2014) that co-invests with the firm’s consultancy

From 2008 to June 2014, Mr.

Kaji had been a Managing Director and Senior Investment Manager-Private Investments at TRG

Management (an affiliate of the Rohatyn Group).

He managed non-real estate private investment activity across Asia, including cross-border

investments with the US and Australia.

He was responsible for origination, evaluation, and structuring of private equity and distressed

credits across diverse industries such as natural resource services, chemicals, logistics, and consumer services.

Kaji also sat on

the boards of two joint venture real estate and infrastructure funds in Asia.

From 2003 to 2008, Mr.

Kaji was a Managing Director at

the GEM-Kinderhook Funds in New York, focused on mid-cap control investments, structured minority equity and hybrid credit transactions

in the US, as well as opportunistic pursuits in China, the Middle East North Africa region, and India.

From 1999 to 2003, Mr.

a Principal at Crown Capital Group, a mid-cap private equity group established by DLJ Merchant Banking, Apollo Management and former

employees thereof.

Previously he was a Vice President at DLJ Merchant Banking Partners (1996 to 1999), based in New York and Hong Kong.

Kaji started his career in finance with Salomon Brothers (1991 to 1994) and entered the principal investment business at Goldman

Sachs (1995).

He graduated from the Wharton School of the University of Pennsylvania with a Bachelors of Science in Economics, magna

cum laude, and Stanford University with an MBA from the Stanford Graduate School of Business.

We believe Mr.

Kaji is well-qualified to

serve on our board of directors due to her experience and relationships and contacts.

Myint has served as a member of our board of directors since October 2020.

Myint has served as a Senior Fellow to A*Star,

a Singapore research agency for economic oriented research in scientific discovery and innovative technology, since 2010, and a consultant

to its commercialization arm, Accelerate.

He has also served as an adjunct Professor at Duke-NUS Medical School since 2015.

to 2009, he was on the Board as Chief Medical Officer at BTG International, one of the United Kingdom’s largest life science companies

which was sold to Boston Scientific in 2018.

Prior to that, he was R&D Board level Global Medical Director of SmithKline Beecham

(which subsequently became part of GlaxoSmithKline) where he was responsible for leading its global development programs.

Both of these

companies were FTSE100/Fortune 500 companies.

He was also an executive Dean of Medicine and Health at the University of Surrey.

He was also the co-founder of Innovatum partners, Finland’s first specialist investor in life sciences and advisor in life sciences

to Finland’s sovereign wealth fund.

He is also founder of 42 and ambassador to Institute of Ethics and Values in Slovenia, both

of which promote ethical values in companies and society.

He is also chairman of the boards of SGVector and INeX, Singaporean life science

Myint received a MD from London University and a PhD from Wurzburg University.

We believe Dr.

Myint is well-qualified

to serve on our board of directors due to his experience and relationships and contacts.

Director Independence

Nasdaq listing standards

require that a majority of our board of directors be independent.

An “independent director” is defined generally as a person

other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion

of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out

the responsibilities of a director.

Our independent directors

will have regularly scheduled meetings at which only independent directors are present.

Any affiliated transactions will be on terms

no less favorable to us than could be obtained from independent parties.

Any affiliated transactions must be approved by a majority of

our independent and disinterested directors.

Our board of directors has

determined that Pei Wei Woo, Suneel Kaji and Steve Myint are “independent directors” as defined in the Nasdaq listing standards

and applicable SEC rules.

Our independent directors [will] have regularly scheduled meetings at which only independent directors are

affiliated transactions will be on terms no less favorable to us than could be obtained from independent parties.

Our board of directors

will review and approve all affiliated transactions with any interested director abstaining from such review and approval.

Audit Committee

January 6, 2021, we established an audit committee of the board of directors, in accordance with Section 3(a)(58)(A) of the Exchange

Act, which consists of Pei Wei Woo, Suneel Kaji and Steve Myint, each of whom is an independent director under Nasdaq’s listing

The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

reviewing and discussing

with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited

financial statements should be included in our Form 10-K;

discussing with management

and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial

discussing with management

major risk assessment and risk management policies;

monitoring the independence

of the independent auditor;

verifying the rotation

of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing

the audit as required by law;

reviewing and approving

all related-party transactions;

inquiring and discussing

with management our compliance with applicable laws and regulations;

pre-approving all audit

services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services

to be performed;

appointing or replacing

the independent auditor;

determining the compensation

and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent

auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

establishing procedures

for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports

which raise material issues regarding our financial statements or accounting policies;

approving reimbursement

of expenses incurred by our management team in identifying potential target businesses.

Financial Experts

on Audit Committee

audit committee will at all times be composed exclusively of “independent directors” who are “financially literate”

as defined under Nasdaq’s listing standards.

In addition, we must certify to Nasdaq that the committee has, and will continue to

have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting,

or other comparable experience or background that results in the individual’s financial sophistication.

Each member of the audit

committee is financially literate and our board of directors has determined that Mr.

Kaji qualifies as an “audit committee financial

expert” as defined in applicable SEC rules.

Nominating Committee

January 6, 2021, we established a nominating committee of the board of directors, which consists of ei Wei Woo, Suneel Kaji and Steve

Myint, each of whom is an independent director under Nasdaq’s listing standards.

The nominating committee is responsible for overseeing

the selection of persons to be nominated to serve on our board of directors.

The nominating committee considers persons identified by

its members, management, shareholders, investment bankers and others.

Guidelines for

Selecting Director Nominees

guidelines for selecting nominees, which are specified in the Nominating Committee Charter, generally provide that persons to be nominated:

should have demonstrated

notable or significant achievements in business, education or public service;

should possess the requisite

intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills,

diverse perspectives and backgrounds to its deliberations;

should have the highest

ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.

Nominating Committee will consider a number of qualifications relating to management and leadership experience, background, and integrity

and professionalism in evaluating a person’s candidacy for membership on the board of directors.

The nominating committee may require

certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and

will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members.

The nominating

committee does not distinguish among nominees recommended by shareholders and other persons.

have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

Compensation Committee

January 6, 2021, we established a compensation committee of the board of directors, which consists of Pei Wei Woo, Suneel Kaji and Steve

Myint, each of whom is an independent director under Nasdaq’s listing standards.

The compensation committee’s duties, which

are specified in our Compensation Committee Charter, include, but are not limited to:

reviewing and approving

on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our

Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration

(if any) of our Chief Executive Officer based on such evaluation;

reviewing and approving

the compensation of all of our other executive officers;

reviewing our executive

compensation policies and plans;

implementing and administering

our incentive compensation equity-based remuneration plans;

assisting management in

complying with our proxy statement and annual report disclosure requirements;

approving all special perquisites,

special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

if required, producing

a report on executive compensation to be included in our annual proxy statement;

reviewing, evaluating,

and recommending changes, if appropriate, to the remuneration for directors.

Code of Ethics

January 6, 2021 we adopted a code of ethics that applies to all of our executive officers, directors, and employees.

The code of ethics

codifies the business and ethical principles that govern all aspects of our business.

Directors, Executive O fficers and Corporate Governance.

The information required by this item is incorporated by reference from the information contained in the 2023 Proxy Statement, which we expect to file not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

To the extent that we do not file the 2023 Proxy Statement by such date, we will file an amendment to this Annual Report on Form 10-K that includes the information required by this Item 10.

Executive Compensation.

executive officer has received any cash compensation for services rendered to us.

compensation or fees of any kind, including finder’s, consulting fees, and other similar fees, will be paid to our initial shareholders,

members of our management team, or their respective affiliates, for services rendered prior to or in connection with the consummation

of our initial business combination (regardless of the type of transaction that it is).

However, they will receive reimbursement for

any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses,

performing business due diligence on suitable target businesses and business combinations, as well as traveling to and from the offices,

plants, or similar locations of prospective target businesses to examine their operations.

There is no limit on the amount of out-of-pocket

expenses reimbursable by us.

our initial business combination, members of our management team who remain with us may be paid consulting, management, or other fees

from the combined company with any and all amounts being fully disclosed to shareholders, to the extent then known, in the proxy solicitation

materials furnished to our shareholders.

The amount of such compensation may not be known at the time of a shareholder meeting held to

consider an initial business combination, as it will be up to the directors of the post-combination business to determine executive and

director compensation.

In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report

on Form 8-K, as required by the SEC.

our formation, we have not granted any stock options or stock appreciation rights or any other awards under long-term incentive plans

to any of our executive officers or directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this annual report

each person known by us

to be the beneficial owner of more than 5% of our outstanding ordinary shares;

each of our officers and

all of our officers and

directors as a group.

otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares

beneficially owned by them.

The following table does not reflect record of beneficial ownership of the warrants included in the units

offered in the IPO or the Private Placement Warrants as these warrants are not exercisable within 60 days of the date hereof.

and Address of Beneficial Owner (1)

Approximate Percentage of Outstanding

3,375,000 (2)

Vickers Venture Fund VI Pte Ltd

Vickers Venture Fund VI (Plan) Pte Ltd

All directors and executive officers as a group (five individuals)

Less than 1%.

Unless otherwise indicated,

the business address of each of the individuals is 1 Harbourfront Avenue, #16-06, Keppel Bay Tower, Singapore 098632, Singapore.

Represents shares held

by our sponsors.

Chi and Ho have voting and dispositive power over the shares held by our sponsors through their positions

of the Founders’ Shares outstanding prior to our IPO have been placed in escrow with Continental Stock Transfer & Trust

Company, as escrow agent, until (1) with respect to 50% of the founders’ shares, the earlier of six months after the date of the

consummation of our initial business combination and the date on which the closing price of our ordinary shares equals or exceeds $12.50

per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading

day period commencing after our initial business combination and (2) with respect to the remaining 50% of the founders’ shares,

six months after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our

initial business combination, we consummate a liquidation, merger, stock exchange or other similar transaction which results in all of

our shareholders having the right to exchange their shares for cash, securities or other property.

the escrow period, the holders of the Founders’ Shares will not be able to sell or transfer their securities except for transfers,

assignments or sales (i) to our initial shareholders, officers, directors, consultants or their affiliates, (ii) to an initial shareholder’s

members upon its liquidation, (iii) to relatives and trusts for estate planning purposes, (iv) by virtue of the laws of descent and distribution

upon death, (v) pursuant to a qualified domestic relations order, (vi) to us for no value for cancellation in connection with the consummation

of our initial business combination, or (vii) in connection with the consummation of our initial business combination, by private sales

at prices no greater than the price at which the shares were originally purchased, in each case (except for clause (vi) or with

our prior consent) where the transferee agrees to the terms of the escrow agreement and to be bound by these transfer restrictions, but

will retain all other rights as our shareholders, including, without limitation, the right to vote their shares and the right to receive

cash dividends, if declared.

If dividends are declared and payable in shares, such dividends will also be placed in escrow.

unable to effect a business combination and liquidate, there will be no liquidation distribution with respect to the Founders’

Equity Compensation

of December 31, 2021, we had no compensation plans (including individual compensation arrangements) under which equity securities of

the registrant were authorized for issuance.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Our initial shareholders

have purchased an aggregate of 3,450,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share.

All of the founders’ shares were placed in escrow with Continental

Stock Transfer & Trust Company, as escrow agent, until (1) with respect to 50% of the founders’ shares, the earlier of

six months after the date of the consummation of our initial business combination and the date on which the closing price of our ordinary

shares equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, reorganizations and recapitalizations)

for any 20 trading days within any 30-trading day period commencing after our initial business combination and (2) with respect to the

remaining 50% of the founders’ shares, six months after the date of the consummation of our initial business combination, or earlier,

in either case, if, subsequent to our initial business combination, we consummate a liquidation, merger, stock exchange or other similar

transaction which results in all of our shareholders having the right to exchange their shares for cash, securities or other property.

The holders of the founders’ shares have agreed (A) to vote any shares owned by them in favor of any proposed business combination,

(B) not to redeem any shares in connection with a shareholder vote to approve a proposed initial business combination or any amendment

to our charter documents prior to consummation of an initial business combination or sell any shares to us in a tender offer in connection

with a proposed initial business combination and (C) that the founders’ shares shall not participate in any liquidating distribution

from the trust account upon winding up if a business combination is not consummated.

Our Sponsors, Vickers Venture

Fund VI Pte Ltd and Vickers Venture Fund VI (Plan) Pte Ltd.

purchased an aggregate of 6,840,000 Private Placement Warrants for a total

purchase price of $5,130,000.

The Private Placement Warrants are identical to the public warrants except that the Private Placement Warrants:

(i) will not be redeemable by us and (ii) may be exercised for cash or on a cashless basis so long as they are held by the initial purchasers

or any of their permitted transferees.

The initial purchasers have agreed not to transfer, assign or sell any of the Private Placement

Warrants and underlying securities (except to certain permitted transferees) until the completion of our initial business combination.

In order to meet our working

capital needs following the consummation of our initial public offering, our initial shareholders, officers and directors or their affiliates

may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole

Each loan would be evidenced by a promissory note.

The notes would either be paid upon consummation of our initial business

combination, without interest, or, at holder’s discretion, up to $1,500,000 of the notes may be redeemed into warrants at a price

of $0.75 per warrant.

The warrants would be identical to the Private Placement Warrants.

In the event that the initial business combination

does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds

from our trust account would be used for such repayment.

On December 20, 2021, the Sponsors loaned us an aggregate of $500,000

for working capital purposes.

On January 6, 2022, the Sponsors deposited an aggregate of $1,035,000 into the Trust Account in the form

of a non-interest-bearing loan, as required to provide us an additional three months to consummate an initial business combination pursuant

to our amended and restated memorandum and articles of association.

On January 27, 2022, the Sponsors loaned us an additional aggregate

principal amount of $500,000 for working capital purposes (the “January 2022 Loans”).

The December 2021 Loans, the January

2022 Deposit and the January 2022 Loans were evidenced by the Notes.

If we complete an initial business combination, we will, at the option

of the Sponsors, repay the amounts evidenced by the Notes or convert a portion or all of the total amount into warrants at a price of

$0.75 per warrant, which warrants will be identical to the Private Placement Warrants.

If we do not complete a business combination, we

will repay such amounts only from funds held outside of the Trust Account.

The issuances of the Notes were made pursuant to the exemption

from registration contained in Section 4(a)(2) of the Securities Act.

The holders of our founders’

shares, as well as the holders of the Private Placement Warrants and any warrants our initial shareholders, officers, directors or their

affiliates may be issued in payment of working capital loans made to us (and all underlying securities), will be entitled to registration

The holders of a majority of these securities are entitled to make up to two demands that we register such securities.

of the majority of the founders’ shares can elect to exercise these registration rights at any time commencing three months prior

to the date on which these ordinary shares are to be released from escrow.

The holders of a majority of the private warrants and warrants

issued in payment of working capital loans made to us (or underlying securities) can elect to exercise these registration rights at any

time after we consummate a business combination.

In addition, the holders have certain “piggy-back” registration rights with

respect to registration statements filed subsequent to our consummation of a business combination.

We will bear the expenses incurred

in connection with the filing of any such registration statements.

We currently maintain our

executive offices at 1 Harbourfront Avenue, #16-06, Keppel Bay Tower, Singapore 098632, Singapore.

Such space, utilities and secretarial

and administrative services will be provided to us free of charge by an affiliate of our executive officers.

We consider our current

office space adequate for our current operations.

No compensation or fees of

any kind, including finder’s, consulting fees and other similar fees, will be paid to our initial shareholders, members of our

management team or their respective affiliates, for services rendered prior to or in connection with the consummation of our initial

business combination (regardless of the type of transaction that it is).

However, such individuals will receive reimbursement for any

out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses,

performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices,

plants or similar locations of prospective target businesses to examine their operations.

There is no limit on the amount of out-of-pocket

expenses reimbursable by us.

Related Party Policy

Our Code of Ethics, which

we adopted upon consummation of our initial public offering, requires us to avoid, wherever possible, all related party transactions

that could result in actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit

Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected

to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director

or nominee for election as a director, (b) greater than 5% beneficial owner of our ordinary shares, or (c) immediate family member, of

the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result

of being a director or a less than 10% beneficial owner of another entity).

A conflict of interest situation can arise when a person

takes actions or has interests that may make it difficult to perform his or her work objectively and effectively.

Conflicts of interest

may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

We also require each of our

directors and executive officers to annually complete a directors’ and officers’ questionnaire that elicits information about

related party transactions.

Our audit committee, pursuant

to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions.

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms

believed by us to be no less favorable to us than are available from unaffiliated third parties.

Such transactions will require prior

approval by our audit committee and a majority of our uninterested “independent” directors, or the members of our board who

do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel.

We will not enter into any such transaction unless our audit committee and a majority of our disinterested “independent”

directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect

to such a transaction from unaffiliated third parties.

Additionally, we require each of our directors and executive officers to complete

a directors’ and officers’ questionnaire that elicits information about related party transactions.

These procedures are intended

to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on

the part of a director, employee or officer.

Director Independence

Currently each of Pei Wei

Woo, Suneel Kaji and Steve Myint would each be considered an “independent director” under the Nasdaq listing rules, which

is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having

a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise of

independent judgment in carrying out the responsibilities of a director.

Our independent directors will have regularly scheduled meetings

at which only independent directors are present.

To the extent that we do not file the 2023 Proxy Statement by such date, we will file an amendment to this Annual Report on Form 10-K that includes the information required by this Item 11.

Security Ownership of C ertain Beneficial Owners and Management and Related Stockholder Matters.

To the extent that we do not file the 2023 Proxy Statement by such date, we will file an amendment to this Annual Report on Form 10-K that includes the information required by this Item 12.

Certain Relationships and Rel ated Transactions, and Director Independence.

To the extent that we do not file the 2023 Proxy Statement by such date, we will file an amendment to this Annual Report on Form 10-K that includes the information required by this Item 13.

Principal Accounting Fees and Services.

Principal Accountant

Fees and Services

The firm of WithumSmith+Brown,

PC, or Withum, acts as our independent registered public accounting firm.

The following is a summary of fees paid to Withum for services

During the year ended December

31, 2021 and for the period from February 21, 2020 (inception) through December 31, 2020, fees for our independent registered public

accounting firm were approximately $80,000 and $81,000 for the services Withum performed in connection with our Initial Public

Offering and the audit of our December 31, 2021 and 2020 financial statements included in this Annual Report on Form 10-K.

Audit-Related Fees.

During the year

ended December 31, 2021 and for the period from February 21, 2020 (inception) through December 31, 2020, our independent registered public

accounting firm did not render assurance and related services related to the performance of the audit or review of financial statements.

During the year ended December 31, 2021 and for the

period from February 21, 2020 (inception) through December 31, 2020, our fees for our independent registered public accounting

firm were approximately $4,000 and $0 for tax compliance, tax advice and tax planning.

All Other Fees .

During the year ended

December 31, 2021 and for the period from February 21, 2020 (inception) through December 31, 2020, there were no fees billed for products

and services provided by our independent registered public accounting firm other than those set forth above.

Pre-Approval Policy

Our audit committee was formed

upon the consummation of our Initial Public Offering.

As a result, the audit committee did not pre-approve all of the foregoing services,

although any services rendered prior to the formation of our audit committee were approved by our board of directors.

Since the formation

of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted

non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions

for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

EXHIBITS, FINANCIAL STATEMENTS, AND

following documents are filed as part of this Form 10-K:

of Independent Registered Public Accounting Firm

of Operations

of Changes in Shareholder’s Equity

of Cash Flows

to Financial Statements

Statement Schedules:

We hereby file as part of

this Report the exhibits listed in the attached Exhibit Index.

Exhibits which are incorporated herein by reference can be inspected and

copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C.

Copies of such

material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C.

20549, at prescribed

rates or on the SEC website at www.sec.gov.

Amended and Restated Memorandum and Articles of Association.**

Specimen Unit Certificate.**

Specimen Ordinary Share Certificate.**

Specimen Warrant Certificate.**

Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.**

Description of the Registrant’s Securities.*

Form of Letter Agreement from each of the Registrant’s initial shareholders, officers and directors.**

Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.**

Registration Rights Agreement**

Private Warrants Purchase Agreement between the Registrant and Sponsors.**

Indemnification Agreement.**

Administrative Services Agreement.**

Code of Ethics.**

Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Incorporated by reference

to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020.

Incorporated by reference

to the Registrant’s Registration Statement on Form S-1 (SEC File Nos.

333-251352 and 333-251927).

To the extent that we do not file the 2023 Proxy Statement by such date, we will file an amendment to this Annual Report on Form 10-K that includes the information required by this Item 14.

Exhibits, F inancial Statement Schedules.

(a)(1) Financial Statements

Reference is made to the Index to Consolidated Financial Statements of Scilex Holding Company appearing on page F-1 of this Annual Report on Form 10-K.

(a)(2) All other schedules not listed above have been omitted because of the absence of conditions under which they are required, or because the required information is included in the consolidated financial statements or the notes thereto.

(a)(3) Exhibits

Agreement and Plan of Merger, dated as of March 18, 2019, by and among Scilex Holding Company, Sigma Merger Sub, Inc., Semnur Pharmaceuticals, Inc., Fortis Advisors LLC, solely as the representative of the Equityholders and, solely with respect to Section 1.8(a), Section 3.11 and Article X, Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 2.1 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Amendment No.

1 to Agreement and Plan of Merger, dated as of August 7, 2019, by and among Semnur Pharmaceuticals, Inc., Scilex Holding Company, Sigma Merger Sub, Inc., Fortis Advisors, LLC, solely as the representative of the Equityholders and, solely with respect to Section 1.8(a), 3.11 and Article X of the Agreement and Plan of Merger, Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 2.2 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on October June 27, 2022).

Bill of Sale and Assignment and Assumption Agreement, dated May 12, 2022, by and between Scilex Holding Company and Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 2.3 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Asset Purchase Agreement, dated April 23, 2021, between Sorrento Therapeutics, Inc.

and Aardvark Therapeutics, Inc., as assumed by Scilex Holding Company on May 12, 2022, pursuant to the Bill of Sale and Assignment and Assumption Agreement, dated as of such date, by and between Scilex Holding Company and Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 2.4 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Agreement and Plan of Merger, dated as of March 17, 2022, by and among Vickers Vantage Corp.

I, Vickers Merger Sub, Inc.

and Scilex Holding Company (incorporated by reference to Exhibit 2.1 of Vickers’s Current Report on Form 8-K (File No.

001-39852), filed with the SEC on March 21, 2022).

Amendment No.

1 to Agreement and Plan of Merger, dated as of September 12, 2022, by and among Vickers Vantage Corp.

I, Vickers Merger Sub, Inc.

and Scilex Holding Company (incorporated by reference to Exhibit 2.1 of Vickers’s Current Report on Form 8-K (File No.

001-39852), filed with the SEC on September 14, 2022).

Restated Certificate of Incorporation of Scilex Holding Company (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Certificate of Designations of Scilex Holding Company (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Bylaws of Scilex Holding Company (incorporated by reference to Exhibit 3.3 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Warrant Agreement, dated as of January 6, 2021, by and between Vickers Vantage Corp.

I and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 of Vickers’s Current Report on Form 8-K (File No.

001-39852), filed with the SEC on January 11, 2021).

Description of Securities of Scilex Holding Company.

Amended and Restated Registration Rights Agreement, dated as of November 10, 2022, by and among Scilex Holding Company, Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd, Sorrento Therapeutics, Inc.

and certain security holders set forth on the signature pages thereto (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Form of Indemnification Agreement of Scilex Holding Company (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Scilex Pharmaceuticals, Inc.

Amended and Restated 2017 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC June 27, 2022).

Form of Option Agreement and Stock Option Grant Notice under the Scilex Pharmaceuticals Inc.

2017 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC June 27, 2022).

Scilex Holding Company 2019 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.9 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC June 27, 2022).

Form of Option Agreement and Stock Option Grant Notice under the Scilex Holding Company 2019 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.10 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC June 27, 2022).

Scilex Holding Company 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Form of Stock Option Grant Notice and Stock Option Agreement under the Scilex Holding Company 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the Scilex Holding Company 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Scilex Holding Company 2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.8 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Sponsor Support Agreement, dated as of March 17, 2022, by and among Vickers Vantage Corp.

I and certain stockholders (incorporated by reference to Exhibit 10.1 of Vickers’s Current Report on Form 8-K (File No.

001-39852), filed with the SEC on March 21, 2022).

Amendment No.

1 to Sponsor Support Agreement, dated as of September 12, 2022, by and among Vickers Vantage Corp.

I and certain stockholders (incorporated by reference to Exhibit 10.2 of

Vickers’s Current Report on Form 8-K (File No.

001-39852), filed with the SEC on September 14, 2022).

Company Stockholder Support Agreement, dated as of March 17, 2022, by and among Vickers Vantage Corp.

I, Scilex Holding Company and Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 10.2 of Vickers’s Current Report on Form 8-K (File No.

001-39852), filed with the SEC on March 21, 2022).

Offer Letter, dated as of April 19, 2019, between Scilex Pharmaceuticals Inc.

and Jaisim Shah (incorporated by reference to Exhibit 10.17 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Offer Letter, dated as of April 27, 2022, by and between Scilex Holding Company and Elizabeth Czerepak (incorporated by reference to Exhibit 10.21 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Commercial Supply Agreement, dated as of February 16, 2017, by and among Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.22 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

First Addendum to Commercial Supply Agreement, dated as of August 31, 2017, by and among Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.23 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Second Addendum to Commercial Supply Agreement, dated as of May 9, 2018, by and among Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.24 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Third Addendum to Commercial Supply Agreement, dated as of August 30, 2018, by and among Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.25 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Exclusive Distribution Agreement, dated as of August 6, 2015, by and among Scilex Pharmaceuticals Inc.

and Cardinal Health 105, Inc.

(incorporated by reference to Exhibit 10.26 of Amendment No.

4 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on September 13, 2022).

Amendment to Exclusive Distribution Agreement, dated as of May 24, 2018, by and among Scilex Pharmaceuticals Inc.

and Cardinal Health 105, Inc.

(incorporated by reference to Exhibit 10.27 of Amendment No.

4 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on September 13, 2022).

Second Amendment to Exclusive Distribution Agreement, dated as of September 19, 2018, by and among Scilex Pharmaceuticals Inc.

and Cardinal Health 105, Inc.

(incorporated by reference to Exhibit 10.28 of Amendment No.

4 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on September 13, 2022).

Third Amendment to Exclusive Distribution Agreement, dated as of October 1, 2021, by and among Scilex Pharmaceuticals Inc.

and Cardinal Health 105, LLC (f/k/a Cardinal Health 105, Inc.).

(incorporated by reference to Exhibit 10.29 of Amendment No.

4 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on September 13, 2022).

Supply Agreement, dated as of December 17, 2015, by and between Genzyme Corporation and Semnur Pharmaceuticals, Inc.

(incorporated by reference to Exhibit 10.33 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Product Development Agreement, dated as of May 11, 2011, by and between Scilex Pharmaceuticals, Inc.

(as successor to Stason Pharmaceuticals, Inc.), Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation.

(incorporated by reference to Exhibit 10.34 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

First Amendment to Product Development Agreement, dated as of April 2, 2013, by and between Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.35 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Second Amendment to Product Development Agreement, dated as of February 20, 2017, by and between Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.36 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Third Amendment to Product Development Agreement, dated as of August 29, 2018, by and between Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.37 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Fourth Amendment to Product Development Agreement, dated as of December 13, 2019, by and between Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.38 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Fifth Amendment to Product Development Agreement, dated as of April 30, 2021, by and between Scilex Pharmaceuticals Inc., Oishi Koseido Co., Ltd.

and Itochu Chemical Frontier Corporation (incorporated by reference to Exhibit 10.39 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Master Services Agreement —

SP-102, dated as of January 27, 2017, by and between Semnur Pharmaceuticals, Inc.

and Lifecore Biomedical, LLC (incorporated by reference to Exhibit 10.40 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Amendment No.

1 to Master Services Agreement, dated as of April 26, 2018, by and between Semnur Pharmaceuticals, Inc.

and Lifecore Biomedical, LLC (incorporated by reference to Exhibit 10.41 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Novation Agreement re Master Services Agreement, dated as of June 15, 2022, by and among Scilex Holding Company, Tulex Pharmaceuticals Inc.

and Aardvark Therapeutics Inc.

(incorporated by reference to Exhibit 10.42 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Master Services Agreement, dated as of November 23, 2020, by and between Aardvark Therapeutics Inc.

and Tulex Pharmaceuticals Inc.

as assumed by Scilex Holding Company on May 12, 2022, as novated to Scilex Holding Company, pursuant to the Novation Agreement re Master Services Agreement, dated as of June 15, 2022, by and among Scilex Holding Company, Tulex Pharmaceuticals Inc.

and Aardvark Therapeutics Inc.

(incorporated by reference to Exhibit 10.43 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

License and Commercialization Agreement, dated as of June 14, 2022, by and between Scilex Holding Company and RxOmeg Therapeutics LLC, a/k/a Romeg Therapeutics, LLC (incorporated by reference to Exhibit 10.44 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Assignment Agreement, dated August 6, 2013, between Semnur Pharmaceuticals, Inc.

and Shah Investor LP (incorporated by reference to Exhibit 10.57 of Amendment No.

1 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on June 27, 2022).

Office Lease, dated as of August 8, 2019, by and between Scilex Pharmaceuticals Inc.

and 960 San Antonio LLC (incorporated by reference to Exhibit 10.59 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

First Amendment to Office Lease, dated as of September 15, 2019, by and between Scilex Pharmaceuticals Inc.

and 960 San Antonio LLC (incorporated by reference to Exhibit 10.60 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Sublease Agreement, dated as of May 18, 2022, by and between Scilex Holding Company and Live Action, Inc.

(incorporated by reference to Exhibit 10.61 of Amendment No.

2 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on July 21, 2022).

Stockholder Agreement, dated as of September 12, 2022, between Vickers Vantage Corp.

I and Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 10.59 of Amendment No.

4 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on September 13, 2022).

Contribution and Satisfaction of Indebtedness Agreement, dated as of September 12, 2022, by and among Sorrento Therapeutics, Inc., Scilex Holding Company and Scilex Pharmaceuticals, Inc.

(incorporated by reference to Exhibit 10.60 of Amendment No.

4 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on September 13, 2022).

Letter Agreement, dated October 17, 2022, between Scilex Holding Company and Sorrento Therapeutics, Inc.

(incorporated by reference to Exhibit 10.61 of Amendment No.

5 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on October 18, 2022).

Warrant Transfer Agreement, dated October 17, 2022, by and among Sorrento Therapeutics, Inc., Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd and for the limited purposes set forth therein, Vickers Vantage Corp.

I and Maxim Group LLC.

(incorporated by reference to Exhibit 10.62 of Amendment No.

5 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on October 18, 2022).

Debt Contribution Agreement, dated October 17, 2022, by and among Vickers Vantage Corp.

I, Vickers Venture Fund VI Pte Ltd and Vickers Venture Fund VI (Plan) Pte Ltd (incorporated by reference to Exhibit 10.63 of Amendment No.

5 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on October 18, 2022).

Letter Agreement, dated October 17, 2022, by and among Sorrento Therapeutics, Inc., Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd, Vickers Vantage Corp.

I and Maxim Group LLC.

(incorporated by reference to Exhibit 10.64 of Amendment No.

5 of Vickers’s Form S-4 (File No.

333-264941), filed with the SEC on October 18, 2022).

Standby Equity Purchase Agreement, dated as of November 17, 2022, by and between Scilex Holding Company and YA II PN, LTD.

(incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 18, 2022) .

Standby Equity Purchase Agreement, dated as of January 8, 2023, by and between Scilex Holding Company and B.

Riley Principal Capital II, LLC (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on January 9, 2023).

Amended and Restated Standby Equity Purchase Agreement, dated as of February 8, 2023, by and between Scilex Holding Company and YA II PN, LTD.

(incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on February 9, 2023).

Scilex Holding Company 2023 Inducement Plan (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on January 17, 2023).

Form of Stock Option Grant Notice and Stock Option Agreement under the Scilex Holding Company 2023 Inducement Plan (incorporated by reference to Exhbit 10.2 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on January 17, 2023).

Form of Restricted Stock Unit Award Grant Notice and Award Agreement under the Scilex Holding Company 2023 Inducement Plan (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on January 17, 2023).

List of Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of our Current Report on Form 8-K (File No.

001-39852), filed with the SEC on November 17, 2022).

Consent of Ernst & Young LLP, independent registered public accounting firm of Scilex Holding Company.

Power of Attorney (included on the signature page hereto) .

Certification of Jaisim Shah, Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Elizabeth Czerepak, Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Jaisim Shah, Principal Executive Officer, and Elizabeth Czerepak, Principal Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Labels Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Indicates management contract or compensatory plan or arrangement.

+ Filed herewith.

^ Certain identified information has been omitted pursuant to Item 601(b)(10) of Regulation S-K because such information is both (i) not material and (ii) information that the Registrant treats as private or confidential.

The Registrant hereby undertakes to furnish supplemental copies of the unredacted exhibit upon request by the SEC.

# Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601.

The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

Form 10-K Summary.

Pursuant to the requirements

of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized on the 24 th day of February, 2022.

VICKERS VANTAGE CORP.

Chief Executive Officer

In accordance with the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

Executive Chairman and Chief Investment Officer

February 24, 2022

Chief Executive Officer and Director

February 24, 2022

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 7, 2023

Scilex Holding Company

/s/ Jaisim Shah

Chief Executive Officer and President

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints, jointly and severally, each of Jaisim Shah and Elizabeth Czerepak, acting alone or together with another attorney-in-fact, as his or her attorney-in-fact, with full power of substitution and resubstitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, or his or her substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Jaisim Shah

Chief Executive Officer, President and Director

March 7, 2023

(Principal Executive Officer)

Chief Financial Officer

February 24, 2022

(Principal Financial and Accounting Officer)

February 24, 2022

VICKERS VANTAGE CORP.

INDEX TO FINANCIAL STATEMENTS

/s/ Elizabeth A.

Executive Vice President, Chief Financial Officer and Chief Business Officer

( Principal Financial Officer)

March 7, 2023

/s/ Henry Ji, Ph.D.

Executive Chairperson and Director

March 7, 2023

Henry Ji, Ph.D.

/s/ Dorman Followwill

March 7, 2023

Dorman Followwill

March 7, 2023

/s/ Tien-Li Lee, M.D.

March 7, 2023

Tien-Li Lee, M.D.

/s/ David Lemus

March 7, 2023

/s/ Tommy Thompson

March 7, 2023

Tommy Thompson

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Operations for the Years ended December 31, 2022, 2021, and 2020

Consolidated Statements of Stockholders’

Equity / (Deficit) for the Years ended December 31, 2022, 2021, and 2020

Consolidated Statements of Cash Flows for the Years ended December 31, 2022, 2021, and 2020

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Financial Statements:

Balance Sheet s

Statements of Operations

Statements of Changes in Shareholders’ (Deficit) Equity

Statements of Cash Flows

Notes to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and the Board of Directors

Vickers Vantage Corp.

To the stockholders and the Board of Directors of

Scilex Holding Company

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Vickers Vantage Corp.

I (the “Company”) as of December 31, 2021 and 2020, the related statements of operations, changes in shareholders’ (deficit)

equity and cash flows for the year ended December 31, 2021 and for the period from February 21, 2020 (inception) through December 31,

2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its

operations and its cash flows for the year ended December 31, 2021 and for the period from February 21, 2020 (inception) through December

31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, if the Company is unable to raise additional

funds to alleviate liquidity needs as well as complete a Business Combination by the close of business on April 11, 2022, then the

Company will cease all operations except for the purpose of liquidating.

This date for mandatory liquidation and subsequent dissolution

raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans regarding these matters

are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Restatement of Previously Issued Financial Statement

As described in Note 10 to the financial statements, the Company’s

previously issued January 11, 2021 financial statement has ben restated herein to correct certain misstatements.

We have audited the accompanying consolidated balance sheets of Scilex Holding Company (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders' equity/(deficit) and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has negative working capital, has suffered losses from operations, has recurring negative cash flows from operations, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control

over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor

New York, New York

February 24, 2022

PCAOB ID Number 100

VICKERS VANTAGE CORP.

BALANCE SHEETS

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2020.

San Diego, California

March 7, 2023

SCILEX HOLDING COMPANY

CONSOLIDATED BALANC E SHEETS

AS OF DECEMBER 31, 2022 AND 2021

(In thousands, except for par value and share amounts)

December 31, 2022

December 31, 2021

Current assets:

Prepaid expenses

Cash and cash equivalents

Accounts receivable, net

Prepaid expenses and other

Total current assets:

Deferred offering costs

Investments held in Trust Account — US Treasury Securities Money Market Fund

$ 139,923,196

LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY

Property and equipment, net

Operating lease right-of-use asset

Intangibles, net

Other long-term assets

LIABILITIES AND STOCKHOLDERS’

EQUITY/(DEFICIT)

Current liabilities:

Accounts payable and accrued expenses

Accrued offering costs

Advances from related party

Promissory note — related party

Accounts payable

Accrued payroll

Accrued rebates and fees

Accrued expenses

Current portion of deferred consideration

Current portion of debt

Related party payable

Related party note payable

Current portion of operating lease liabilities

Total current liabilities:

Convertible promissory note — related party, net of discount

Conversion option liability

Warrant liability

Deferred underwriting fee payable

Long-term portion of deferred consideration

Long-term debt, net

Related party note payable, net

Derivative liabilities

Operating lease liabilities

Other long-term liabilities

Total liabilities

Commitments and Contingencies

Ordinary shares subject to possible redemption 13,800,000 as of December 31, 2021 and no shares as of December 31, 2020 at redemption value of $ 10.10

Shareholders’ (Deficit) Equity

Preference shares, $ 0.0001 par value;

1,000,000 shares authorized;

none issued or outstanding

Ordinary shares, $ 0.0001 par value;

200,000,000 shares authorized;

3,450,000 non-redeemable shares issued and outstanding at December 31, 2021 and 2020 (1)

Commitments and contingencies (See Note 10)

Stockholders’

equity/(deficit):

Preferred stock, $ 0.0001 par value, 45,000,000 shares authorized;

29,057,097 and 0 issued and outstanding at December 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.0001 par value, 740,000,000 shares authorized;

141,348,856 and 132,858,484 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

( 8,697,444 )

Total Shareholders’ (Deficit) Equity

( 8,697,099 )

TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY

$ 139,923,196

December 31, 2020, includes an aggregate of up to 450,000 ordinary shares that are subject to forfeiture depending on the extent to which

the underwriters’ over-allotment option is exercised (see Note 6).

On January 6, 2021, the Company effected a share capitalization

of 0.2 shares for each share outstanding, resulting in 3,450,000 ordinary shares issued and outstanding (see Note 6).

All share and per

share amounts have been retroactively restated to reflect the share capitalization.

As a result of the underwriters’

full exercise of their overallotment option on January 11, 2021, no shares were forfeited.

The accompanying notes are an integral part

of the financial statements.

VICKERS VANTAGE CORP.

STATEMENTS OF OPERATIONS

Total stockholders’

equity/(deficit)

Total liabilities and stockholders’

equity/(deficit)

See accompanying notes to audited consolidated financial statements

SCILEX HOLDING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021, AND 2020

(In thousands, except for net loss per share amounts)

Year Ended December 31,

For the Period from February 21, 2020 (Inception) Through December 31,

Operating and formation costs

Operating costs and expenses:

Cost of revenue

Research and development

Selling, general and administrative

Intangible amortization

Total operating costs and expenses

Loss from operations

( 1,005,498 )

Other income:

Change in fair value of warrants

Loss on initial issuance of private warrants

( 2,599,200 )

Change in fair value of conversion option liability

Interest expense — debt discount

Transaction costs allocated to warrant liabilities

Interest earned on investments held in Trust Account

Total other income, net

Net income (loss)

Basic weighted average shares outstanding, ordinary shares (1)

Basic net income (loss) per share, ordinary shares

Diluted weighted average shares outstanding, ordinary shares

Diluted net income (loss) per share, ordinary shares

(1) At December 31, 2020, excludes

an aggregate of up to 450,000 ordinary shares that were subject to forfeiture.

The accompanying notes are an integral part

of the financial statements.

VICKERS VANTAGE CORP.

OF CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITY

Ordinary Shares

Shareholders’

Balance – February 21, 2020 (inception)

Issuance of ordinary shares to Sponsor

Cancellation of ordinary shares

Issuance of ordinary shares to Sponsor

Balance – December 31, 2020 (audited)

Accretion of ordinary shares subject to redemption

( 9,474,606 )

( 9,499,261 )

Balance – December 31, 2021 (audited)

$ ( 8,697,444 )

$ ( 8,697,099 )

The accompanying notes are an integral part

of the financial statements.

VICKERS VANTAGE CORP.

STATEMENTS OF CASH FLOWS

Other (income) expense:

(Gain) loss on derivative liability

(Gain) loss on debt extinguishment, net

Scilex Pharma Notes principal increase

Interest expense

Loss (gain) on foreign currency exchange

Total other (income) expense

Loss before income taxes

Income tax expense (benefit)

Net loss per share attributable to common stockholders—basic and diluted

Weighted average number of shares during the period—basic and diluted

See accompanying notes to audited consolidated financial statements

SCILEX HOLDING COMPANY

CONSOLIDATED STATEMENTS OF STOCK HOLDERS’

EQUITY / (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021, AND 2020

(In thousands)

Legacy Common Stock

Preferred Stock

Paid-in Capital

Balance, December 31, 2019

Retroactive application of the recapitalization due to the Business Combination

Balance at December 31, 2019, after the effect of Business Combination

Stock options exercised

Stock-based compensation

Distribution to Sorrento

Cancellation of shares held in escrow related to Semnur Acquisition

Balance, December 31, 2020

Stock-based compensation

Adjustment to shares issued in Semnur Acquisition

Balance, December 31, 2021

Stock options exercised

Aardvark SP-104 license transfer from Sorrento, net of discount

Aardvark SP-104 discount amortization

Shares issued pursuant to the terms of the Debt Exchange Agreement

Shares issued as a result of the Business Combination, net of transaction activities

Shares issued to Yorkville pursuant to Yorkville Purchase Agreement

Stock-based compensation

Balance, December 31, 2022

See accompanying notes to audited consolidated financial statements

SCILEX HOLDING COMPANY

CONSOLIDATED STATEMENTS OF CASH FL OWS

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021, AND 2020

(In thousands)

Year Ended December 31,

For the Period from February 21, 2020 (Inception) Through December 31,

Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Formation cost paid through advances from affiliate of Sponsor

Interest earned on investments held in Trust Account

Change in fair value of warrant liability

( 4,377,600 )

Loss on initial issuance of warrant liability

Change in fair value of conversion option liability

Amortization of debt discount

Transaction costs allocated to private warrants

Operating activities

Adjustments to reconcile net loss to net cash used for operating activities:

Depreciation and amortization

Amortization of debt issuance costs and debt discount

Scilex Pharma Notes principal increase

Payment on the Scilex Pharma Notes attributed to accreted interest related to the debt discount

(Gain) loss on debt extinguishment, net

Non-cash operating lease cost

Stock-based compensation

(Gain) loss on derivative liability

Forfeitures of Private Warrants

Changes in operating assets and liabilities:

Prepaid expenses

Accounts payable and accrued expenses

Net cash used in operating activities

Cash Flows from Investing Activities:

Investment of cash in Trust Account

( 139,380,000 )

Net cash used in investing activities

( 139,380,000 )

Cash Flows from Financing Activities:

Proceeds from sale of Units, net of underwriting discounts paid

Proceeds from sale of Private Placement Warrants

Advances from related party

Repayment of advances from related party

Proceeds from promissory note – related party

Repayment of promissory note – related party

Proceeds from convertible promissory note – related party

Payment of offering costs

Accounts receivables, net

Prepaid expenses and other

Other long-term assets

Accounts payable

Accrued payroll

Accrued expenses

Accrued rebates and fees

Other liabilities

Related party payable

Other long-term liabilities

Net cash used for operating activities

Investing activities

Acquisition consideration paid in cash for Romeg intangible asset acquisition

Purchase of property and equipment

Net cash used for investing activities

Financing activities

Proceeds from the Business Combination

Transaction costs paid related to the Business Combination

Repayment of principal on the Scilex Pharma Notes

Repayment on other loans

Proceeds from other loans

Proceeds from stock options exercised

Proceeds from related party payable

Proceeds from related party note payable

Net cash provided by financing activities

Net Change in Cash

Cash – Beginning of period

Cash – End of period

Non-Cash investing and financing activities:

Deferred underwriting fee payable

Offering costs included in accrued offering costs

Offering costs paid through promissory note – related party

The accompanying notes are an integral part

of the financial statements.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS

Vickers Vantage Corp.

“Company”) is a blank check company incorporated as a Cayman Islands exempted company on February 21, 2020.

The Company was

formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination

with one or more businesses or entities (a “Business Combination”).

The Company is not limited

to a particular industry or sector for purposes of consummating a Business Combination.

The Company is an early stage and emerging growth

company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of December 31, 2021,

the Company had not commenced any operations.

All activity for the period from February 21, 2020 (inception) through December 31, 2021

relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below,

and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination.

The Company will not generate

any operating revenues until after the completion of a Business Combination, at the earliest.

The Company will generate non-operating

income in the form of interest income from the proceeds derived from the Initial Public Offering.

The Company has selected December 31

as its fiscal year end.

The registration statement

for the Company’s Initial Public Offering was declared effective on January 6, 2021.

On January 11, 2021 the Company consummated

the Initial Public Offering of 13,800,000 Units (the “Units” and, with respect to the ordinary shares included in the Units

sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount

of 1,800,000 Units, at $ 10.00 per Unit, generating gross proceeds of $ 138,000,000 which is described in Note 3.

Simultaneously with the closing

of the Initial Public Offering, the Company consummated the sale of 6,840,000 warrants (the “Private Placement Warrants”)

at a price of $ 0.75 per Private Placement Warrant in a private placement to Vickers Venture Fund VI Pte Ltd and Vickers Venture Fund VI

(Plan) Pte Ltd, (the “Sponsor”), generating gross proceeds of $ 5,130,000 , which is described in Note 4.

Transaction costs amounted

to $ 8,149,473 , consisting of $ 2,400,000 in cash underwriting fees, $ 5,190,000 in deferred underwriting fees, and $ 559,473 of other offering

Following the closing of

the Initial Public Offering on January 11, 2021, an amount of $ 139,380,000 ($ 10.10 per Unit) from the net proceeds of the sale of the

Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”),

and invested in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity

of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S.

and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of:

the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders,

as described below.

The Company’s management

has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private

Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business

The stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets

with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (less any deferred underwriting

commissions and taxes payable on the interest earned on the Trust Account).

The Company will only complete a Business Combination if the

post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise

acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under

the Investment Company Act of 1940, as amended (the “Investment Company Act”).

There is no assurance that the Company will

be able to successfully effect a Business Combination.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

The Company will provide

the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public

shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business

Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek shareholder approval of a Business Combination

or conduct a tender offer will be made by the Company, solely in its discretion.

The Public Shareholders will be entitled to redeem their

Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation

of the Business Combination (initially anticipated to be $ 10.10 per Public Share), including interest (which interest shall be net of

taxes payable), divided by the number of then issued and outstanding public shares, subject to certain limitations as described in the

The per-share amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by

the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6).

The Company will proceed

with a Business Combination only if the Company has net tangible assets of at least $ 5,000,001 and, if the Company seeks shareholder approval,

it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a

majority of the shareholders who attend and vote at a general meeting of the Company.

If a shareholder vote is not required and the Company

does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated

Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission

(“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement

with the SEC prior to completing a Business Combination.

If the Company seeks shareholder approval in connection with a Business Combination,

the Company’s Sponsors have agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after

the Initial Public Offering in favor of approving a Business Combination.

Additionally, each Public Shareholder may elect to redeem their

Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

Notwithstanding the foregoing,

if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender

offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting

in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange

Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20 % of the Public Shares without

the Company’s prior written consent.

The Sponsors have agreed

(a) to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion

of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to

modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business

Combination or to redeem 100 % of the Public Shares if the Company does not complete a Business Combination within the Combination Period

(as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination

activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any

such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest

(which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares.

On January 6, 2022, the Company

extended the period of time to consummate a Business Combination from January 11, 2022 to April 11, 2022.

In connection with the extension,

the Sponsors deposited $ 1,035,000 into the trust account in the form of a non-interest bearing loan.

The Company will have until April

11, 2022 to consummate a Business Combination.

However, if the Company anticipates that it may not be able to consummate a Business Combination

by April 11, 2022, the Company may extend the period of time to consummate a Business Combination by an additional three months (until

July 11, 2022 to complete a Business Combination (the “Combination Period”).

In order to extend the time available for the

Company to consummate a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account $ 1,035,000

($ 0.075 per Public Share), on or prior to the date of the applicable deadline, for the three-month extension.

If the Company has not completed

a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up,

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100 % of the Public Shares, at a per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $ 50,000 of

interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding

Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right

to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject

to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each

case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable

There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless

if the Company fails to complete a Business Combination within the Combination Period.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

The Sponsors have agreed

to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete

a Business Combination within the Combination Period.

However, if the Sponsors or any of their respective affiliates acquire Public Shares,

such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination

within the Combination Period.

The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note

6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such

event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the

Public Shares.

In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution

will be less than the amount of funds deposited into the Trust Account ($10.10 per share).

In order to protect the amounts

held in the Trust Account, the Sponsors have agreed that it will be liable to the Company if and to the extent any claims by a third party

(other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company,

or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds

in the Trust Account to below (1) $10.10 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the

date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may

be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the

Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against

certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any

liability for such third-party claims.

The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust

Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered

public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with

the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern and Liquidity

As of December 31, 2021,

the Company had $ 507,921 in its operating bank accounts, and working capital of $ 303,753 .

As of December 31, 2021, approximately $ 31,000

of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations.

If the Company is unable

to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily

be limited to, suspending the pursuit of a Business Combination.

The Company cannot provide any assurance that new financing will be available

to it on commercially acceptable terms, if at all.

As a result of the above,

in connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s

Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue

as a Going Concern,” management has determined that the liquidity condition and date for mandatory liquidation and dissolution raise

substantial doubt about the Company’s ability to continue as a going concern through July 11, 2022 (extension date), the scheduled

liquidation date of the Company if it does not complete a Business Combination prior to such date.

These financial statements do not include

any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should

the Company be unable to continue as a going concern.

If the Company is unable to raise additional capital, it may be required

to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a

Business Combination.

The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms,

NOTE 2 — SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosures:

Supplemental disclosures of non-cash investing and financing activities

Related party debt converted to equity pursuant to Debt Exchange Agreement

Deferred consideration for Romeg intangible asset acquisition

Non-cash consideration in Semnur acquisition

Other loan forgiveness

Promissory Note issued to Sorrento in exchange for the SP-104 license, net of discount

Fair value adjustment to derivative liability in troubled debt restructuring

Acquisition of right-of-use asset

Issuance of shares to Yorkville pursuant to Yorkville Purchase Agreement

Non-cash distribution to Sorrento

Scilex Pharma Notes principal increase

Accrual for transaction costs related to the Business Combination

Transaction costs obligation assumed by Sorrento

See accompanying notes to audited consolidated financial statements

SCILEX HOLDING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nature of Operations and Basis of Presentation

Organization and Principal Activities

Scilex Holding Company (“Scilex”

and together with its wholly owned subsidiaries, the “Company”) is the successor entity to Vickers Vantage Corp.

I (“Vickers”).

Vickers was formed on February 21, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

Scilex was originally formed in 2019 and is a majority-owned subsidiary of Sorrento Therapeutics, Inc.

(“Sorrento”).

Scilex has two wholly owned subsidiaries, Scilex Pharmaceuticals Inc.

(“Scilex Pharma”) and Semnur Pharmaceuticals, Inc.

(“Semnur”).

The Company is a commercial biopharmaceutical company focused on acquiring, developing and commercializing non-opioid management products for the treatment of acute and chronic pain.

The Company launched its first commercial product in October 2018, ZTlido (lidocaine topical system) 1.8% (“ZTlido”), a prescription lidocaine topical system that is designed with novel technology to address the limitations of current prescription lidocaine therapies by providing significantly improved adhesion and continuous pain relief throughout the 12-hour administration period.

The Company in-licensed the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution, an FDA-approved prophylactic treatment for painful gout flares in adults, in the U.S.

(see Note 2).

The Company is planning to commercialize GLOPERBA in 2023.

The Company is currently developing three product candidates, SP-102 (10 mg, dexamethasone sodium phosphate viscous gel), a Phase 3, novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica (“SP-102”

or “SEMDEXA”), SP-103 (lidocaine topical system) 5.4% (“SP-103”), for the treatment of acute low back pain, and SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel formulation for the treatment of fibromyalgia.

Since inception, the Company has devoted substantially all of its efforts to the development of SP-102, SP-103, SP-104, and the commercialization of ZTlido.

The Business Combination

On March 17, 2022, Scilex entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Vickers and Vantage Merger Sub, Inc., a wholly-owned subsidiary of Vickers (“Vickers Merger Sub”).

Pursuant to the terms of the Merger Agreement, Vickers Merger Sub merged with and into Scilex, Inc.

(f/k/a Scilex Holding Company and now a wholly owned subsidiary of Scilex) (“Legacy Scilex"), with Legacy Scilex surviving the merger and becoming a wholly-owned subsidiary of Vickers (collectively, the “Business Combination”).

On November 10, 2022, Vickers consummated the Business Combination pursuant to the terms of the Merger Agreement.

Vickers acquired all of the outstanding equity interests of Legacy Scilex.

As a result of the Business Combination, Scilex received net proceeds of approximately $ 3.4 million .

Additionally, all existing related party indebtedness between Legacy Scilex and Sorrento totaling $ 290.6 million was converted into equity interests in Vickers in connection with the consummation of the Business Combination and pursuant to the terms of the Debt Exchange Agreement (see Note 12).

The Company, as the successor entity of Vickers, will operate as “Scilex Holding Company”

and was listed on the Nasdaq Capital Market under the new ticker symbol “SCLX”

on November 11, 2022.

At the closing of the Business Combination, 197,566,338 and 25,151,428 shares of Legacy Scilex Common Stock (“Legacy Scilex Common Stock”) and Legacy Scilex stock options, respectively, were converted to 133,060,534

shares of Common Stock (“Common Stock”) as part of the consideration using the 0.673498:1 ratio of the Company Common Stock to Legacy Scilex Common Stock (the “Common Stock Exchange Ratio”) and 16,939,436 shares of Common Stock were reserved for Legacy Scilex optionholders.

Pursuant to the terms of the Debt Exchange Agreement (see Note 12), $ 290.6 million was converted to 29,057,097 shares of Preferred Stock (“Preferred Stock”) and 2,905,710 shares of Common Stock.

In addition, pursuant to the terms of the debt agreement entered between the Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd (“Sponsors”) and Vickers (“Vickers Debt Agreement”), the aggregate amount of loans that the Sponsors funded Vickers to finance the transaction costs (“Working Capital Loans”) at the closing of the Business Combination of $ 5,330,557 was converted to 533,057 shares of Common Stock.

The Business Combination was accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, Vickers was treated as the “acquired”

company for accounting purposes and the Business Combination was treated as the equivalent of the Company issuing stock for the net assets of Vickers, accompanied by a recapitalization.

Upon the closing of the Business Combination, the net assets of Vickers were recorded at historical cost, with no goodwill or other intangible assets recorded.

The Company’s legal, accounting and other fees directly attributable to the Business Combination were initially capitalized within prepaid expenses and other current assets on the consolidated balance sheets, of which $ 9.1 million has been offset against the equity proceeds in the Business Combination and $ 0.4 million was attributed to the liability-classified Private Warrants and, as such, were expensed upon the closing of the Business Combination.

Basis of Presentation

The accompanying financial statements have been

prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and pursuant

to the rules and regulations of the SEC.

Emerging Growth Company

The Company is an “emerging

growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012

(the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable

to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the

independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations

regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding

advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging

growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period

which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company,

as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company

nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential

differences in accounting standards used.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.

The accompanying consolidated financial statements include the accounts of the Company as well as its wholly owned subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the financial

statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the reporting period.

Making estimates requires

management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation

or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,

could change in the near term due to one or more future confirming events.

One of the more significant accounting estimates included in

these financial statements is the determination of the fair value of the warrant liabilities.

Such estimates may be subject to change

as more current information because available and accordingly, the actual results could differ significantly from those estimates.

Offering Costs

Offering costs consist of

legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial

Public Offering.

Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a

relative fair value basis, compared to total proceeds received.

Offering costs allocated to warrant liabilities were expensed as incurred

in the statements of operations.

Offering costs associated with the ordinary shares issued were initially charged to temporary equity

and then accreted to ordinary shares subject to redemption upon the completion of the Initial Public Offering.

Offering costs amounting

to $ 8,119,261 were charged to temporary equity upon the completion of the Initial Public Offering, and $ 30,212 of the offering costs were

related to the warrant liabilities and charged to the statements of operations.

Ordinary Shares Subject to Possible Redemption

The Company accounts for

its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”)

Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption is classified as a liability

instrument and is measured at fair value.

Conditionally redeemable ordinary shares (including ordinary shares that features redemption

rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within

the Company’s control) is classified as temporary equity.

At all other times, ordinary shares are classified as shareholders’

The Company’s ordinary shares, sold in the IPO, features certain redemption rights that are considered to be outside of

the Company’s control and subject to occurrence of uncertain future events.

Accordingly, at December 31, 2021 and 2020, ordinary

shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ (deficit) equity section of

the Company’s balance sheets.

Under ASC 480-10-S99, the

Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of redeemable

ordinary shares subject to possible redemption to equal the redemption value at the end of each reporting period.

This method would view

the end of the reporting period as if it were also the redemption date for the security.

Immediately upon the closing of the Initial Public

Offering, the Company recognized the accretion from initial book value to redemption amount value.

The change in the carrying value of

redeemable ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

At December 31, 2021, the

ordinary shares reflected in the balance sheets are reconciled in the following table:

Gross proceeds

$ 138,000,000

Ordinary shares issuance costs

$ ( 8,119,261 )

Accretion of carrying value to redemption value

Ordinary shares subject to possible redemption

$ 139,380,000

Warrant Liability

The Company accounts for

warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms

and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability

pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether

the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification.

This assessment,

which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period

end date while the warrants are outstanding.

We account for the warrants issued in connection with our Initial Public Offering in accordance

with the guidance contained in ASC 815 under which the public warrants meet the criteria for equity treatment and the private warrants

do not meet the criteria for equity treatment and must be recorded as liabilities.

Accordingly, we classify the private warrants as liabilities

at their fair value and adjust the private warrants to fair value at each reporting period.

This liability is subject to re-measurement

at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations.

The fair value

of the warrants was estimated using a Black-Scholes option pricing formula.

The Company accounts for

income taxes under ASC Topic 740, “Income Taxes,” which prescribes a recognition threshold and a measurement attribute for

the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits

to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

The Company’s

management determined that the Cayman Islands is the Company’s major tax jurisdiction.

The Company recognizes accrued interest and

penalties related to unrecognized tax benefits as income tax expense.

As of December 31, 2021 and 2020, there were no unrecognized tax

benefits and no amounts accrued for interest and penalties.

The Company is currently not aware of any issues under review that could result

in significant payments, accruals or material deviation from its position.

The Company is considered

to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes

or income tax filing requirements in the Cayman Islands or the United States.

As such, the Company’s tax provision was zero for

the periods presented.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

Net income (Loss) per Ordinary Share

The Company complies with

accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”.

Net income (loss) per ordinary share is

computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period.

Accretion associated

with the redeemable shares of ordinary shares is excluded from earnings per share as the redemption value approximates fair value.

The calculation of diluted

income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii)

the private placement since the exercise of the warrants is contingent upon the occurrence of future events.

The warrants are exercisable

to purchase 13,740,000 ordinary shares in the aggregate.

As of December 31, 2021 and 2020, the Company did not have any dilutive securities

or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company,

except for the 450,000 founder shares in December 31, 2021 which are no longer forfeitable and thus included for dilutive purposes.

a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.

The following table reflects

the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):

For the Period

from February 21,

2020 (Inception)

Ordinary Shares

Basic net income (loss) per ordinary share

Allocation of net income (loss), as adjusted

Basic weighted average ordinary shares outstanding

Basic net income (loss) per ordinary share

Diluted net income (loss) per ordinary share

Allocation of net income (loss), as adjusted

Diluted weighted average ordinary shares outstanding

Diluted net income (loss) per ordinary share

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

Concentration of Credit Risk

Financial instruments that

potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times

may exceed the Federal Depository Insurance Corporation coverage limit of $ 250,000 .

The Company has not experienced losses on these accounts

and management believes the Company is not exposed to significant risks on such account.

The preparation of these consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of expenses during the reporting period.

Management believes that these estimates are reasonable;

however, actual results may differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash and cash equivalents by periodically evaluating the credit quality of its primary financial institution.

Although the balance at times may exceed federally-insured limits, the Company has not experienced any losses on such accounts.

Fair Value of Financial Instruments

The fair value of the Company’s

assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates

the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature, other than the derivative

warrant liability.

Recent Accounting Standards

does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a

material effect on the Company’s condensed financial statements.

In August 2020, the FASB issued Accounting Standards Update (“ASU”)

2020-06, Debt _Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging _ Contracts in Entity’ Own

Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity (“ASU 2020-06”),

which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and

it simplifies the diluted earnings per share calculation in certain areas.

ASU 2020-06 is effective for fiscal years beginning after December

15, 2023, including interim periods within those fiscal years, with early adoption permitted.

Management is currently evaluating the new

guidance but does not expect the adoption of this guidance to have a material impact on the Company’s condensed financial statements.

does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material

effect on the accompanying condensed financial statements.

NOTE 3 — PUBLIC OFFERING

Pursuant to the Initial Public

Offering, the Company sold to 13,800,000 Units which includes a full exercise by the underwriters of their over-allotment option in the

amount of 1,800,000 Units, at a purchase price of $ 10.00 per Unit.

Each Unit consists of one ordinary share and one-half of one redeemable

warrant (“Public Warrant”).

Each whole Public Warrant entitles the holder to purchase one ordinary share at an exercise price

of $11.50 per whole share (see Note 7).

NOTE 4 — PRIVATE PLACEMENT

Simultaneously with the closing

of the Initial Public Offering, the Sponsors purchased an aggregate of 6,840,000 Private Placement Warrants at a price of $ 0.75 per Private

Placement Warrant, for an aggregate purchase price of $ 5,130,000 , in a private placement.

Each Private Placement Warrant is exercisable

to purchase one ordinary share at a price of $ 11.50 per share, subject to adjustment (see Note 9).

A portion of the proceeds from the

Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account.

If the Company does

not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be

used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will

expire worthless.

NOTE 5 — RELATED PARTY

Founder Shares

On July 16, 2020, the Company

issued an aggregate of 3,593,750 ordinary shares to an affiliate of the Sponsors for an aggregate purchase price of $ 25,000 .

2020, the affiliate transferred his Founder Shares to the Sponsors for the same price paid for such shares.

On October 8.

2020, the Company

effected a share capitalization of 0.2 shares for each share outstanding, on December 7, 2020, the Sponsors forfeited 1,437,500 ordinary

shares, which were cancelled by the Company, and on January 6, 2021, the Company effected a share capitalization of 0.2 shares for each

share outstanding, resulting in 3,450,000 ordinary shares issued and outstanding (the “Founder Shares”).

All share and per-share

amounts have been retroactively restated to reflect the share transactions.

The Founder Shares included an aggregate of up to 450,000

shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, so

that the number of Founder Shares will equal, on an as-converted basis, approximately 20 % of the Company’s issued and outstanding

ordinary shares after the Initial Public Offering.

As a result of the underwriters’ election to partially exercise their over-allotment

option, no Founder Shares are currently subject to forfeiture.

The Sponsors have agreed,

subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until six months after the consummation of a

Business Combination or earlier if, subsequent to a Business Combination, the Company consummates a liquidation, merger, share exchange

or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash,

securities or other property.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

Advances from Related Party

During 2020, an affiliate

of the Sponsors advanced the Company an aggregate of $ 30,000 to fund expenses in connection with the Initial Public Offering.

are non-interest bearing and payable upon demand.

As of December 31, 2021 and 2020, there was $ 0 and $ 30,000 advances outstanding, respectively.

The outstanding amount of $ 30,000 was repaid on February 26, 2021.

Promissory Note — Related

On July 16, 2020, the Company

issued an unsecured promissory note (the “Promissory Note”) to an affiliate of the Sponsors, pursuant to which the Company

may borrow up to an aggregate principal amount of $ 125,000 .

The Promissory Note is non-interest bearing and payable on the earlier of

(i) December 31, 2020 or (ii) the completion of the Initial Public Offering.

The outstanding balance under the Promissory Note of $ 125,000

was repaid subsequent to the closing of the Initial Public Offering on January 14, 2021.

Borrowings under the Promissory Note are

no longer available to the Company.

Related Party Loans

In order to finance transaction

costs in connection with a Business Combination, the Sponsors or an affiliate of the Sponsors, or certain of the Company’s officers

and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).

Capital Loans would be evidenced by promissory notes.

The notes may be repaid upon completion of a Business Combination, without interest,

or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants

at a price of $0.75 per warrant.

Such warrants would be identical to the Private Placement Warrants.

In the event that a Business Combination

does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds

held in the Trust Account would be used to repay the Working Capital Loans.

As of December 31, 2021 and 2020, there were no amounts outstanding

under the Working Capital Loans.

On December 20, 2021, the

Company entered into two convertible promissory notes with the Sponsors pursuant to which the Sponsors agreed to loan the Company up to

an aggregate principal amount of $ 500,000 (the “Convertible Promissory Notes”).

The Convertible Promissory Notes are non-interest

bearing and payable upon Business Combination.

If a Business Combination is not consummated, the Convertible Promissory Notes will not

be repaid by the Company and all amounts owed thereunder by the Company will be forgiven except to the extent that the Company has funds

available to it outside of its Trust Account.

Up to $ 500,000 of the Convertible Promissory Notes may be converted into warrants at a price

of $ 0.75 per warrant at the option of the Sponsors.

The warrants would be identical to the Private Placement Warrants.

As of December

31, 2021, the outstanding principal balance under the Convertible Promissory Notes amounted to an aggregate of $ 500,000 .

Subsequent to

December 31, 2021, on January 6, 2022, the Company borrowed an additional $ 1,035,000 , as discussed below.

On January 27, 2022, Company

entered into two additional Convertible Promissory Notes with the Sponsors pursuant to which the Sponsors agreed to loan the Company up

to an aggregate principal amount of $ 500,000 .

Subsequent to December 31, 2021, the principal balance of the Convertible Promissory Notes

amounted to an aggregate of $ 2,035,000 (see Note 11).

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

The Company assessed the

provisions of the Convertible Promissory Notes under ASC 470-20.

The derivative component of the obligation is initially valued and classified

as a derivative liability (see Note 9).

The debt discount is being

amortized to interest expense as a non-cash charge over the term of the Convertible Promissory Notes, which is assumed to mature in April

2022, the Company’s expected Business Combination date.

During the year ended December 31, 2021, the Company recorded $ 1,826 of interest

expense related to the amortization of the debt discount.

The remaining balance of the debt discount at December 31, 2021 amounted to

Related Party Extension Loans

As discussed in Note 1, the

Company may extend the period of time to consummate a Business Combination up to two times, each by an additional three months (until

July 11, 2022 to complete a Business Combination).

In order to extend the time available for the Company to consummate a Business Combination,

the Sponsor or its affiliates or designees must deposit into the Trust Account $1,035,000 ($0.075 per Public Share in either case), on

or prior to the date of the applicable deadline, for each three-month extension, providing a total possible Business Combination period

up until July 11, 2022 for a total payment value of $2,070,000 ($0.15 per unit in either case).

Any such deposits would be made in the

form of non-interest bearing loans.

Such notes would either be paid upon consummation of a Business Combination, or, at the relevant insider’s

discretion, converted upon consummation of a Business Combination into additional Private Placement Warrants at a price of $ 0.75 per Private

Placement Warrant.

The Sponsor and its affiliates or designees intend, but are not obligated, to fund the Trust Account to extend the

time for the Company to complete a Business Combination.

On January 6, 2022, the Company

extended the period of time to consummate a Business Combination to April 11, 2022.

The Sponsors deposited $ 1,035,000 into the Trust Account

made in the form of non-interest-bearing loans.

If the Company completes an initial business combination, the Company will, at the option

of the Sponsors, repay the amounts evidenced by the Convertible Promissory Notes or convert a portion or all of the total amount into

warrants at a price of $ 0.75 per warrant, which warrants are identical to the Private Placement Warrants issued.

If a Business Combination

is not consummated, the Convertible Promissory Notes will not be repaid by the Company and all amounts owed thereunder by the Company

will be forgiven except to the extent that the Company has funds available to it outside of its Trust Account.

NOTE 6 — COMMITMENTS AND

CONTINGENCIES

Risks and Uncertainties

Management continues to evaluate

the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect

on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily

determinable as of the date of these financial statements.

The financial statements do not include any adjustments that might result from

the outcome of this uncertainty.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

Registration and Shareholder Rights

Pursuant to a registration

rights agreement entered into on January 6, 2021, the holders of the Founder Shares, Private Placement Warrants and underlying ordinary

shares and any securities issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration

rights agreement requiring the Company to register such securities for resale.

The holders of these securities will be entitled to demand

that the Company register such securities at any time after the Company consummates a Business Combination.

In addition, the holders have

certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a

Business Combination.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriters are entitled

to a deferred fee of (i) 3.5% of the gross proceeds of the initial 12,000,000 Units sold in the Initial Public Offering, or $4,200,000,

and (ii) 5.5% of the gross proceeds from the Units sold pursuant to the over-allotment option, or $990,000.

The deferred fee will be paid

in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting

NOTE 7 — SHAREHOLDERS’

Preference Shares — The

Company is authorized to issue 1,000,000 preference shares with a par value of $ 0.0001 per share, with such designations, voting and other

rights and preferences as may be determined from time to time by the Company’s board of directors.

At December 31, 2021 and 2020,

there were no preference shares issued or outstanding.

Ordinary Shares — The

Company is authorized to issue 200,000,000 ordinary shares with a par value of $ 0.0001 per share.

Holders of ordinary shares are entitled

to one vote for each share.

At December 31, 2021, there were 3,450,000 shares of ordinary shares issued and outstanding, excluding 13,800,000

ordinary shares subject to possible redemption which are presented as temporary equity.

At December 31, 2020, there were 3,450,000 ordinary

shares issued or outstanding.

NOTE 8 — WARRANTS

As of December 31, 2021 and

2020, there were 6,900,000 and 0 Public Warrants outstanding, respectively.

Public Warrants may only be exercised for a whole number of

No fractional shares will be issued upon exercise of the Public Warrants.

The Public Warrants will become exercisable on the later

of (a) the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering.

The Public Warrants

will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

No Public Warrants will be

exercisable for cash unless the Company has an effective and current registration statement covering the issuance of the ordinary shares

issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares.

Notwithstanding the foregoing, if a

registration statement covering the issuance of the ordinary shares issuable upon exercise of the Public Warrants is not effective within

90 days from the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement

and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless

basis pursuant to an available exemption from registration under the Securities Act.

If an exemption from registration is not available,

holders will not be able to exercise their warrants on a cashless basis.

The Public Warrants will expire five years after the completion

of a Business Combination or earlier upon redemption or liquidation.

The Company may redeem the

Public Warrants:

● in whole and not in part;

● at a price of $0.01 per warrant;

● at any time while the warrants become exercisable;

● upon not less than 30 days’ prior written notice of redemption to each warrant holder;

● if, and only if, the reported last sale price of the Company’s ordinary shares equals or exceeds $18.00 per share (subject to adjustment) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending on the third trading business day prior to the notice of redemption to the warrant holders;

● if, and only if, there is a current registration statement in effect with respect to the issuance of the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls

the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to

do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number

of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend,

extraordinary dividend or recapitalization, reorganization, merger or consolidation.

However, the warrants will not be adjusted for issuance

of ordinary shares at a price below its exercise price.

The Company has agreed to use its best efforts to have declared effective a prospectus

relating to the ordinary shares issuable upon exercise of the warrants and keep such prospectus current until the expiration of the warrants.

However, if the Company does not maintain a current prospectus relating to the ordinary shares issuable upon exercise of the warrants,

holders will be unable to exercise their warrants for cash and the Company will not be required to net cash settle or cash settle the

warrant exercise.

There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s

If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds

held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive

any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants.

Accordingly, the

warrants may expire worthless.

In addition, if (x) the Company

issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business

Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue

price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsors or

its affiliates, without taking into account any Founder Shares held by the Sponsors or such affiliates, as applicable, prior to such issuance)

(the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity

proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination

(net of redemptions), and (z) the volume weighted average trading price of its ordinary shares during the 20 trading day period starting

on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”)

is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher

of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to

be equal to 180% of the higher of the Market Value and the Newly Issued Price.

At December 31, 2021 and

2020, there were 6,840,000 and 0 Private Placement Warrants outstanding, respectively.

The Private Placement Warrants are identical to

the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants will be exercisable

for cash (even if a registration statement covering the issuance of the ordinary shares issuable upon exercise of such warrants is not

effective) or on a cashless basis, at the holder’s option and will not be redeemable by the Company, in each case so long as they

are held by the initial purchasers or their affiliates.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

NOTE 9 — FAIR VALUE MEASUREMENTS

The fair value of the Company’s

financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with

the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants

at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the

use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions

about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities

based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

At December 31, 2021, assets

held in the Trust Account were comprised of $ 139,410,739 in money market funds which are invested primarily in U.S.

Treasury Securities.

Through December 31, 2021, the Company did not withdraw any of interest earned on the Trust Account.

At December 31, 2020, there were

no assets in the Trust Account.

The following table presents

information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2021

and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Investments held in Trust Account – U.S.

Treasury Securities Money Market Fund

$ 139,410,739

Warrant Liability – Private Placement Warrants

Conversion Option Liability (see Note 5)

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2021

The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values.

Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:

Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability.

The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values.

Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.

As of December 31, 2022 and 2021 , the carrying amount of cash equivalents approximates their fair value based upon quoted market prices.

Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, prepaid expenses, accounts receivable, and accounts payable.

Accounts Receivable, Net

Accounts receivable are presented net of allowances for expected credit losses and prompt payment discounts.

Accounts receivable consists of trade receivables from product sales to customers, which are generally unsecured.

Estimated credit losses related to trade accounts receivable are recorded as general and administrative expenses and as an allowance for expected credit losses within accounts receivable, net.

The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes.

When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for expected credit losses.

The Company determines inventory cost on a first-in, first-out basis.

The Company reduces the carrying value of inventories to a lower of cost or net realizable value for those items that are potentially excess, obsolete or slow- moving.

The Company reserves for excess and obsolete inventory based upon historical experience, sales trends, and specific categories of inventory and expiration dates for on-hand inventory.

Inventory costs resulting from these adjustments are recognized as cost of sales in the period in which they are incurred.

When future commercialization is considered probable and the future economic benefit is expected to be realized, based on management’s judgment, the Company capitalizes pre-launch inventory costs prior to regulatory approval.

As of December 31, 2022 and 2021 , the Company’s inventory was primarily comprised of finished goods.

Property and Equipment, Net

Property and equipment are carried at cost less accumulated depreciation.

Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally five to seven years.

Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the respective lease on a straight-line basis.

The cost of repairs and maintenance is expensed as incurred.

The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including in-process research and development (“IPR&D”) projects and liabilities assumed be recorded at their fair values as of the acquisition date on the Company`s consolidated balance sheets.

Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill.

The determination of estimated fair value requires the Company to make significant estimates and assumptions.

As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill.

Transaction costs associated with business combinations are expensed as they are incurred.

When the Company determines net assets acquired do not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded and contingent consideration such as payments upon achievement of various developmental, regulatory and commercial milestones generally is not recognized at the acquisition date.

In an asset acquisition, up-front payments allocated to IPR&D projects at the acquisition date and subsequent milestone payments are charged to expense in the Company`s consolidated statements of operations unless there is an alternative future use.

The Company has acquired and may continue to acquire the rights to develop and commercialize new product candidates.

Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite-lived until the completion or abandonment of the associated research and development efforts.

Upon commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life.

Capitalized IPR&D is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable.

Goodwill and Other Long-Lived Assets

Goodwill, which has an indefinite life, represents the excess cost over fair value of net assets acquired.

Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment.

The Company has one reporting unit.

During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill.

The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company.

If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary.

Otherwise, the Company performs a quantitative goodwill impairment test.

The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test.

The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, patent rights, and acquired technology, for impairment by considering competition by products prescribed for the same indication, the likelihood and estimated future entry of non-generic and generic competition with the same or similar indication and other related factors.

The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review.

Recoverability is measured by comparison of the assets’

book value to future net undiscounted cash flows that the assets are expected to generate to determine if a write-down to the recoverable amount is appropriate.

If such assets are written down, an impairment will be recognized as the amount by which the book value of the asset group exceeds the recoverable amount.

Contingent Consideration

The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model.

The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with applicable milestones, discount rates and the related probabilities and payment structure in the contingent consideration arrangement.

Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the consolidated statement of operations.

Other than contingent consideration that is accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity, and Topic 815, Derivatives and Hedging , contingent consideration arrangements assumed in an asset acquisition will be measured and accrued when such contingency is resolved.

Public Warrants and Private Placement Warrants

Upon completion of the Business Combination, the Company assumed public and private placement warrants (“Public Warrants”

and “Private Warrants”) that were issued by Vickers in connection with its initial public offering (declared effective by the Securities and Exchange Commission (“SEC”) on January 11, 2021) whereby holders of the public and private placement warrants are entitled to acquire ordinary shares of Vickers.

Subsequent to the Business Combination, the Public Warrants were accounted for as equity per FASB ASC Subtopic No.

815-40, Contracts on an Entity’s Own Equity .

Warrants classified as equity are recorded at their issuance cost and are not subject to remeasurement at each subsequent balance sheet date.

Subsequent to the Business Combination, the Private Warrants were accounted for as liabilities per ASC Subtopic 815-40.

The Private Warrants are not considered indexed to the Company’s stock per ASC Subtopic 815-40 as the fair value calculation applicable upon a cashless exercise of a Private Warrant changes based upon the holder of the instrument, which is not an input to a valuation model for a fixed-for-fixed option contract.

Therefore, Private Warrants are recognized as derivative liabilities at their estimated fair value on November 10, 2022, the date of the closing of the Business Combination, and are revalued at each subsequent balance sheet date, with fair value changes recognized in the statement of operations.

The Company estimates the value of these warrants using a Black-Scholes option pricing formula.

The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates.

This involves estimating future net product sales, determining interest expense, determining the amortization period of the debt discount, as well as determining the classification between current and long-term portions.

Derivative Liabilities

Derivative liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expire, with changes in the fair value between reporting periods recorded as other income or expense.

Research and Development Costs

The Company expenses the cost of research and development as incurred.

Research and development expenses are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and preclinical materials as well as other contracted services, license fees and other external costs.

Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with FASB ASC Topic 730, Research and Development.

The provisions of the FASB ASC Topic 740, Income Taxes , addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.

Under ASC Subtopic 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position.

The Company has determined that it has uncertain tax positions.

The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates.

The Company has deferred tax assets, which are subject to periodic recoverability assessments.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized.

As of December 31, 2022 and 2021 , the Company maintained a full valuation allowance against its deferred tax assets.

The Company determines if an arrangement is a lease at inception.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The operating lease ROU asset also includes any lease payments made and is reduced by lease incentives.

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term in selling, general and administrative expenses.

Revenue Recognition

The Company’s revenue is generated from product sales within the United States.

The Company does not incur significant direct costs to obtain contracts with its customers.

Revenue from product sales is fully comprised of sales of ZTlido.

The Company’s performance obligation with respect to sales of ZTlido is satisfied at a point in time, when control is transferred upon delivery of product to the customer.

The Company considers control to have transferred upon delivery because the customer has legal title to the product,

physical possession of the product has been transferred to the customer, the customer has significant risks and rewards of ownership of the product, and the Company has a present right to payment at that time.

Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant.

The aggregate dollar value of unfulfilled orders as of December 31, 2022 and 2021 were not material.

Revenues from product sales are recorded net of reserves established for commercial and government rebates, fees and chargebacks, wholesaler and distributor fees, sales returns and prompt payment discounts.

Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations.

Rebates and Chargebacks

Rebates are discounts which the Company pays under either government or private health care programs.

Government rebate programs include state Medicaid drug rebate programs, the Medicare coverage gap discount programs and the Tricare programs.

Commercial rebate and fee programs relate to contractual agreements with commercial healthcare providers, under which the Company pays rebates and fees for access to and position on that provider’s patient drug formulary.

Rebates and chargebacks paid under government programs are generally mandated under law, whereas private rebates and fees are generally contractually negotiated by the Company with commercial healthcare providers.

Both types of rebates vary over time.

The Company records a reduction to gross product sales at the time the customer takes title to the product based on estimates of expected rebate claims.

The Company monitors the sales trends and adjusts for these rebates on a regular basis to reflect the most recent rebate experience and contractual obligations.

Reserves for rebates and chargebacks are now separately presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheet.

Prompt Payment Discounts

The Company provides its customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period.

The prompt payment discount reserve is based on actual gross sales and contractual discount rates.

Reserves for prompt payment discounts are included in accounts receivable, net on the consolidated balance sheets.

The Company compensates its customer and others in the distribution chain for wholesaler and distribution services.

The Company has determined such services received to date are not distinct from the Company’s sale of products to the customer and, therefore, these payments have been recorded as a reduction of revenue.

Product Returns

The Company is obligated to accept the return of products sold that are expiring within six months, damaged or do not meet certain specifications.

The Company may authorize the return of products sold in accordance with the term of its sales contracts, and estimates allowances for such amounts at the time of sale.

The Company estimates the amount of its product sales that may be returned by its customer and record this estimate as a reduction of revenue in the period the related product revenue is recognized.

Co-Payment Assistance

Patients who have commercial insurance or pay cash and meet certain eligibility requirements may receive co- payment assistance.

The Company accrues for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators.

Customer Concentration Risk

Prior to April 2, 2022, sales to the Company's sole distributor represented 100 % of net revenue.

On April 2, 2022, the Company announced the expansion of its direct distribution network to national and regional wholesalers and pharmacies.

The distributor continued to provide traditional third-party logistics functions for the Company.

The Company had four customers during the year ended December 31, 2022, which individually generated 10% or more of the Company’s total revenue.

These customers accounted for 83 % of the Company’s revenue for the year ended December 31, 2022, individually ranging between 19 % to 24 % .

As of December 31, 2022, these customers represented 90 % of the Company’s outstanding accounts receivable, individually ranging between 24 % to 36 % .

Additionally, during the fiscal years ended December 31, 2022 and 2021, the Company purchased inventory from its sole supplier, Itochu.

This exposes the Company to concentration of customer and supplier risk.

The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses for the years ended December 31, 2022, 2021, and 2020 .

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation –

Stock Compensation which establishes accounting for equity instruments exchanged for employee and consulting services.

Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee’s requisite service period (generally the vesting period of the equity grant) or non-employee’s vesting period.

The Company accounts for forfeitures as incurred.

For purposes of determining the inputs used in the calculation of stock-based compensation, the Company determines the expected life assumption for options issued using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period since the Company does not have historic exercise behavior.

Then the Company determines an estimate of option volatility based on an assessment of historical volatilities of comparable companies whose share prices are publicly available.

The Company uses these estimates as variables in the Black-Scholes option pricing model.

Depending upon the number of stock options granted, any fluctuations in these calculations could have a material effect on the results presented in our consolidated statement of operations.

Operating segments are identified as components of an entity where separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assessing performance.

The Company has determined that its chief operating decision maker is its Chief Executive Officer, as he is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions.

The Company is engaged primarily in the development of non-opioid products focused on pain management based on its platform technologies and all sales are based in the United States.

Accordingly, the Company has determined that it operates its business as a single reportable segment.

Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities.

Net loss per share has been retrospectively adjusted for all periods presented prior to the Business Combination.

Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options and warrants.

As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.

Recent Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with ASC Topic 606.

ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted.

The Company is evaluating the impact the standard will have on its consolidated financial statements.

Liquidity and Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Management has assessed the Company’s ability to continue as a going concern for at least one year after the date the financial statements are issued.

On March 18, 2019, Scilex acquired Semnur and the acquisition was accounted for as an asset acquisition (see Note 3).

The Company anticipates the cash needed for the development of Semnur’s primary product candidate in development, SP-102, as well in the development of SP-103, will be in excess of the Company’s cash available within one year after the date these consolidated financial statements are issued.

Semnur has no historical revenue and the Company will be responsible for funding all development and commercialization efforts and capital funding needs possibly through private or public equity or debt financings, strategic collaborations or other arrangements.

On May 12, 2022, the Company entered into a Bill of Sale (see Note 3), with Sorrento to acquire rights, title and interest in the SP-104 Assets (see Note 3).

SP-104 has not been approved for commercialization and, as such, no revenues have been generated to date by the asset.

The Company will be responsible for funding all development and commercialization efforts.

On June 14, 2022, the Company entered into a license and commercialization agreement with Romeg (see Note 3).

The transaction was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in the single asset, acquired licenses.

The Company anticipates incurring costs related to the commercial launch and marketing of GLOPERBA.

On September 12, 2022, Scilex and Scilex Pharma entered into a Debt Exchange Agreement (see Note 12) with Sorrento, pursuant to which all related party indebtedness that remained outstanding as of immediately prior to the closing of the Business Combination was converted into equity interests in the Company.

In September 2022, the Company exercised the Early Paydown Provision (see Note 7) to fully extinguish the Scilex Pharma Notes (see Note 7).

In August 2022 and September 2022, the Company made principal payments towards the outstanding Scilex Pharma Notes totaling $ 41.4 million .

Pursuant to Amendment No.

4 (see Note 7), a principal balance of $ 28.0 million was forgiven by the Scilex Pharma Note Purchasers (see Note 7) upon the Company’s exercise of the Early Paydown Provision.

The Company funded the principal payments with cash-on hand and $ 34.0 million received from Sorrento on September 28, 2022 (see Note 7).

As of December 31, 2022 , the Company’s negative working capital was $ 15.2 million , including cash and cash equivalents of approximately $ 2.2 million .

During the year ended December 31, 2022, the Company had operating losses of $ 50.6 million and cash flows used for operations o f $ 21.3 million .

The Company had an accumulated deficit of approximate ly $ 375.9 million as of December 31, 2022.

The Company has plans to obtain additional resources to fund its currently planned operations and expenditures for at least twelve months from the issuance of these consolidated financial statements through a combination of equity offerings, debt financings, collaborations, government contracts or other strategic transactions.

The Company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd.

(“Yorkville”) on November 17, 2022 (as amended and restated on February 8, 2023), and a Standby Equity Purchase Agreement with B.

Riley Principal Capital II, LLC (“B.

Riley”) on January 8, 2023 whereby the Company has the right, but not the obligation, to sell to Yorkville and B.

Riley up to $ 500.0 million each of shares of its Common Stock at its request any time during the 36 months following the date on which the registration statement related to each such purchase agreement has been declared effected by the SEC, subject to certain conditions (see Note 8 and Note 14).

The Company’s plans are also dependent upon the success of future sales of ZTlido, which is still in the early stages of commercialization, and are dependent upon, among other things, the success of the Company’s marketing of ZTlido.

Should the Company’s sales of ZTlido not materialize at the expected rate contemplated in the Company’s business plan, due to the COVID-19 pandemic or other factors, the Company believes that there are a number of ongoing and potential actions that would maintain its projected cash and projected financial position including but not limited to, additional reductions in general and administrative costs, sales and marketing costs, suspension or winding down of clinical development programs for SP-102, SP-103, and SP-104, and other discretionary costs.

Although the Company believes such plans, if executed, should provide the Company with financing to meet its needs, successful completion of such plans is dependent on factors outside the Company’s control.

As such, management cannot conclude that such plans will be effectively implemented within one year after the date that these consolidated financial statements are issued.

As a result, management has concluded that the aforementioned conditions, among other things, raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are issued.

SP-104 Acquisition

On May 12, 2022, the Company entered into a bill of sale and assignment and assumption agreement (the “Bill of Sale”), with Sorrento.

Pursuant to the Bill of Sale, Sorrento sold, conveyed, assigned and transferred to the Company all of its rights, title and interest in and to Sorrento’s Delayed Burst Release Low Dose Naltrexone (“DBR-LDN”) asset and intellectual property rights, for the treatment of chronic pain, fibromyalgia and chronic post-COVID syndrome (collectively, the “SP-104 Assets”).

These assets had previously been acquired by Sorrento from Aardvark

Therapeutics, Inc.

(“Aardvark”) in April 2021 pursuant to an asset purchase agreement (the “Aardvark Asset Purchase Agreement”).

Pursuant to the Bill of Sale, the Company assumed all of Sorrento’s rights, liabilities and obligations under the Aardvark Asset Purchase Agreement (the “SP-104 Acquisition”).

As consideration for the SP-104 Acquisition, the Company issued a promissory note in the aggregate principal amount of $ 5.0 million to Sorrento (the “2022 Promissory Note”).

Upon issuance of the note, the Company recorded a related party note payable of $ 4.1 million , net of discount, with an offset to additional paid in capital, given the common control relationship between Sorrento and the Company.

The 2022 Promissory Note matures seven years from the date of issuance and bears interest at the rate equal to the lesser of (a) 2.66 % simple interest per annum and (b) the maximum interest rate permitted under law.

The 2022 Promissory Note is payable in cash, shares of the Company’s common stock or any combination thereof, at the Company’s sole discretion, and may be prepaid in whole or in part at any time without penalty.

On November 10, 2022, the 2022 Promissory Note was converted to equity, pursuant to the terms of the Debt Exchange Agreement (See Note 12).

As the successor to the Aardvark Asset Purchase Agreement, the Company is obligated to pay Aardvark (i) $ 3,000,000 , upon initial approval by the FDA of a new drug application for the SP-104 Assets (which amount may be paid in shares of the Company’s common stock or cash, in the Company’s sole discretion) (the “Development Milestone Payment”) and (ii) $ 20,000,000 , in cash, upon achievement of certain net sales by the Company of a commercial product that uses the SP-104 Assets (the “Sales Milestone Payment”).

The Company will also pay Aardvark certain royalties in the single digits based on percentages of annual net sales by the Company of a commercial product that uses the SP-104 Assets.

The transaction was accounted for as an asset acquisition as substantially all the value of the gross assets was concentrated in a single asset, SP-104 Assets.

The Sales Milestone Payment and sale volume-based future royalties were determined to meet a scope exception for derivative under ASC Topic 815, Derivatives and Hedging , and will not be recognized until the contingencies are realized in accordance with the Company’s accounting policy for contingent consideration in an asset acquisition.

The Development Milestone Payment represents a liability within the scope of ASC Topic 480, Distinguishing Liabilities from Equity , which will be measured at fair value each reporting period.

As of December 31, 2022, the contingent consideration of $ 0.2 million associated with Development Milestones Payment was recognized under other long-term liabilities.

GLOPERBA License Agreement

On June 14, 2022, the Company entered into a license agreement (the “Romeg License Agreement”) with RxOmeg Therapeutics, LLC (a/k/a Romeg Therapeutics, Inc.) (“Romeg”).

Pursuant to the Romeg License Agreement, among other things, Romeg granted the Company (1) a transferable license, with the right to sublicense, under the patents and know-how specified therein (with such license to know-how being exclusive for the limited purposes specified therein) to (i) commercialize the pharmaceutical product comprising liquid formulations of colchicine for the prophylactic treatment of gout in adult humans (the “Initial Licensed Product”

or “GLOPERBA”) in the United States of America (including its territories) (the “Territory”), (ii) develop other products comprising the Initial Licensed Product as an active pharmaceutical ingredient (the “Licensed Products”) and commercialize any such products and (iii) manufacture Licensed Products anywhere in the world, solely for commercialization in the Territory;

and (2) an exclusive, transferable license, with right to sublicense, to use the trademark GLOPERBA and logos, designs, translations, and modifications thereof in connection with the commercialization of the Initial Licensed Product solely in the Territory.

The Initial Licensed Product, GLOPERBA, was approved and made available in the United States in 2020.

As consideration for the license under the Romeg License Agreement, the Company paid Romeg an up-front license fee of $ 2.0 million , and has agreed to pay Romeg (a) upon the Company’s achievement of certain net sales milestones, certain milestone payments in the aggregate amount of up to $ 13.0 million, (b) certain royalties in the mid-single digit to low-double digit percentages based on annual net sales of the Licensed Product by the Company during the applicable royalty term under the Romeg License Agreement, and (c) minimum quarterly royalty payments totaling $ 7.1 million commencing on the first year anniversary of the effective date of the Romeg License Agreement and ending on the later of (i) expiration of the last to expire of the licensed patents covering the Licensed Products in the Territory or (ii) the tenth anniversary of the effective date of the Romeg License Agreement.

The transaction was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in a single asset, which is the Initial Licensed Product.

In connection with the Romeg License Agreement, the Company recorded an intangible asset for acquired licenses of $ 5.7 million , which is comprised of the upfront license fee of $ 2.0 million and a deferred consideration of $ 3.7 million that is the present value of the future minimum royalty payments and immaterial transaction costs.

The contingent sales milestones and sale volume-based future royalties were determined to meet a scope exception for derivative under ASC Topic 815, and will not be recognized until the contingencies are realized.

No contingent consideration was recognized as a liability or included in the fair value of the assets as of December 31, 2022.

The Company determined the useful life of the intangible asset to be 15 years, which approximates the life of the licensed patents covering the Initial Licensed Product.

Fair Value Measurements

The following table presents the Company’s financial assets and liabilities that are measured at fair value (in thousands):

Fair value measurements at December 31, 2022

Quoted Prices

Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Cash and cash equivalents

Total assets measured at fair value

Derivative liabilities

Other long-term liabilities

Total liabilities measured at fair value

Fair value measurements at December 31, 2021

Quoted Prices

Inputs (Level 2)

Inputs (Level 3)

Cash and cash equivalents

Total assets measured at fair value

Derivative liabilities

Total liabilities measured at fair value

Cash and cash equivalents

The Company’s financial assets carried at fair value are comprised of cash and cash equivalents.

Cash and cash equivalents consist of money market accounts and bank deposits which are highly liquid and readily tradable.

These assets are valued using inputs observable in active markets for identical securities.

Derivative liabilities

The Company recorded a gain of $ 8.3 million , loss of $ 0.3 million, and gain of $ 0.8 million on derivative liabilities for the years ended December 31, 2022, 2021, and 2020, respectively, which was attributed to compound derivative liabilities associated with the Scilex Pharma Notes (see Note 7) and Private Warrants.

The fair value of the derivative liability associated with the Scilex Pharma Notes decreased by $ 30.4 million immediately after entry into Amendment No.

4 (see Note 7) associated with the Scilex Pharma Notes on June 2, 2022.

The fair value of the derivative liability associated with the Scilex Pharma Notes was estimated using the discounted cash flow method combined with a Monte Carlo simulation model including consideration of the terms of Amendment No.

Significant Level 3 assumptions used in the measurement included a 6.1 % risk adjusted net sales forecast and an effective debt yield of 21.5 %.

The Scilex Pharma Notes were fully extinguished in September 2022 (see Note 7) and, as such, there were no remaining loan derivative liabilities associated with the Scilex Pharma Notes as of December 31, 2022.

At the closing of the Business Combination, the Company assumed a derivative warrant liability of $ 2.5 million related to Private Warrants (See Note 8).

The fair value of derivative warrant liability related to Private Warrants was $ 1.2 million as of December 31, 2022.

The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the year ended December 31, 2022:

Ending Balance at December 31, 2019

Loan derivative liability

Re-measurement of fair value

Ending Balance at December 31, 2020

Re-measurement of fair value

Balance at December 31, 2021

Private Warrant liability acquired as part of the Business Combination

Forfeiture of Private Warrants

Change in fair value measurement

Balance at December 31, 2022

Warrant Liability Measurement

The Company established the

initial fair value for the private warrants on January 11, 2021, the date of the Company’s Initial Public Offering, using a Monte

Carlo simulation and subsequently implemented the Black-Scholes Option Pricing Model that was modified to capture the redemption features

of the public warrants.

The underlying assumptions in the Black-Scholes option pricing model include the underlying share price, risk-free

interest rate, estimated volatility and the expected term.

The primary unobservable inputs utilized in determining the fair value of the

private warrants are the expected volatility of the Company’s ordinary shares and the Company’s ordinary share price.

expected volatility of the ordinary shares was determined based on implied volatilities of public warrants issued by selected guideline

companies and was estimated to be 10% before the expected business combination and 20% after the expected business combination.

share price was determined based on an iterative procedure that matched the estimated value of the ordinary shares and fractional warrant

price to equate to the observed price of the outstanding units.

The risk-free interest rate is based on the U.S.

Treasury yield curve

in effect on the date of valuation equal to the remaining expected life of the private warrants.

The dividend yield percentage is zero

because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the warrants.

life of the warrants is assumed to be equivalent to their remaining contractual term.

Inputs are re-evaluated each quarterly reporting

period to estimate the fair market value of the private placement warrants as of the reporting period.

There were no transfers between Levels 1, 2 or 3 during the year ended

The derivative warrant liability was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value measurement.

The primary unobservable input utilized in determining the fair value of the warrant is the expected volatility of the Common Stock.

The expected volatility assumption is based on historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants.

A summary of the inputs used in valuing the derivative warrant liabilities is as follows:

December 31, 2022

The following table provides

quantitative information regarding Level 3 fair value measurements:

November 10, 2022

Exercise Price

Term (in years)

1 unchanged sentence

Dividend yield

Fair value of warrants

The following table presents

the changes in the fair value of warrant liabilities:

Fair value as of January 1, 2021

Initial measurement on January 11, 2021

Change in valuation inputs or other assumptions

( 4,377,600 )

Fair value as of December 31, 2021

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

Call option value

Contingent Consideration

The Development Milestone Payment represents a liability under the scope of ASC Topic 480, Distinguishing Liabilities from Equity , as it pertains to a potential contractual obligation to settle a fixed value in a variable number of shares of Common Stock.

Upon the achievement of FDA approval for a new drug application for SP-104, the Company will transfer $ 3.0 million in cash or shares of Common Stock, at the discretion of the Company.

The fair value of the contingent consideration liability associated with Development Milestone Payment was estimated using a probability-weighted discounted cash flow method.

Significant Level 3 assumptions included the likelihood of receiving FDA approval for SP-104, expected timing for receipt of FDA approval for SP-104, and a discount rate of 10.0 % .

As of December 31, 2022, the fair value of contingent consideration related to the Development Milestone Payment was $ 0.2 million .

There were no transfers between fair value measurement levels during the years ended December 31, 2022, 2021, and 2020 .

Property and Equipment, Net

Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands):

Computers & equipment

Leasehold improvements

Construction in progress

Property and equipment, gross

Accumulated depreciation

Property and equipment, net

Depreciation expense for each of the years ended December 31, 2022, 2021, and 2020 was $ 40 thousand, $ 39 thousand, and $ 40 thousand, respectively.

Goodwill and Intangible Assets

As of December 31, 2022 and December 31, 2021, the Company had recorded goodwill of $ 13.5 million .

The Company performed a qualitative test for goodwill impairment during the fourth quarter of 2022.

Based upon the results of the qualitative testing, the Company concluded that it is more-likely-than-not that the fair value of the Company’s goodwill was in excess of the carrying value and therefore performing the first step of the two-step

impairment test was unnecessary.

The conclusion has not changed as of December 31, 2022 and no goodwill impairment was recognized for the years ended December 31, 2022 and 2021.

The Company’s intangible assets, excluding goodwill, are composed of patent rights, acquired technology, acquired licenses, and assembled workforce.

Amortization of the intangible assets that have finite useful lives is generally recorded on a straight-line basis over their useful lives.

A summary of the Company’s identifiable intangible assets as of December 31, 2022 and December 31, 2021 is as follows (in thousands):

December 31, 2022

Conversion Option Liability Measurement

The Company assessed the

provisions of the Convertible Promissory Notes under ASC 470-20.

The derivative component of the obligation is initially valued and classified

as a derivative liability.

The conversion option was valued using the compound option pricing model, which is considered to be a Level

3 fair value measurement (See Note 6).

Underlying warrant value

Exercise price

Holding period

Risk-free rate

Dividend yield

The following table presents

the change in the fair value of conversion option liability:

Fair value as of January 1, 2021

Initial measurement on December 20, 2021

Change in fair value

Fair value as of December 31, 2021

NOTE 10 — RESTATEMENT OF

PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Restatement 1

The Company previously accounted

for its outstanding Private Placement Warrants (the “Warrants”) issued in connection with its Initial Public Offering as components

of equity instead of as derivative liabilities.

The warrant agreement governing the Warrants includes a provision that provides for potential

changes to the settlement amounts dependent upon the characteristics of the holder of the warrant.

On April 12, 2021, the Acting

Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued

a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled

“Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)”

(the “SEC Statement”).

Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain

tender offers following a business combination, which terms are similar to those contained in the warrant agreement.

In further consideration

of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”)

Subtopic 815-40, Contracts in Entity’s Own Equity.

ASC Section 815-40-15 addresses equity versus liability treatment and classification

of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only

if, among other things, the warrant is indexed to the issuer’s ordinary shares.

Under ASC Section 815-40-15, a warrant is not indexed

to the issuer’s ordinary shares if the terms of the warrant require an adjustment to the exercise price upon a specified event and

that event is not an input to the fair value of the warrant.

Based on management’s evaluation, the Company’s audit committee,

in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s

ordinary shares in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing

of a fixed-for-fixed option on equity shares.

In accordance with ASC Topic

340, Other Assets and Deferred Costs, as a result of the classification of the private warrants as derivative liabilities, the Company

expensed a portion of the offering costs originally recorded as a reduction in equity.

The portion of offering costs that was expensed

was determined based on the relative fair value of the Private Warrants.

VICKERS VANTAGE CORP.

NOTES TO FINANCIAL STATEMENTS

Gross carrying amount

Accumulated amortization

Intangibles, net

Patent rights

Acquired technology

Acquired licenses

Assembled workforce

Total intangible assets

December 31, 2021

Restatement 2

In addition, in connection

with the preparation of the Company’s financial statements as of September 30, 2021, the Company concluded it should restate its

financial statements to classify all Public Shares in temporary equity.

The September 30, 2021 10-Q/A, filed with the SEC on December

8, 2021, includes the restatement of the unaudited March 31, 2021 and June 30, 2021 financial information.

Included in the table below

is the restatement of the audited IPO Balance Sheet as of January 11, 2021 originally filed on Form 8-K filed with the SEC on January

In accordance with ASC 480, paragraph 10-S99, redemption provisions not solely within the control of the Company require ordinary

shares subject to redemption to be classified outside of permanent equity.

The Company previously determined the ordinary shares subject

to possible redemption to be equal to the redemption value of $ 10.10 per ordinary share while also taking into consideration a redemption

cannot result in net tangible assets being less than $ 5,000,001 .

Previously, the Company did not consider redeemable shares classified

as temporary equity as part of net tangible assets.

Effective with these financial statements, the Company revised this interpretation

to include temporary equity in net tangible assets.

Accordingly, effective with this filing, the Company presents all redeemable ordinary

shares as temporary equity and recognizes accretion from the initial book value to redemption value at the time of its Initial Public

Offering and in accordance with ASC 480.

As a result, management has

noted a reclassification adjustment related to temporary equity and permanent equity.

This resulted in an adjustment to the initial carrying

value of the ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available),

accumulated deficit and ordinary shares.

In connection with the change in presentation

for the ordinary shares subject to redemption, the Company also revised its income (loss) per ordinary share calculation to allocate net

income (loss) to ordinary shares.

This presentation contemplates a Business Combination as the most likely outcome, in which case, ordinary

shares share pro rata in the income (loss) of the Company.

The impact of these adjustments to the financial

statement, as previously reported, is presented below.

Restatement 1

Restatement 2

Balance sheet as of February 8, 2021

Warrant Liability

Total Liabilities

Ordinary Shares Subject to Possible Redemption

( 7,729,200 )

Ordinary Shares

Additional Paid-in Capital

( 7,635,396 )

Accumulated Deficit

( 2,629,412 )

( 9,474,606 )

( 12,110,508 )

Total Shareholders’ Equity (Deficit)

$ ( 17,110,171 )

$ ( 12,110,163 )

NOTE 11 — SUBSEQUENT EVENTS

The Company evaluated subsequent

events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued.

did not identify any subsequent events, other than noted below, that would have required adjustment or disclosure in the financial statements.

On January 6, 2022, the Company

extended the period of time to consummate a Business Combination to April 11, 2022.

The Sponsors deposited $ 1,035,000 into the Trust Account

made in the form of non-interest-bearing loans.

If the Company completes an initial business combination, the Company will, at the option

of the Sponsors, repay the amounts evidenced by the Convertible Promissory Notes or convert a portion or all of the total amount into

warrants at a price of $ 0.75 per warrant, which warrants are identical to the Private Placement Warrants issued.

If a Business Combination

is not consummated, the Convertible Promissory Notes will not be repaid by the Company and all amounts owed thereunder by the Company

will be forgiven except to the extent that the Company has funds available to it outside of its Trust Account.

On January 27, 2022, the

Company entered into two additional Convertible Promissory Notes with the Sponsors pursuant to which the Sponsors agreed to loan the Company

up to an additional aggregate principal amount of $ 500,000 .

The aggregate principal balance of the Convertible Promissory Notes amounted

to $ 2,035,000 .

Gross carrying amount

Accumulated amortization

Intangibles, net

Patent rights

Acquired technology

Assembled workforce

Total intangible assets

On June 14, 2022, the Company entered into Romeg License Agreement to acquire an exclusive license to use GLOPERBA from Romeg (see Note 3).

The Company determined the acquisition of licenses to be an asset acquisition.

The fair value of consideration transferred of $ 5.7 million was assigned to acquired licenses with an amortization period of approximately 15 years.

As of December 31, 2022, the weighted average remaining life for identifiable intangible assets was 10.4 years.

Aggregate amortization expense was $ 3.9 million , $ 3.7 million, an d $ 3.7 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Patent rights and acquired technology are amortized over a 15 -year period.

Assembled workforce is amortized over a 5 -year period.

Estimated future amortization expense related to intangible assets at December 31, 2022 is as follows (in thousands):

Year Ended December 31,

2018 Purchase Agreements and Indenture

On September 7, 2018, Scilex Pharma and Sorrento entered into Purchase Agreements (the “2018 Purchase Agreements”) with certain investors (collectively, the “Scilex Pharma Note Purchasers”).

Pursuant to the 2018 Purchase Agreements, on September 7, 2018, Scilex Pharma, among other things, issued and sold to the Scilex Pharma Note Purchasers senior secured notes due 2026 in an aggregate principal amount of $ 224.0 million (the “Scilex Pharma Notes”) for an aggregate purchase price of $ 140.0 million (the “Offering”).

The Scilex Pharma Notes were governed by an indenture (as amended, the “Indenture”) with Scilex Pharma, as issuer, U.S.

Bank National Association, a national banking association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), and Sorrento, as guarantor.

Pursuant to the Indenture, Sorrento agreed to irrevocably and unconditionally guarantee, on a senior unsecured basis, the punctual performance and payment when due of all obligations of Scilex Pharma under the Indenture (the “Guarantee”).

The principal amount of the Scilex Pharma Notes increased by $ 28.0 million on February 15, 2022 as a result of actual cumulative net sales of ZTlido from the issue date of the Scilex Pharma Notes through December 31, 2021 not equal or exceeding $ 481.0 million.

As a result, the Company recorded the increase of $ 28.0 million in principal and non-operating expense at December 31, 2021.

Effective February 14, 2022, Scilex Pharma issued to Sorrento a draw notice under the Letter of Credit as required under the terms of the Indenture because actual cumulative net sales of ZTlido from the issue date of the Scilex Pharma Notes through December 31, 2021 were less than a specified sales threshold for such period.

As a result of the draw notice being issued, Sorrento paid to Scilex Pharma $ 35.0 million in a single lump-sum amount as a subordinated loan and Scilex Pharma became subject to a minimum cash requirement of $ 10.0 million.

In February 2022, Scilex Pharma repurchased Scilex Pharma Notes from the holders thereof on a pro rata basis in an aggregate amount equal to $ 20.0 million.

On June 2, 2022, Sorrento and Scilex Pharma entered into a Consent Under and Amendment No.

4 to Indenture (the “Amendment No.

4”) with U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) and the Scilex Note Purchasers.

Pursuant to Amendment No.

4, (1) on June 3, 2022, Scilex Pharma repurchased approximately $ 41.4 million of the aggregate principal amount of the outstanding Scilex Pharma Notes at 100 % of the principal amount thereof, (2) the Scilex Note Purchasers agreed that Scilex Pharma can repurchase the remaining principal amount of the Scilex Pharma Notes at any time on or before September 30, 2022 for $ 41.4 million (subject to reduction for any quarterly royalty payments) and upon such repurchase the Scilex Note Purchasers will forgive and discharge $ 28.0 million of the aggregate principal amount of the Scilex Pharma Notes (the “Early Paydown Provision”), (3) the minimum cash requirement under the Indenture was reduced to $ 5.0 million in aggregate unrestricted cash equivalents at the end of each calendar month, and (4) the maximum aggregate principal amount on the promissory note issued by Scilex Pharma to Sorrento on October 5, 2018 was increased from up to $ 25.0 million to up to $ 50.0 million.

The Company funded the repurchase with cash-on-hand and $ 15.0 million received from Sorrento on June 2, 2022.

The Company concluded that the Amendment No.

4 was a troubled debt restructuring for accounting purposes.

The future undiscounted cash flows of the Scilex Pharma Notes were higher than the carrying value of the Scilex Pharma Notes at the time of the entry into the Amendment No.

4, and accordingly, no gain was recognized in the quarter ended June 30, 2022.

Due to a decrease of $ 30.4 million in the fair value of the Scilex Notes Derivative caused by the Amendment No.

4, the carrying value of the Scilex Notes was increased by $ 30.4 million.

In September 2022, the Company exercised the Early Paydown Provision to fully extinguish the Scilex Pharma Notes.

In August and September 2022, the Company made principal payments towards the outstanding Scilex Pharma Notes totaling $ 1.7 million and $ 39.7 million , respectively.

Pursuant to Amendment No.

4, $ 28.0 million of principal amount on the Scilex Pharma Notes was forgiven by the Scilex Pharma Note Purchasers and the Scilex Pharma Notes were fully extinguished in September 2022.

The Company funded the repurchase with cash-on-hand and $ 34.0 million received from Sorrento on September 28, 2022.

The Company recorded a gain on debt extinguishment of $ 28.6 million as a result of the extinguishment.

Borrowings of the Scilex Notes consisted of the following (in thousands):

December 31, 2021

Unamortized debt discount

Unamortized debt issuance costs

Carrying value

Current portion

Long term portion

Estimated fair value

The Company made principal payments of $ 106.0 million , $ 45.9 million, and $ 69.8 million during the years ended December 31, 2022, 2021, and 2020, respectively.

The amount of debt discount and debt issuance costs included in interest expense for the years ended December 31, 2022, 2021, and 2020 was approximately $ 3.1 million , $ 7.9 million and $ 10.7 million, respectively.

The Company recorded a gain on debt extinguishment of $ 28.6 million , a loss on debt extinguishment of $ 12.5 million, and no gain/loss on debt extinguishment in connection with its repayments of principal made during the years ended December 31, 2022, 2021, and 2020 , respectively.

Related Party Notes Payable

On October 5, 2018, Scilex Pharma issued to Sorrento a promissory note (see Note 12).

On March 18, 2019, the Company entered into a note payable with Sorrento (see Note 12).

On February 14, 2022, Sorrento paid to Scilex Pharma $ 35.0 million in a single lump-sum amount as a subordinated loan (see Note 12).

On May 12, 2022, the Company issued Sorrento a promissory note of $ 5.0 million in exchange for the SP-104 Assets (see Note 3).

On November 10, 2022, all existing related party indebtedness between Scilex, Scilex Pharma, and Sorrento was converted into equity interests in the Company in connection with the consummation of the Business Combination and pursuant to the terms of the Debt Exchange Agreement (see Note 12).

2020 Revolving Credit Facility

On December 14, 2020, Scilex Pharma entered into the Credit and Security Agreement (the “Credit Agreement”) with CNH Finance Fund I, L.P.

(“CNH”) which provides Scilex Pharma with the ability to incur indebtedness under an accounts receivable revolving loan facility in an aggregate amount of $ 10.0 million and the incurrence of liens and the pledge of collateral to CNH in connection with the revolving loan facility.

Under the terms of the Credit Agreement, interest will accrue daily on the principal amount outstanding at a rate per annum equal to the Wall Street Journal Prime Rate plus 1.75 %.

All indebtedness incurred and outstanding will be due and payable in full on January 1, 2024;

unless the Credit Agreement is earlier terminated.

As of December 31, 2021 , the outstanding balance was $ 8.8 million.

On February 16, 2022, the Company notified CNH that it was terminating the Credit Agreement, effective March 18, 2022.

Upon termination, all principal balances and interest accrued were settled.

Stockholders’

The consolidated statement of stockholders’

equity has been retroactively adjusted for all periods to reflect the Business Combination and reverse recapitalization described in Note 1.

The balances as of December 31, 2022 and 2021 from the consolidated financial statements of the Company as of that date, share activity (Preferred Stock, Common Stock, and additional paid-in-capital) and per share amounts were retroactively adjusted, where applicable, using the Common Stock Exchange Ratio.

Upon the closing of the Business Combination, pursuant to the terms of the Amended and Restated Certificate of Incorporation, the Company authorized 740,000,000 shares of Common Stock with a par value of $ 0.0001 .

As of December 31, 2022 and December 31, 2021, there were 141,348,856 shares issued and 132,858,484 of Common Stock outstanding, respectively.

In connection with the closing of the Business Combination, all previously issued and outstanding shares of Legacy Scilex Common Stock and Legacy Scilex stock options were converted into shares of Common Stock pursuant to the Common Stock Exchange Ratio.

The Company has retroactively adjusted shares issued and outstanding prior to November 10, 2022 to give effect to the Common Stock Exchange Ratio to determine the number of shares of Common Stock into which they were converted.

The holders of the Common Stock are entitled to one vote for each share of the Common Stock held at all meetings of stockholders.

Common stockholders are entitled to receive dividends whenever funds are legally available and when declared by the Company's board of directors.

No dividends have been declared as of December 31, 2022.The Stockholder Agreement, dated as of September 12, 2022, between Vickers and Sorrento (the “Stockholder Agreement”), provides that the Company will be prohibited from taking certain actions without the consent of Sorrento.

Such actions include, among other things, the payment of dividends on shares of the Common Stock.

Liquidation Rights

Subject to the rights of the holders of Preferred Stock, in the event of our liquidation, dissolution or winding-up, holders of Common Stock are entitled to share equally in the assets available for distribution after payment of all creditors.

Preferred Stock

Upon the closing of the Business Combination, $ 290.6 million of all existing related party indebtedness between Scilex, Scilex Pharma, and Sorrento were cancelled in exchange for the issuance of preferred shares of Scilex (“Series A Preferred Shares”

or “Series A Preferred Stock”).

In connection with the closing of the Business Combination, all issued Scilex Series A Preferred Shares were cancelled and converted into the right to receive 1) one share of

domesticated parent preferred shares (“New Scilex Preferred Stock”

or “Preferred Stock”) par value of $ 0.0001 per share, and 2) one-tenth of one domesticated parent common stock (“New Scilex Common Stock”

or “Common Stock”

and such transaction including cancellation of all the existing related party indebtedness in exchange for Preferred Stock and Common Stock, the “Conversion”

or “Contribution”).

Prior to the Conversion, Legacy Scilex filed a Second Amended Certificate of Incorporation (defined below) to increase the authorized number of shares to 45,000,000 shares and a Certificate of Designation (“Certificate of Designation”) to designate the rights, preferences, and privileges of Scilex Series A Preferred Shares.

In connection with the closing of the Business Combination, the Company filed the Certificate of Designation and issued 29,057,097 shares of the Series A Preferred Stock to Sorrento.

As of December 31, 2022, there were 29,057,097 shares of Preferred Stock outstanding.

There were no Preferred Stock outstanding at December 31, 2021.

The Company’s Board of Directors have authority to issue such shares of Preferred Stock in one or more series, to establish, from time to time the number of shares to be included in each such series, and to fix the dividend, voting, and other rights, preferences, and privileges of the shares.

Other than the Series A Preferred Stock issued to Sorrento in connection with the closing of the Business Combination, there are no other Preferred Stock outstanding and the Company has no current plans to issue any other shares of preferred stock.

The holders of shares of Preferred Stock will be entitled to vote, together with the holders of shares of Common Stock and not separately as a class, on all matters upon which holders of shares of Common Stock have the right to vote.

The holders of shares of Preferred Stock will be entitled to one vote for each share of Common Stock that such share of Preferred Stock would otherwise be convertible into pursuant to a deemed conversion on the record date for the determination of the stockholders entitled to vote.

Pursuant to the Stockholder Agreement, holders of Series A Preferred Stock have the right to designate each director to be nominated, elected or appointed to the Board of Directors of the Company.

The Series A Preferred Stock also has certain protective provisions, such as requiring a written consent of the holders of Series A Preferred Stock to change or amend their rights, powers, privileges, limitations and restrictions.

Holders of the Preferred Stock are not entitled to dividends unless the Company pays dividends to holders of the Common Stock and shall be entitled to receive, when, as and if declared by our Board, such dividends (whether in cash or other property) as are paid to holders of the Common Stock to the same extent as if such holders of Series A Preferred Stock had been deemed to convert their shares of Preferred Stock into Common Stock and had held such shares of Common Stock on the record date for such dividends and distributions.

Such payments will be made concurrently with the dividend or distribution to the holders of the Common Stock.

Liquidation Rights

Subject to the rights of the holders of parity shares (if any), in the event of our liquidation, dissolution or winding-up, holders of Preferred Stock rank senior to the Common Stock and are entitled to share equally in the assets available for distribution after payment of all creditors.

Assumed Public Warrants and Private Warrants

Following the consummation of the Business Combination, holders of the Public Warrants and Private Warrants are entitled to acquire Common Stock of the Company.

The warrants are exercisable on the later of (a) the completion of a Business Combination and (b) 12 months from the closing of Vickers's Initial Public Offering.

The warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

Each warrant entitles the holder to purchase one share of Common Stock for $ 11.50 per share.

If the reported last sale price of the Common Stock equals or exceeds $ 18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders, the Company may redeem all the Public Warrants at a price of $ 0.01 per warrant upon not less than 30 days’

prior written notice.

If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis.

The Company will not be required to net cash settle the warrants.

As of December 31, 2022, there are 6,899,988 Public Warrants outstanding.

In connection with the closing of the Business Combination, 3,104,000 Private Warrants were transferred to Sorrento pursuant to the Warrant Transfer Agreement between Vickers, the Sponsors, Sorrento and Maxim Group, LLC where Sorrento acquired all rights, title and interests to such Private Warrants (“Warrant Transfer Agreement”).

As of December 31, 2022, there are 4,104,000 Private Warrants outstanding, of which 3,104,000 Private Warrants are held by Sorrento and 1,000,000 Private Warrants are held by Sponsors.

Legacy Scilex Common Stock and Preferred Stock

Prior to the Business Combination, Legacy Scilex had the authority to issue 200,000,000 shares of common stock, par value $ 0.0001 per share and 20,000,000 shares of preferred stock, par value $ 0.0001 per share per the Certificate of Incorporation dated February 27, 2019.

The Certificate of Incorporation was amended and restated on March 4, 2019 (“First Amended Certificate of Incorporation”), in which Legacy Scilex had the authority to issue 350,000,000 shares of common stock, par value $ 0.0001 per share and 20,000,000 shares of preferred stock, par value $ 0.0001 per share.

The First Amended and Restated Certificate of Incorporation was amended and restated on November 10, 2022 (“Second Amended Certificate of Incorporation”).

As a result of the Second Amended Certificate of Incorporation, Legacy Scilex had the authority to issue 785,000,000 shares, consisting of 740,000,000 shares of common stock and 45,000,000 shares of preferred stock.

Immediately prior to the Conversion, there were 197,566,338 shares of Legacy Scilex Common Stock outstanding and 29,057,097 shares of Series A Preferred Stock, par value $ 0.0001 per share, of Legacy Scilex outstanding.

Yorkville Standby Equity Purchase Agreement

On November 17, 2022, the Company entered into a Standby Equity Purchase Agreement (the “Yorkville Purchase Agreement”) with Yorkville, whereby the Company has the right, but not the obligation, to sell to Yorkville up to $ 500.0 million of shares of its Common Stock at its request any time during the 36 months following the execution of the Yorkville Purchase Agreement, subject to certain conditions.

Pursuant to the Yorkville Purchase Agreement, the shares of Common Stock, if any, that the Company elects to sell to Yorkville pursuant to a sale of Common Stock (each such sale, a “Yorkville Advance”) will be purchased at a price equal to 98 % of the lowest daily volume weighted

average price of the Common Stock for any trading day (“VWAP”) during the two consecutive trading days commencing on the date of delivery of a written purchase notice to Yorkville (each, a “Yorkville Advance Notice”).

As consideration for Yorkville's commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Yorkville Purchase Agreement, upon execution of the Yorkville Purchase Agreement, the Company issued 250,000 shares of Common Stock to Yorkville and paid $ 10.0 thousand in structuring fees.

The registration statement on Form S-1 (File No.

333-268607) related to the Yorkville Purchase Agreement was filed with the SEC on November 30, 2022 and was declared effective by the SEC on December 9, 2022.

As of December 31, 2022, there were no shares sold to Yorkville under the Yorkville Purchase Agreement.

Refer to Note 14 “Subsequent Event”

below for a subsequent event related to the Yorkville Purchase Agreement.

Stock Incentive and Employee Benefit Plans

The consolidated statements of stockholders’

equity / (deficit) have been retroactively adjusted for all periods to reflect the Business Combination and reverse recapitalization described in Note 1.

The balances as of December 31, 2022, 2021, 2020 from the consolidated financial statements of the Company as of that date, share activity (stock options) and per share amounts were retroactively adjusted, where applicable, using the Common Stock Exchange Ratio.

2017 Equity Incentive Plan

In June 2017, Scilex Pharma adopted the Scilex Pharmaceuticals Inc.

2017 Equity Incentive Plan (the “Scilex Pharma 2017 Plan”).

The Scilex Pharma 2017 Plan reserved 24.0 million shares of Scilex Pharma common stock.

Stock options granted under the Scilex Pharma 2017 Plan typically vest 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining options vest each month thereafter.

The Scilex Pharma 2017 Plan was amended and restated on July 5, 2018.

In connection with the corporate reorganization in March 2019, the Scilex Pharma 2017 Plan was terminated, and each option to purchase Scilex Pharma’s common stock outstanding and unexercised immediately prior to reorganization was cancelled and substituted for that number of options to acquire Legacy Scilex Common Stock.

Scilex Holding Company 2019 Stock Option Plan

The Board of Directors of the Company adopted the Scilex Holding Company 2019 Stock Option Plan (the “2019 Stock Option Plan”

or “Prior Plan”) on May 28, 2019.

The 2019 Stock Option Plan was approved by the Company’s stockholders on June 7, 2019.

As of December 31, 2019, 30.0 million shares of Scilex Common Stock of the Company were reserved for issuance pursuant to the 2019 Stock Option Plan.

Stock options granted under the 2019 Stock Option Plan typically vest with respect to 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining shares on each monthly anniversary thereafter.

Upon the consummation of the Business Combination, the 2019 Stock Option Plan was terminated and no further awards were granted under the 2019 Stock Option Plan thereafter.

However, the 2019 Stock Option Plan will continue to govern outstanding awards granted under the terms of the Equity Incentive Plan (defined below).

Scilex Holding Company 2022 Equity Incentive Plan

The Board of Directors of the Company adopted the Scilex Holding Company 2022 Equity Incentive Plan (the “Equity Incentive Plan”) on October 17, 2022.

The 2022 Equity Incentive Plan was approved by the stockholders and became effective on November 9, 2022.

The total number of common shares for which incentive stock options (“ISOs”) may be granted under the Equity Incentive Plan is not to exceed 14,622,712 shares plus a number of shares of Common Stock equal to the number of shares subject to outstanding stock awards granted under the Prior Plan (“Returning Shares”), if any, as such shares become available from time to time, which the amount will be increased commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to the lesser of (i) 4 % of the total number of shares of Common Stock outstanding on December 31 of the preceding year, (ii) 7,311,356 shares of Common Stock, and (iii) such number of shares of the Common Stock determined by the Board or the compensation committee of the Board prior to January 1 of a given year.

As of December 31, 2022, there were no options to purchase shares of Common Stock outstanding under the Equity Incentive Plan and options to purchase 16,939,436 shares of the Common Stock were outstanding under previous plans.

Total stock-based compensation recorded within operating expenses was $ 5.3 million , $ 5.8 million, and $ 5.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The total unrecognized compensation costs related to unvested employee and non-employee stock option grants as of December 31, 2022 was $ 2.7 million and the weighted average period over which these grants are expected to vest is 1.4 years.

Scilex Holding Company 2022 Employee Stock Purchase Plan

On October 17, 2022, the Board adopted the Scilex Holding Company 2022 Employee Stock Purchase Plan (the “ESPP”).

The ESPP was approved by the stockholders and became effective on November 9, 2022.

The purpose of the ESPP is to secure and retain the services of new employees, to retain the services of existing employees, and to provide incentives for such individuals to exert maximum efforts toward the success of the Company.

The ESPP includes two components.

One component is designed to allow eligible U.S.

employees to purchase the Common Stock in a manner that may qualify for favorable tax treatment under Section 423 of the Internal Revenue Code of 1986 (“Code”) (the “423 Component”) and accordingly, it will be construed in a manner that is consistent with the requirements of Section 423 of the Code.

The other component will permit the grant of purchase rights that do not qualify for such favorable tax treatment (the “Non-423 Component”) in order to allow deviations necessary to permit participation by eligible employees who are foreign nationals or employed outside of the U.S.

while complying with applicable foreign laws, and except as otherwise provided in the ESPP or determined by the Board, it will operate and be administered in the same manner as the 423 Component.

The Board administers the ESPP and will have the authority to determine how and when purchase rights are granted and the provisions of each offering.

Initially, the total number of shares of the Common Stock that may be issued under the ESPP will not exceed 1,462,271 shares of the Common Stock.

The number of shares of the Common Stock that will be reserved for issuance will automatically increase on January 1 of each year for a period of up to ten years, commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to the lesser of

(i) 1 % of the total number of shares of the Common Stock outstanding on December 31 of the immediately preceding calendar year;

(ii) 1,827,839 shares of the Common Stock;

and (iii) such number of shares of the Common Stock determined by the Board or the compensation committee of the Board prior to January 1 of a given year, provided however, that the Board may act prior to January 1 of a given calendar year to provide that there will be no increase for such calendar year or the increase for such year will be a lesser number of shares than the amount set forth in clauses (i) to (iii) above.

As of December 31, 2022 , there were no shares outstanding under the ESPP.

Option Valuation

The Company calculates the fair value of stock-based compensation awards granted to employees and nonemployees using the Black-Scholes option-pricing method.

The Black-Scholes option-pricing method requires the use of subjective assumptions, including stock price volatility, the expected life of stock options, risk free interest rate and the fair value per share of the underlying common stock on the date of grant.

The assumptions used in the Black-Scholes option-pricing method related to options issued to employees and nonemployees for the year ended 2020 is set forth below:

Year Ended December 31,

Weighted –average grant date fair value

Expected dividend yield

Expected stock-price volatility

Risk-free interest rate

Term of options

Fair value per share of common stock on date of grant

Exercise price

Expected dividend yield .

The Company bases the expected dividend yield assumption on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends on the Company’s common stock.

Expected stock-price volatility .

The expected stock-price volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available.

The peer group was developed based on companies in the transdermal patch industry.

In selecting the peer group, management considered publicly-traded transdermal patch companies with existing clinical stage branded and generic transdermal patches.

Management further considered the development stage of the peer group companies.

Risk-free interest rate .

The Company bases the risk-free interest rate assumption on the U.S.

Treasury’s rates for U.S.

Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Expected term of options .

The expected term of options represents the period of time when options are expected to be outstanding.

Because the Company does not have historic exercise behavior, the Company determines the expected term assumption for options issued to directors and employees using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period.

The following represents a summary of the options outstanding at December 31, 2022, 2021, and 2020 and changes during the years then ended (in thousands, other than weighted-average exercise price):

Weighted average exercise price

Aggregate Intrinsic Value

Outstanding at December 31, 2019

Forfeited/Cancelled

Outstanding at December 31, 2020

Forfeited/Cancelled

Outstanding at December 31, 2021

Forfeited/Cancelled

Outstanding at December 31, 2022

Exercisable at December 31, 2022

Employee Benefit Plan

The Company maintains a defined contribution 401(k) plan available to eligible employees, which is administered by Sorrento.

Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations.

The Company made matching contributions to the 401(k) plan totaling $ 0.3 million for each of the years ended December 31, 2022, 2021, and 2020 , respectively.

Commitments and Contingencies

Product Development Agreement

In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with two parties (the “Developers”), one of which is ITOCHU CHEMICAL FRONTIER Corporation (“Itochu”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and SP-103 (the “Products”), for Scilex Pharma.

The Developers initially developed, and have intellectual property rights relating to, the Products.

Pursuant to the Product Development Agreement, Scilex Pharma acquired an exclusive right to develop and commercialize the Products worldwide except for Japan.

The Developers are responsible for sourcing and supplying lidocaine for development and commercialization purposes.

Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25 % and 35 % to the Developers based on net profits.

During the year ended December 31, 2022, Scilex Pharma made royalty payments in the amount of $ 2.3 million .

As of December 31, 2022, Scilex Pharma had ending balances of accrued royalty payables of $ 2.2 million .

Net profits are defined as net sales, less cost of goods and marketing expenses.

Net sales are defined as total gross sales of any Product, less all applicable deductions, to the extent accrued, paid or allowed in the ordinary course of business with respect to the sale of such Product, and to the extent that they are in accordance with U.S.

If Scilex Pharma were to sublicense the licensed technologies,

the Developers will receive the same proportion of any sublicensing fees received therefrom.

The Product Development Agreement will continue in full force and effect until October 2, 2028 , the date that is ten years from the date of the first commercial sale of ZTlido.

The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon 6-month written notice.

On February 16, 2017, Scilex Pharma entered into a Commercial Supply Agreement (as amended, the “Supply Agreement”) with the two Developers to provide commercial supply of ZTlido and SP-103 to Scilex Pharma.

The Supply Agreement contains standard terms regarding term, termination, payment, product quality and supply.

In addition, the agreement provides additional terms regarding the calculation and amount of marketing expenses that may be deducted from net sales for purposes of determining the amount of net profit under the Product Development Agreement.

Exclusive Distribution Agreement

In August 2015, Scilex Pharma entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) to appoint an exclusive third-party logistics distribution provider (the “Distributor”) and as an authorized distributor of record of ZTlido in the United States, its territories, possessions and commonwealths for an agreed schedule of fees, subject to a 3 % annual adjustment.

The Distribution Agreement has an initial term of three years following the first shipment of FDA-approved Product to a commercial customer and shall automatically renew for additional terms of one year each, unless written notice of termination is given by either party at least 30 days prior to the end of the initial term or any renewal term .

In the event of Product recalls, Scilex Pharma is solely responsible for all Product recalls, except in the event where the recalls arise from the Distributor’s negligence or willful misconduct.

Pursuant to the Distribution Agreement, Scilex Pharma will be responsible for delivery of Product to and from the Distributor’s facility, including all costs, expenses and risk of loss associated with such delivery.

From late 2018 to early 2022, ZTlido was sold, and title was transferred, to the Distributor for distribution and sale to wholesalers for a fee of between 1 % to 2 % which was recorded as a gross-to-net sales adjustment.

As the Company continues to expand the commercialization of ZTlido, it has expanded its direct distribution network to national and regional distributors and pharmacies since the beginning of April 2022.

The Company currently holds all necessary wholesaler licenses and commenced selling directly to the main distributor customers as well as pharmacies in April 2022.

Sales Operations Services

In January 2016, Scilex Pharma entered into a project agreement with a vendor to provide sales operations services and detailing services, which was subsequently superseded by a new project agreement entered into in September 2018 (the “Project Agreement”).

In connection with the detailing services, the Project Agreement provides that the vendor will provide Scilex Pharma with full-time sales representatives who shall detail the Product by making calls pursuant to a call plan on targets.

These sales representatives are to be managed by field talent managers and a national project director, each of whom will also be provided by the vendor.

In connection with the sales operation services, the vendor will provide certain services required for the initial implementation and ongoing operation of the sales force.

On July 1, 2020, Scilex Pharma and the vendor entered into a work order in which the parties agreed to convert substantially all of the sales representatives allocated under the Project Agreement to become employees of Scilex Pharma.

The vendor continued to provide sales operations services, fleet management services and sample accountability services.

The work order was in effect until June 30, 2022 and was extended for one year upon the mutual agreement of both parties.

Either party may terminate the work order with 90 days’

Scilex Pharma paid

an implementation fee of $ 59 .0 thousand and will pay fixed monthly fees of $ 63.7 thousand to $ 65.8 thousand for ongoing services.

The Company recognized an expense of $ 0.9 million , $ 1.9 million, and $ 10.5 million within selling, general and administrative expenses for services performed for the years ended December 31, 2022, 2021, and 2020, respectively, including implementation fees, fixed monthly fees and pass-through costs.

In the normal course of business, the Company may be named as a defendant in one or more lawsuits.

Other than the following three lawsuits, the Company is not a party to any outstanding material litigation and management is not aware of any legal proceedings that, individually or in the aggregate, are deemed to be material to the Company’s financial condition or results of operations.

From time to time the Company may become involved in various legal proceedings, including those that may arise in the ordinary course of business.

Sanofi-Aventis U.S.

LLC and Hisamitsu America, Inc.

On February 23, 2021, the Company filed an action in the U.S.

District Court for the Northern District of California against Sanofi-Aventis U.S.

LLC and Hisamitsu America, Inc., two manufacturers of OTC lidocaine patch products, alleging, among other things, false and deceptive advertising and unfair competition under the Lanham Act and California state laws by those companies regarding their respective OTC patch products (the “Sanofi-Aventis & Hisamitsu Litigation”).

This lawsuit seeks, among other relief, damages and an injunction enjoining the defendants from continuing to make false or misleading statements of fact about their respective OTC lidocaine patch products.

The defendants have filed motions to dismiss, which have narrowed slightly the Company's claims, but which motions the court has largely rejected.

Discovery is proceeding.

The case is currently scheduled for trial to begin on July 24, 2023.

The Company cannot make any predictions about the outcome in this matter or the timing thereof.

Former Employee Litigation

On March 12, 2021, the Company filed an action in the Delaware Court of Chancery against Anthony Mack, former President of Scilex Pharma, and Virpax Pharmaceuticals, Inc.

(“Virpax”), a company now headed by Mr.

Mack, alleging, among other things, breach by Mr.

Mack of his non-compete agreement with the Company, breach of fiduciary duty, and tortious interference by Virpax with that non-compete agreement (the “Former Employee Litigation”).

This lawsuit seeks, among other relief, damages and an injunction enjoining Mr.

Mack from further violating his non-compete agreement and enjoining Virpax from tortiously interfering with Mr.

Mack’s non-compete agreement.

The case was tried from September 12, 2022 to September 14, 2022.

Post-trial briefing and closing arguments have been concluded and the case is under submission to the Court.

The Company cannot make any predictions about the outcome in this matter or the timing thereof.

ZTlido Patent Litigation

On June 22, 2022, the Company filed a complaint against Aveva Drug Delivery Systems, Inc., Apotex Corp., and Apotex, Inc.

(together, “Apotex”) in the U.S.

District Court for the Southern District of Florida (the “ZTlido Patent Litigation”) alleging infringement of certain Orange Book listed patents covering ZTlido (the “ZTlido Patents”).

The ZTlido Patent Litigation was initiated following the submission by Apotex, in accordance with the procedures set out

in the Hatch-Waxman Act, of an ANDA.

Apotex’s ANDA seeks approval to market a generic version of ZTlido prior to the expiration of the ZTlido Patents and alleges that the ZTlido Patents are invalid, unenforceable, and/or not infringed.

The Company is seeking, among other relief, an order that the effective date of any FDA approval of Apotex’s ANDA be no earlier than the expiration of the asserted patents listed in the Orange Book, the latest of which expires on May 10, 2031, and such further and other relief as the court may deem appropriate.

Apotex is subject to a 30-month stay preventing it from selling a generic version of ZTlido during that time.

The stay should expire no earlier than November 11, 2024.

Trial in the ZTlido Patent Litigation has not yet been scheduled.

The Company cannot make any predictions about the final outcome of this matter or the timing thereof.

Operating Leases

The Company leases administrative and research and development facilities under various non-cancelable lease agreements.

Facility leases generally provide for periodic rent increases and may include options to extend.

As of December 31, 2022, the Company’s leases have remaining lease terms of approximately 1.6 to 1.9 years.

The term of the Company’s leases does not include extension options that were not reasonably certain to be exercised from its lease terms, ranging from 3 to 5 years.

Many of the Company’s leases are subject to variable lease payments.

Variable lease payments are recognized in the period in which the obligation for those payments are incurred, are not included in the measurement of the right-of-use assets or lease liabilities and are immaterial.

Additionally, the Company subleases certain properties to third parties.

Sublease income is recognized on a straight-line basis and is immaterial.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease.

As of December 31, 2022 , the Company has no finance leases .

The components of lease expense were as follows (in thousands):

Year Ended December 31,

Operating lease cost*

* Inclusive of variable lease costs, sublease income, and impairment, which were immaterial

for the periods presented.

Supplemental quantitative information related to leases includes the following:

Year Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

ROU assets obtained in exchange for new operating lease liabilities

Weighted average remaining lease term in years —

operating leases

Weighted average discount rate —

operating leases

In June 2022, the Company entered into a new non-cancelable lease agreement for an administrative facility in Palo Alto.

The lease includes annual rent increases and the option to extend.

The term of the new lease is 26 months and the Company does not expect to exercise the extension option at the end of the lease.

Approximate future minimum lease payments under operating leases were as follows (in thousands):

Year Ended December 31,

Total lease payments

Less imputed interest

Total lease liabilities

Less current portion of lease liability

Lease liability, net of current portion

Total loss before income taxes for the years ended December 31, 2022, 2021 and 2020 did not include a foreign component.

The components of the provision expense (benefit) were as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands):

Year Ended December 31,

Current income tax expense (benefit):

Total current

Deferred income tax expense (benefit):

Total deferred

Changes in tax rate

Changes in valuation allowance

Total income tax benefit from continuing operations

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2022 and 2021 (in thousands):

Year Ended December 31,

Deferred tax assets:

Net operating loss carryforwards

Debt related interest

Capitalized research and development

Tax credit carryforwards

Stock based compensation

Accrued expense and reserves

Operating lease liabilities

Total deferred tax assets

Less valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Intangible assets

Operating lease right-of-use assets

Total deferred tax liabilities

Net deferred tax liabilities

The reconciliation between U.S.

federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands):

Year Ended December 31,

Income tax benefit at federal statutory rate

Valuation allowance

Debt discount and interest limitation

Compensation expense

Acquisition related charges

Prior year true-up and carryback

State, net of federal tax benefit

Income tax credits and incentives

Income tax benefit

The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the deferred tax assets will not be realized.

Due to such uncertainties surrounding the realization of the deferred tax assets, the Company maintains a valuation allowance of $ 67.5 million against its deferred tax assets as of December 31, 2022.

Realization of the deferred tax assets will be primarily dependent upon the Company's ability to generate sufficient taxable income prior to the expiration of its net operating losses.

As of December 31, 2022, the Company had $ 205.6 million and $ 106.9 million of federal and state net operating loss carryforwards, respectively.

The net operating loss carryforwards begin to expire in 2035 and 2034 for federal and

state, respectively.

The Company also had federal research and development income tax credits of $ 2.0 million which will begin to expire in 2035 .

Internal Revenue Code Section 382 rules apply to limit a corporation's ability to utilize existing net operating loss and tax credit carryforwards once the corporation experiences an ownership change as defined in Section 382.

For the years ended December 31, 2022 and 2021, there was no impact of such limitations on the Company’s income tax provision.

The Company is subject to taxation in U.S.

federal and state tax jurisdictions.

All of the Company’s tax years will remain open for three years for examination by the federal and state tax authorities from the date of utilizations of net operating loss.

There are no active tax compliance audits as of December 31, 2022.

A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands):

Beginning balance

Increase related to prior year tax positions

Decrease related to prior year tax positions

Increase related to current year tax positions

Ending balance

At December 31, 2022, 2021, and 2020, $ 0.4 million , $ 0.4 million and $ 0.4 million, respectively, of the Company’s total unrecognized tax benefits, if recognized, would impact the effective tax rate, however given the full valuation allowance in the jurisdiction in which the unrecognized tax benefits relate to, the impact on the effective tax rate would be nil.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.

No interest or penalties have been recognized as of and for the periods ended December 31, 2022, 2021, and 2020.

The Company believes that no material amount of the liabilities for uncertain tax positions are expected to reverse within 12 months of December 31, 2022 .

Related Party Transactions

As of December 31, 2020, approximately 14.7 % of the outstanding capital stock of the Company was held by Itochu.

On January 13, 2021, 34,889,868 shares of Legacy Scilex representing all outstanding capital stock of Legacy Scilex held by Itochu were acquired by non-related minority shareholders.

Thus, Itochu is not a shareholder subsequent to January 13, 2021.

During the years ended December 31, 2022, 2021, and 2020 the Company purchased approximately $ 6.7 million , $ 5.7 million, and $ 1.0 million respectively, of inventory from Itochu, a previous minority shareholder of the Company and a Developer in the aforementioned Product Development Agreement.

These costs are recorded within cost of revenues and selling, general and administrative expenses in the Company’s statement of operations.

Semnur is party to an Assignment Agreement, dated August 6, 2013 (the “Assignment Agreement”), with Shah Investor LP (“Shah Investor”).

Mahendra Shah, Ph.D., who has served on the Company’s board of directors since March 2019, is the managing partner of Shah Investor.

Pursuant to the Assignment Agreement, Shah Investor assigned certain intellectual property to Semnur and Semnur agreed to pay Shah Investor a contingent quarterly royalty in the low-single digits based on quarterly net sales of any pharmaceutical formulations for local delivery of steroids by

injection developed using such intellectual property, which would include SP-102.

Through December 31, 2022, the Company has made no royalty payments pursuant to the Assignment Agreement.

On January 1, 2017, a Transition Services Agreement (“TSA”) was executed between Scilex Pharma and Sorrento.

Pursuant to the TSA, Sorrento agreed, at the Company’s request, to provide directly or indirectly certain administrative, financial, legal, tax, insurance, facility, information technology and other services.

In addition to the services provided under the TSA, Sorrento retains insurance coverage on behalf of the Company.

During the years ended December 31, 2022, 2021, and 2020 the total cost of services and insurance, including an agreed-upon markup, provided to the Company and recognized in general and administrative expenses was $ 3.8 million , $ 4.0 million, and $ 2.3 million, respectively.

On March 18, 2019, the Company entered into a note payable with Sorrento with an initial principal amount of $ 16.5 million for the acquisition of Semnur.

The note is interest bearing at the lesser of (a) 10 % simple interest per annum, and (b) the maximum interest rate permitted under law.

Interest is due and payable annually.

The note payable is payable upon demand and may be prepaid in whole or in part at any time without penalty or premium.

During the years ended December 31, 2022, 2021, and 2020 Sorrento made advances to the Company in the amount of $ 27.5 million , $ 6.6 million, an d $ 13.7 million respectively, under the note payable.

All outstanding related party indebtedness immediately prior to the closing of the Business Combination was converted to equity pursuant to the Debt Exchange Agreement (defined below) and therefore the last day the debt outstanding was November 10, 2022 (see Note 12).

The outstanding principal balance of the note on November 10, 2022 and December 31, 2021 was $ 47.1 million and $ 19.6 million, respectively, which was recorded under the current related party note payable in the Company’s consolidated balance sheets.

As of November 10, 2022 and December 31, 2021, the Company had ending balances resulting from the accrued interest on the note payable of $ 7.2 million and $ 3.9 million, respectively, which was recorded under related party payable in the Company’s consolidated balance sheets.

The proceeds from the note payable were used to finance the operations of the Company.

On October 5, 2018, Scilex Pharma issued to Sorrento a promissory note in the amount of approximately $ 21.7 million for certain amounts previously advanced to Scilex Pharma by Sorrento (the “Intercompany Note”).

Scilex Pharma may borrow up to an aggregate of $ 25.0 million of principal amount under the note payable.

The promissory note is interest bearing at the lesser of (a) 10 % simple interest per annum, and (b) the maximum interest rate permitted under law.

All outstanding principal amounts and accrued interest was due upon maturity on August 31, 2026 .

On October 22, 2018, Sorrento purchased from the Legacy Scilex 24,117,608 shares of the Legacy Scilex Common Stock in exchange for the repayment of $ 21.7 million of indebtedness under this promissory note.

During the years ended December 31, 2022, 2021, and 2020, Sorrento made advances to Scilex Pharma in the amount of $ 0 , $ 8.1 million, and $ 10.3 million respectively, under the promissory note.

As of November 10, 2022 and December 31, 2021, the Company had ending balances resulting from the accrued interest on the note payable of $ 5.1 million and $ 3.1 million, respectively, which was recorded under related party payable in the Company’s consolidated balance sheets.

As of November 10, 2022 and December 31, 2021, Scilex Pharma’s outstanding principal balance under the promissory note was $ 23.5 million , which was recorded under the non-current related party note payable in the Company’s consolidated balance sheets.

The Company received $ 35.0 million in February 2022 to fund the payment of Scilex Pharma Notes as described in Note 7.

The $ 35.0 million received in February 2022 was due no earlier than February 2030 and was recorded under the non-current related party note payable in the Company’s consolidated balance sheets as of November 10, 2022.

Additional funding received from Sorrento was due on demand and recorded under the related party payable in the Company’s consolidated balance sheets.

As of November 10, 2022, related party payables due to Sorrento included

$ 61.7 million to cover working capital requirements, $ 100.0 million for repurchases of Scilex Pharma Notes, and $ 18.2 million for litigation fees (see Note 7).

As of December 31, 2021 , related party payables due to Sorrento consisted of $ 35.7 million to cover working capital requirements, $ 51.0 million for repurchases of Scilex Pharma Notes, and $ 6.0 million to pay litigation fees.

As of December 31, 2022, the Company had a $ 1.8 million related party receivable from Sorrento related to certain invoices paid on behalf of Sorrento, which was fully reserved (see Note 14).

On May 12, 2022, the Company entered into the Bill of Sale, with Sorrento (see Note 3).

Pursuant to the Bill of Sale, the Company assumed all of Sorrento’s rights, liabilities and obligations under Aardvark Asset Purchase Agreement.

The Company issued the 2022 Promissory Note to Sorrento as consideration transferred.

As of November 10, 2022, the outstanding balance, net of discount, under the 2022 Promissory Note was $ 4.2 million , which was recorded under the non-current related party note payable in the Company’s consolidated balance sheets.

Debt Exchange Agreement

On September 12, 2022, the Company and Scilex Pharma entered into a Contribution and Satisfaction of Indebtedness Agreement (the “Debt Exchange Agreement”) with Sorrento, pursuant to which (i) Sorrento shall contribute to the Company all amounts (including accrued interest thereon, if any) for certain loans and other amounts provided by Sorrento to the Company that remain outstanding as of immediately prior to the closing of the Business Combination (the “Aggregate Outstanding Amount”

or “Outstanding Indebtedness”), including with respect to the Scilex Pharma Notes, an intercompany promissory note issued by Scilex Pharma to Sorrento in the amount of approximately $ 27.5 million for certain amounts previously advanced to Scilex Pharma by Sorrento, and the other notes payable to Sorrento described above (see Note 7), in exchange for the issuance by the Company to Sorrento of Preferred Stock of the Company, (ii) the Company shall contribute to Scilex Pharma the portion of such Outstanding Indebtedness that is owed by Scilex Pharma to Sorrento as a contribution of capital for no consideration, and (iii) upon the occurrence of the events described in clauses (i) and (ii), the Aggregate Outstanding Amount and the Outstanding Indebtedness shall be satisfied in full.

Pursuant to the terms of the Debt Exchange Agreement effective as of immediately prior to, and contingent upon, the closing of the Business Combination, Sorrento elected to contribute the Outstanding Indebtedness to the Company in exchange for the issuance by the Company to Sorrento of that number of shares of preferred stock, par value $ 0.0001 per share, of the Company (subject to adjustment for recapitalizations, stock splits, stock dividends and similar transactions) (the “Exchange Shares”

and such transaction, the “Debt Contribution”) that is equal to (i) the Aggregate Outstanding Amount plus the amount equal to 10 % of the Aggregate Outstanding Amount divided by (ii) $ 11.00 (rounded up to the nearest whole share);

provided, that in no event would the Aggregate Outstanding Amount exceed $ 310,000,000 .

On November 10, 2022, all existing related party indebtedness between Scilex, Scilex Pharma, and Sorrento totaling $ 290.6 million was converted into equity interests in the Company in connection with the consummation of the Business Combination and pursuant to the terms of the Debt Exchange Agreement.

This amount was converted to 29,057,097 shares of Scilex Preferred Stock and 2,905,710 shares of the Company's Common Stock.

Loss Per Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share .

The Company has two classes of shares, which are referred to as Common Stock and Preferred Stock.

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities.

Net loss per share has been retrospectively adjusted for all periods presented prior to the Business Combination.

The retroactive adjustment is based on the same number of weighted average shares outstanding in each historical period.

For the years ended December 31, 2022, 2021, and 2020, basic loss per share is computed using the two-class method.

The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings.

Preferred Stock is not contractually required to share in net losses of the Company.

The following table sets forth the reconciliation of basic and diluted loss per share for the years ended December 31, 2022, 2021, and 2020 (in thousands except per share data):

Year Ended December 31,

Net loss attributable to Scilex

Net loss attributable to participating securities

Net loss attributable to common stockholders

Weighted average common shares outstanding

Effect of Dilutive Securities

Denominator for Diluted Loss per Share - Adjusted for Dilutive Securities

Basic and Diluted Loss Per Share

The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

Year Ended December 31,

Stock options

Public Warrants

Private Warrants

Subsequent Events

The Company has evaluated subsequent events for recognition and disclosure purposes in the audited consolidated financial statements as of December 31, 2022.

Except as described below, or as otherwise indicated in the footnotes, the Company has concluded that no events or transactions have occurred that require disclosure.

Riley Standby Equity Purchase Agreement

On January 8, 2023, the Company entered into a Standby Equity Purchase Agreement (the "B.

Riley Purchase Agreement") with B.

Riley, whereby the Company shall have the right, but not the obligation, to sell to B.

Riley up to $ 500.0 million of its shares of the Company’s Common Stock at the Company's request any time during the 36 months following the execution of the B.

Riley Purchase Agreement, subject to certain conditions.

The Company expects to use the net proceeds received from this for working capital and general corporate purposes.

As consideration for B.

Riley’s commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the B.

Riley Purchase Agreement, the Company issued 250,000 shares of Common Stock to B.

Riley in connection with the execution of the B.

Riley Purchase Agreement on January 12, 2023.

Subsequent to the execution of the B.

Riley Purchase Agreement, the Company sold an aggregate of 127,241 shares of Common Stock pursuant to the B.

Riley Purchase Agreement for aggregate net proceeds to the Company of approximately $ 1 million.

Scilex Holding Company 2023 Inducement Plan

On January 17, 2023, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of the Company adopted the Scilex Holding Company 2023 Inducement Plan (the “Plan”).

The Plan will serve to advance the interests of the Company by providing a material inducement for the best available individuals to join the Company as employees by affording such individuals an opportunity to acquire a proprietary interest in the Company.

The Plan provides for the grant of equity-based awards in the form of non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, and other awards (as set forth under the Plan) solely to prospective employees of the Company or an affiliate of the Company provided that certain criteria are met.

The initial maximum number of shares available for grant under the Plan is 1,400,000 shares of the Company’s Common Stock (subject to adjustment for recapitalizations, stock splits, reorganizations and similar transactions).

Amendment to the Yorkville Purchase Agreement

On February 8, 2023, the Company entered into an Amended and Restated Standby Equity Purchase Agreement with Yorkville (the “A&R Yorkville Purchase Agreement”), amending, restating and superseding the Yorkville Purchase Agreement dated November 17, 2022.

Pursuant to the A&R Yorkville Purchase Agreement, the shares of Common Stock, if any, that the Company elects to sell to Yorkville pursuant to a Yorkville Advance will be purchased at a price equal to 98% of the lowest daily volume weighted average price of the Common Stock for any trading day on the date of delivery of a written purchase notice to Yorkville.

Subsequent to December 31, 2022, the Company sold an aggregate of 85,000 shares of Common Stock pursuant to the A&R Yorkville Purchase Agreement for aggregate net proceeds to the Company of approximately $ 0.6 million.

Elyxyb License

On February 12, 2023, the Company acquired from BioDelivery Sciences International, Inc.

(“BSDI”) and Collegium Pharmaceutical, Inc.

(“Collegium”, and together with BDSI, the “Collegium Sellers”) the rights to certain patents,

trademarks, regulatory approvals, data, contracts, and other rights related to ELYXYB (celecoxib oral solution) (the “Product”) and its commercialization in the United States and Canada (the “Territory”).

As consideration for the acquisition, the Company assumed various rights and obligations under that certain asset purchase agreement, dated August 3, 2021 (the “DRL APA”), between BDSI and Dr.

Reddy’s Laboratories Limited, a company incorporated under the laws of India (“DRL”), including a license from DRL including an irrevocable, royalty-free, exclusive license to know-how and patents of DRL related to the Product and necessary or used to exploit the Product in the Territory.

Additionally, under the Purchase Agreement, the Seller granted the Company an irrevocable, royalty-free, exclusive license to know-how related to the Product and necessary or used to exploit the Product in the Territory.

No cash consideration was or will be payable to Collegium Sellers for such acquisition;

however, the obligations under the DRL APA that were assumed by the Company include obligations to pay royalties for sales of the Product in the Territory for all indications and additional amounts if certain milestones are achieved.

Sorrento Chapter 11 filing

On February 13, 2023, Sorrento, together with its wholly-owned direct subsidiary, Scintilla Pharmaceuticals, Inc., commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

While the Company is majority-owned by Sorrento, the Company is not a debtor in Sorrento’s voluntary Chapter 11 filing and management does not expect this will impact the Company and will continue to operate its business as usual.

As of December 31, 2022, the Company had a $1.8 million receivable from Sorrento, which was fully reserved.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures