Scilex (NASDAQ:SCLX) stock is plunging 15% after the company delayed its 2023 annual meeting from today until April 17. Scilex, which specializes in developing non-opioid pain treatments, indicated that it wants to give representatives of its shareholders more time to comply with a court order.
The Court Order
Scilex’s parent company, Sorrento (OTCMKTS:SRNEQ), declared bankruptcy because it lost a lawsuit, as I explained in a Feb. 22 article.
On April 4, Sorrento’s bankruptcy court ordered the company to obtain information about the ownership and trading of certain shares of SXLX stock.
Specifically, the court wants information about 76 million shares of Scilex that were given to the owners of Sorrento stock last December. In order to obtain the data, the court told “the top 25 brokers, dealers, banks, and other nominees that act as shareholder agents” to provide the information to a third party, Broadridge Financial.
Lack of Compliance With the Order
Information required by the court about 44 million shares of SCLX stock has not yet been provided to Broadridge, Scliex announced today. Moreover, “multiple brokerage firms” have sought additional time to comply with the order. As a result, Scilex postponed its annual meeting until April 17.
The company added that, by fulfilling the reporting requirements, more shareholders could participate in the meeting.
Background on Scilex
The drug maker’s shares became publicly traded through a merger with a special acquisition company (SPAC) last November. The company currently earns revenue from a lidocaine-based treatment for nerve pain caused by shingles, and it is developing several other offerings.
SCLX stock has a market capitalization of $1.8 billion, and the company generated $38 million in revenue last year.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
