2. Liquidity and Going Concern

The accompanying unaudited condensed 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 issuance date of the accompanying unaudited condensed consolidated financial statements.

On December 22, 2023, the Company entered into a Sales Agreement (the “ATM Sales Agreement”) with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC (the “Sales Agents”), which agreement was voluntarily terminated by the Company effective as of March 5, 2025. Pursuant to the ATM Sales Agreement, the Company was able to offer and sell (the “Offering”) shares of Common Stock up to $170.0 million (the “ATM Shares”), through or to the Sales Agents as part of the Offering. The Company had no obligation to sell any shares of Common Stock under the ATM Sales Agreement and could suspend offers thereunder at any time. As of March 31, 2026 and March 31, 2025, no sales of Common Stock had been made under the ATM Sales Agreement.

On June 11, 2024, the Company entered into that certain Commitment Side Letter (the “Commitment Letter”) with FSF 33433 LLC (“FSF Lender”), pursuant to which FSF Lender committed to provide the Company a loan (the “FSF Loan”) in the aggregate amount of $100.0 million (the “Commitment Amount”). The Commitment Amount shall be

payable as follows: (i) $85.0 million no later than the date that is 70 days following the date on which the Company receives the FSF Deposit (as defined below) (the “Outside Date” and the funding of the initial $85.0 million, the “Initial Commitment Closing”) and (ii) the remaining $15.0 million within 60 days following the Initial Closing (the funding of the second $15.0 million, the “Second Closing”). Pursuant to the Commitment Letter, FSF Lender was required to provide the Company a non-refundable deposit in immediately available funds in the aggregate principal amount of $10.0 million (the “FSF Deposit” and the date on which such funds are fully received, the “Deposit Date”), which amount will be creditable towards the $85.0 million required to be funded by FSF Lender at the Initial Commitment Closing. The Company received the FSF Deposit on June 18, 2024 and issued to FSF Lender a warrant to purchase up to an aggregate of 3,250,000 shares of the Common Stock (subject to adjustment for stock dividends, stock splits or similar transactions, provided that there shall not be any adjustments to the exercise price of the warrant in the event the Company combines (by combination, reverse stock split or otherwise) the Common Stock into a smaller number of shares (the “Deposit Warrant”), with an exercise price of $1.20 per share. The exercise price and number of shares of Common Stock issuable upon the exercise of the Deposit Warrant may be subject to certain adjustments in the event of any stock dividend, stock split, recapitalization, reorganization or similar transaction, as described in the Deposit Warrant. The Deposit Warrant is immediately exercisable and will expire five years from the date of issuance. In November 2024, the Company fully satisfied the obligations in respect of the Commitment Letter in respect of the FSF Deposit.

On October 7, 2024, the Company entered into a securities purchase agreement (the “Tranche B Securities Purchase Agreement”) with certain institutional investors (collectively, the “Tranche B Investors”) and Oramed Pharmaceuticals Inc. (“Oramed”, and together with the Tranche B Investors, the “Tranche B Noteholders”), to issue and sell, in a registered offering by the Company directly to the Tranche B Noteholders, a new tranche B of senior secured convertible notes of the Company in the aggregate principal amount of $50.0 million (the “Tranche B Notes”), which notes will mature on the two-year anniversary of the issuance date and will be convertible into shares of Common Stock at a conversion price equal to $36.40 per share. In exchange for the issuance of the Tranche B Notes to the Tranche B Investors, the Company has received an aggregate amount in cash of $22,500,000, excluding fees and expenses payable by the Company. In consideration for the Tranche B Notes issued to Oramed, the Company has received from Oramed an exchange and reduction of the principal balance under the Oramed Note (as defined below) of $22,500,000.

On December 1, 2025, the Company entered into a Non-Recourse Loan and Securities Pledge Agreement (the “Scilex-St. James Loan Agreement”) with St. James Bank & Trust Company Ltd., a corporation existing under the laws of the Bahamas (“St. James” or the “Lender”), pursuant to which the Lender agreed to loan the Company an aggregate principal amount of up to $50.0 million in one or more tranches (the “Scilex-St. James Loans”). The timing and amount of any particular tranche of the Scilex-St. James Loans shall be determined at the sole discretion of the Lender and the Lender shall notify the Company in advance of its intention to fund a particular tranche. The Scilex-St. James Loans are non-recourse loans, which are collateralized by the shares of Datavault Common Stock held by the Company, wherein St. James will act as the custodian over these collateralized shares.

On December 8, 2025, the Company and St. James executed an amendment to the Scilex-St. James Loan Agreement (the “Scilex-St. James Loan Amendment”). The Scilex-St. James Loan Amendment, among other things, increased the maximum amount that may be borrowed under the Scilex-St. James Loan Agreement from $50.0 million to $100.0 million, and increased the number of shares of Datavault Common Stock collateralizing the Scilex-St. James Loans to 85,838,800 shares (see Note 8).

On March 11, 2026, the Company filed a complaint in the United States District Court for the Central District of California against the Lender, certain related parties of the Lender, and The Bank of New York Mellon Corporation (“BNY”). As of that date, the Company had pledged approximately 85.8 million shares of Datavault Common Stock as collateral, which, according to the complaint, were contractually prohibited from being sold absent specified conditions. The Company alleges that the Lender made an unauthorized transfer and sale of the pledged shares through its brokerage accounts, in violation of the terms of the Scilex-St. James Loan Agreement, and further alleges that BNY facilitated the opening and administration of the accounts used in the alleged transactions. The Company is seeking recovery of the pledged shares, compensatory damages in excess of $100 million, punitive damages, disgorgement of profits, and other equitable relief. As of the date of this assessment, the matter remains in the early procedural stages, and no rulings have been issued.

Furthermore, on March 16, 2026 the Lender issued a formal letter to the Company addressing the following matters:

As of the Loan Termination Date, the Company had pledged a total of 85,665,102 shares of Datavault Common Stock as collateral, which were then transferred and sold by the Lender without authorization from the Company through brokerage accounts of the Lender, as described above. Because the Company no longer has control over these shares, they should be derecognized from the balance sheet. Therefore, in substance, the exchangeable debts were settled by forfeiture of the pledged shares. As the shares of Datavault Common Stock are being carried at fair value under ASC 323, upon the derecognition date (i.e. the Loan Termination Date), the shares should be revalued to their then current fair market value with changes in fair value recognized in unrealized gains and losses on equity investments and no further gain or loss should be recognized when shares are considered “disposed”.

As of March 16, 2026, the Loan Termination Date, the Company accounted for its investment in Datavault under the equity method of accounting and had elected the fair value option. In connection with the derecognition of 85,665,102 shares of Datavault Common Stock, the Company evaluated whether the equity method remained appropriate. Following such derecognition, the Company continues to own approximately 21% of Datavault’s outstanding shares and retains the right to appoint two members to Datavault’s board of directors. Based on these factors, the Company determined the equity method of accounting remains appropriate as of March 31, 2026.

As of March 31, 2026, the Company’s negative working capital was $459.8 million, including cash and cash equivalents of approximately $3.4 million. During the three months ended March 31, 2026, the Company had operating losses of $32.2 million and cash flows received from operating activities of $1.1 million. The Company had an accumulated deficit of $965.1 million as of March 31, 2026.

The Company has plans to obtain additional resources to fund its currently planned operations and expenditures and to service its debt obligations (whether under the Oramed Note, the Tranche B Notes or otherwise) for at least twelve months from the issuance of these unaudited condensed consolidated financial statements through a combination of equity offerings, debt financings, collaborations, government contracts or other strategic transactions. The Company’s plans are also dependent upon the success of future sales of ZTlido, ELYXYB and GLOPERBA, among which GLOPERBA and ELYXYB are still in the early stages of commercialization.

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 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 unaudited condensed consolidated financial statements are issued.