Common use of Preliminary Purchase Price Allocation Clause in Contracts

Preliminary Purchase Price Allocation. The Company has performed a preliminary valuation analysis of the fair market value of Scilex’s assets and liabilities. The following tables summarize the total consideration and the allocation of the preliminary purchase price as of the acquisition date (in thousands): Closing consideration (includes approximately $5 in cash) $ 4,768 Plus: Fair value of contingent consideration 40,000 Plus: Receivable from Scilex 600 Plus: Fair value of non-controlling interest 13,693 Total consideration $ 59,061 The fair value of non-controlling interest was calculated by starting with an equity value (determined from a standard enterprise value calculation), multiplied by the non-controlling interest share of equity (27.9%) less a 25% discount for lack of marketability. Cash and cash equivalents $ 116 Grants and accounts receivables 22 Prepaid expenses and other 162 Restricted cash 50 Security deposit 43 Property and equipment 243 Intangibles, net 61,240 Goodwill 25,483 Accounts payable (2,653 ) Accrued payroll and related (549 ) Advanced capital (500 ) Current debt (100 ) Deferred tax liabilities (24,496 )(x) Total consideration $ 59,061

Preliminary Purchase Price Allocation. The Company has performed a preliminary valuation analysis of the fair market value of Scilex’s assets and liabilities. The following tables summarize the total consideration and the allocation of the preliminary purchase price as of the acquisition date (in thousands): Closing consideration (includes approximately $5 in cash) $ 4,768 Plus: Fair value of contingent consideration 40,000 Plus: Receivable from Scilex 600 Plus: Fair value of non-controlling interest 13,693 20,831 Total consideration $ 59,061 66,199 The fair value of non-controlling interest was calculated by starting with an equity value (determined from a standard enterprise value calculation), multiplied by the non-controlling interest share of equity (27.9%) less a 25% discount for lack of marketability. Cash and cash equivalents $ 116 Grants and accounts receivables 22 Prepaid expenses and other 162 Restricted cash 50 Security deposit 43 Property and equipment 243 Intangibles, net 61,240 66,350 Goodwill 25,483 29,555 Accounts payable (2,653 2,653) Accrued payroll and related (549 549) Advanced capital (500 500) Current debt (100 100) Deferred tax liabilities (24,496 )26,540) (x) Total consideration $ 59,06166,199