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United States securities and exchange commission logo
June 9, 2022
Jeffrey Chi
Chief Executive Officer
Vickers Vantage Corp. I
1 Harbourfront Avenue, #16-06
Keppel Bay Tower, Singapore 098632
Singapore
Re: Vickers Vantage
Corp. I
Registration
Statement on Form S-4
Filed May 13, 2022
File No. 333-264941
Dear Dr. Chi:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed May 13, 2022
Cover Page
1. We note your disclosure
on page 30 and elsewhere that New Scilex will be a controlled
company following the
completion of the Business Combination. Please revise your cover
page to state that you
will be controlled company following the completion of the
Business Combination,
identify the controlling shareholder, including their ownership
percentage, and state
whether you plan to rely on any of the corporate governance
exemptions available to
controlled companies following the completion of the Business
Combination.
Jeffrey Chi
FirstName LastNameJeffrey Chi
Vickers Vantage Corp. I
Comapany
June 9, 2022NameVickers Vantage Corp. I
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2. Please revise the cover page to disclose the expected ownership
percentages in the
combined company of Vickers's public stockholders, the Sponsor and the
Scilex
stockholders if the maximum amount of redemptions of Vickers's
ordinary shares occurs.
Market and Industry Data, page i
3. We note your statements that (i) you have not independently verified
the market
and industry data contained in the proxy statement/prospectus or the
associated
underlying assumptions and (ii) your research has not been verified by
any independent
source. These statements may imply an inappropriate disclaimer of
responsibility with
respect to such information. Please either delete these statements or
specifically state that
you are liable for such information.
Questions and Answers About the Business Combination and the Meeting
What equity stake will current Vickers shareholders and Scilex stockholders
hold in New Scilex
after the closing?, page 7
4. Please revise the response to this question to include a sensitivity
analysis showing a
range of redemption scenarios, including minimum, maximum and interim
redemption
levels. Please also revise to disclose all possible sources and extent
of dilution that
shareholders who elect not to redeem their shares may experience in
connection with the
business combination. Provide disclosure of the impact of each
significant source of
dilution, including the amount of equity held by founders, convertible
securities, including
warrants retained by redeeming shareholders, at each of the redemption
levels detailed in
your sensitivity analysis, including any needed assumptions.
Did the Vickers Board obtain a third-party valuation or fairness opinion in
determining whether
to proceed with the Business Combination?, page 8
5. Please revise the response to this question to (i) reflect your
disclosure on page 110 that
Dr. Jeffrey Chi, your chief executive officer, was a board member of
Aardvark
Therapeutics ("Aardvark") at the time that Aardvark sold certain IP to
Sorrento, which IP
appears to have been subsequently assigned to Scilex; (ii) state, if
true, that an entity
affiliated with Dr. Chi previously invested alongside Sorrento in one
of Aardvark's
financing rounds; and (iii) the CEO of Aardvark is also a board member
and shareholder
of Scilex and suggested Scilex to you as a potential business
combination partner. Please
also revise here and on page 110 to clarify whether your Board
considered these potential
conflicts of interest in evaluating the terms of the Business
Combination and what steps, if
any, your Board took to mitigate any such potential conflicts.
Do any of Vickers's directors or officers have interests that may conflict with
my interests with
respect to the Business Combination?, page 8
6. Please revise the response to this question to quantify the aggregate
dollar amount of what
the sponsor and its affiliates have at risk that depends on completion
of a business
Jeffrey Chi
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Vickers Vantage Corp. I
Comapany
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combination. Include the current value of securities held, loans
extended, fees due, and
out-of-pocket expenses for which the sponsor and its affiliates are
awaiting
reimbursement. Provide similar disclosure for the company s officers
and directors, if
material.
Summary of the Proxy Statement
Scilex Holding Company, page 17
7. Please remove the "first-in-class" and "best-in-class" references here
and throughout the
prospectus as appropriate as these statements are speculative in light
of the current
regulatory status of your product candidates.
Merger Consideration, page 18
8. Please revise your disclosure in this section to quantify the
aggregate amount of Specified
Indebtedness.
Certain Related Agreements and Arrangements, page 23
9. Please revise your disclosure here and on page 132 to disclose how
many shares of New
Scilex Common Stock will have registration rights following the
Closing.
Certain Related Agreements and Arrangements
Underwriting Agreement Amendment, page 24
10. Please revise this section to disclose (i) the effective underwriting
fee on a percentage
basis for each redemption level presented on page 178 and (ii) the
material terms of the
potential promissory note, including whether the note bears interest.
Interests of Certain Persons in the Business Combination, page 24
11. Please disclose the sponsors' and any affiliates total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
12. Please clarify if the sponsors or any affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative rate
of return in the
post-business combination company. Please also highlight the risk that
the sponsors may
be incentivized to complete an acquisition of a less favorable target
company or on terms
less favorable to shareholders rather than liquidate.
Redemption Rights, page 28
13. We note your statements here and on page 121 indicating that if a
holder exercises
redemption rights, such holder "will no longer own securities of
Vickers." Please clarify if
the holders of units will retain their Public Warrants following any
potential redemption of
their public shares.
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Vickers Vantage Corp. I
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June 9, 2022NameVickers Vantage Corp. I
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Risk Factors, page 31
14. Disclose the material risks to unaffiliated investors presented by
taking Scilex Holding
Company public through a merger rather than an underwritten offering.
These risks could
include the absence of due diligence conducted by an underwriter that
would be subject to
liability for any material misstatements or omissions in a
registration statement.
Risks Related to Scilex's Limited Operating History, Financial Condition and
Capital
Requirements
We have identified a material weakness..., page 36
15. Please revise to clarify whether the identified errors in your
financial statements were
corrected with audit adjustments in the appropriate periods and that
the corrections are
properly reflected in the accompanying financial statements.
Background of the Business Combination, page 109
16. Please revise your disclosure to state why Company X was the first
choice of Vickers's
management as opposed to Scilex and to describe the terms upon which
Vickers and
Company X were unable to reach agreement.
17. Please revise your disclosure to provide a complete description of the
valuation
negotiations between Vickers and Scilex. In your revisions, please
quantify the initial
valuation discussed with Scilex prior to your November 18, 2021
meeting and describe
how Vickers arrived at this valuation. Please also discuss any
subsequent adjustment to
the valuation and any material factors considered in reducing the
valuation. Also in your
revisions, please disclose (i) the public market valuation of Sorrento
during the
negotiations; (ii) whether the parties considered Sorrento's market
valuation during
negotiations; and (iii) describe the reasons for any variations
between Sorrento's public
market valuation and the valuation ascribed to Scilex. Finally, please
disclose the
valuation ascribed to Scilex in January 2021 when Sorrento acquired
34,889,868 Scilex
shares and whether Vickers's Board considered this valuation in its
evaluation of the
Business Combination.
Certain Scilex Projected Financial Information, page 116
18. We note the disclaimers throughout this section that readers are
cautioned not to rely
on the projections in making a decision regarding the transaction.
While it is acceptable to
include qualifying language concerning subjective analyses, it is
inappropriate to indicate
that investors cannot rely on disclosure. Please revise accordingly.
Proposal 1 - The Business Combination Proposal
Certain Scilex Projected Financial Information, page 116
19. Please revise your disclosures for each of the projections included to
address each of the
following areas.
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Vickers Vantage Corp. I
Comapany
June 9, 2022NameVickers Vantage Corp. I
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State when these projections were prepared and for what
purpose. To the extent that
a material amount of time has passed since these projections were
prepared, disclose
whether these projections still reflect management s views on
future performance.
Also discuss whether the Vicker s Board considered obtaining
updated projections.
Explain why it is reasonable to project revenues out for 10-11
years given that there
is only one commercialized product that has not meet revenue
expectations under the
Scilex Pharma Notes.
Discuss all material assumptions used to develop the
projections, including when
each projection assumes each product candidate will obtain
regulatory approval by
market, the length of time from approval to commercial
availability, assumptions
about market acceptance / penetration rates, market growth rates,
the impact of
competition, and any other factors or contingencies that would
affect the projections
from materializing. To the extent your projections are based on
multiple scenarios,
discuss that fact, identify the various scenarios used, and how
each scenario was
weighted. Considering the majority of the revenue projections are
for unapproved
product candidates that may not receive FDA approval, provide a
discussion of the
process undertaken to formulate these assumptions.
Provide an analysis of the material differences in assumptions
between the two
presentations for revenue by product candidate. In this regard,
we note the Redwood
revenue projections for ZTLido begin to decline in fiscal year
2026 whereas the
projections prepared by Scilex management shows growth from
fiscal year 2022
through 2031. Similarly, Scilex management assumes significantly
higher amounts
of revenues for SP-102 earlier on.
Disclose the material assumptions used to determine projected
cost of sales, operating
expenses and other expenses.
Material U.S. Federal Tax Consequences, page 165
20. Please (i) revise here and throughout, including on page 12, to state
that your discussion of
the tax consequences of the Business Combination constitutes the
opinion of counsel and
(ii) have counsel provide a tax opinion addressing the tax
consequences to U.S. holders of
Vickers Vantage ordinary shares who hold shares at the time of the
Domestication or
provide us your analysis as to why you do not believe such an opinion
is required. The tax
opinion should address and express a conclusion for each material
federal tax
consequence. For additional guidance concerning assumptions and
opinions subject to
uncertainty, refer to Staff Legal Bulletin No. 19.
Business of Scilex, page 188
21. We note your statements throughout indicating the belief that Scilex's
approach enables a
capital-efficient approach intended to reduce clinical development
costs, expedite
development timelines and efficiently bring novel pain management
therapies to patients.
Please remove claims regarding the expediting of clinical development,
the reduction of
clinical development costs and a faster path to approval as these
statements are
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speculative. You may state, if true, that Scilex's goal is to develop
its product candidates
more efficiently than current industry standards.
22. We note your statement that 147 million and 136 million prescription
and OTC lidocaine
patches were sold in the United States in 2021 and 2020, respectively.
Please revise the
"Our Company" subsection to disclose the number of ZTlido patches sold
during these
periods.
23. Please revise this section, where appropriate, to describe the
material terms of Scilex's
acquisition of Semnur, including the potential milestone payments due
to Semnur's
equityholders in connection with this acquisition.
Our Strategy, page 189
24. We note your statements here and on page 200 indicating that low-dose
naltrexone
hydrochloride has demonstrated "efficacy" in multiple independent
investigator-initiated
trials. Please tell us whether this efficacy was demonstrated in
clinical trials for
fibromyalgia involving product candidates that subsequently were
approved by the FDA
(or an equivalent foreign regulator) for the treatment of
fibromyalgia. To the extent that
these trials evaluated low-dose naltrexone hydrochloride for other
indications, please
revise your disclosure accordingly. In addition, if low-dose
naltrexone hydrochloride has
not received marketing approval for the treatment of fibromyalgia,
please revise your
disclosure to remove any statements claiming efficacy.
Our Solution, page 196
25. We note your characterizations here and elsewhere in the proxy
statement/prospectus of
the results from Scilex's Phase 3 CLEAR trial of SEMDEXA as
"positive", "highly
significant[ly] positive" and "categorically positive." Please also
revise to avoid
characterizing the results of the trial in this manner as this may
create an inference that the
product candidate is more likely to be found safe and effective, which
is a determination
solely in the authority of regulatory agencies such as the FDA. You
may present objective
clinical data from the trial, including whether the trial met its
primary and secondary
endpoints.
We further note your references to certain of Scilex's trials
demonstrating "highly"
statistically significant results. Please revise your disclose to
explain the difference
between "statistically significant" and "highly statistically
significant." Alternatively,
please remove your references to "high" statistical significance.
SP-102 (SEMDEXA) Study Details, page 210
26. Please revise your disclosure here and throughout regarding clinical
trials of Scilex's
product candidates which have yet to secure marketing approval to
specify the frequency
and nature of any adverse events observed in your clinical trials. To
the extent no adverse
events were observed, please so state.
Jeffrey Chi
FirstName LastNameJeffrey Chi
Vickers Vantage Corp. I
Comapany
June 9, 2022NameVickers Vantage Corp. I
June 9,
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Material Agreements, page 216
27. We note your disclaimers that the summaries of Scilex's material
agreements do not
purport to be complete. The summaries of these agreements should
include the material
terms of each agreement. Please revise your disclaimers to clarify
that the material terms
of the agreements are described in the prospectus. Alternatively,
please remove these
disclaimers.
28. Your disclosure on page 38 indicates that if Scilex's total net
profits for ZTlido and SP-
103 are equal to or less than five percent of Scilex's net sales of
ZTlido and SP-103 for a
period of four or more consecutive quarters, Itochu and Oishi have the
right to terminate
the Product Development Agreement. Please revise this section to
disclose whether
Scilex's net profits for ZTlido and SP-103 have historically exceeded
5% of net sales. To
the extent Itochu and Oishi have the right, or previously had the
right, to terminate the
agreement, please so state. Please also revise to define the term
"Developers."
29. Please revise your disclosure in this section to describe Scilex's
ongoing obligations
pursuant to the Aardvark Asset Purchase Agreement, referenced on page
325. In your
revisions, please quantify potential milestone payments as well as
payment-triggering
events as well as future potential royalty payments.
30. Please revise your discussion of the Shah Investor LP Assignment
Agreement to include
any termination provisions, up-front or execution payments received or
paid and the
aggregate amounts paid or received to date under this agreement.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Scilex
Results of Operations, page 241
31. Please disclose the expenses incurred during each period presented for
each of your
product candidates. If you do not track your research and development
costs by project,
please disclose that fact and explain why you do not maintain and
evaluate research and
development expenses by project. Also, provide other quantitative or
qualitative
disclosure that provides more transparency as to the type
of research and development expenses incurred (i.e. by nature or type
of expense) which
should reconcile to total research and development expense.
32. Please expand your analysis of research and development expense to
explain why there
was a decrease in clinical activities for SP-102 and any other
material products during
fiscal year 2021.
33. Please expand your analysis of selling, general and administrative
expenses to explain
why your marketing and commercial operations expenses and legal and
audit fees
increased by $4 million and $7.6 million, respectively, during fiscal
year 2021.
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Comapany
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Liquidity and Capital Resources, page 243
34. Please revise in this section to (i) disclose the total aggregate
amount of Scilex's
indebtedness, including indebtedness owed to Sorrento; (ii) disclose
the aggregate amount
of indebtedness currently outstanding on the Scilex Pharma Notes as
well as the interest
rate; (iii) reflect your disclosure on page 33 indicating that Scilex
must make quarterly
payments, ranging from 15% to 25% of the net sales of ZTlido for the
prior fiscal quarter
pursuant to the Indenture; and (iv) describe which of Scilex's assets
have been pledged to
secure the notes. In your revisions, please quantify quarterly
payments made in recent
periods. Please also clarify whether these quarterly payments reduce
the principal amount
of the notes. Finally, please revise Scilex's liquidity disclosures to
discuss Scilex's
quarterly payment and other royalty obligations with respect to
ZTlido, and describe any
associated impacts on liquidity.
Contingent Consideration, page 245
35. Please revise your disclosure to (i) quantify your contingent
consideration obligations
pursuant to the Semnur acquisition and (ii) describe the milestones
and events that would
trigger Scilex's obligations to make these payments.
Unaudited Pro Forma Condensed Combined Financial Information, page 255
36. Please expand your discussion of the Interim Redemption presentation
to explain why you
chose to assume 60% redemption.
37. Please include a footnote to your tabular presentation of the Total
Shares at the Closing to
include a footnote with the other dilutive securities that will also
be outstanding under
each scenario presented (i.e., public warrants, private placement
warrants, working capital
warrants and Scilex stock options). To the extent that the public
warrants are retained by
redeeming stockholders, please disclose as such and quantify the value
of those public
warrants. Please also address this comment on pages 27 and 120.
Unaudited Pro Forma Condensed Combined Balance Sheet, page 257
38. Please revise your presentation to ensure that each adjustment amount
is disclosed and
properly referenced to the appropriate footnote disclosure. Refer to
the Cash and cash
equivalents and cash and securities held in Trust Account line items
as examples.
Note 1 - Description of the Business Combination, page 259
39. We note that the calculation of the number of New Scilex Common Stock
issuable to
Scilex shareholders and optionholders first reduces the total merger
consideration of $1.5
billion by the aggregate amount owed by Scilex in respect of senior
secured notes due
2026 referred to as Scilex Pharma Notes. Please expand your
disclosures to provide a
discussion of the impact of the business combination to the Scilex
Pharma Notes and
related derivative liabilities. In this regard, we note the change in
control term discussed
Jeffrey Chi
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Vickers Vantage Corp. I
Comapany
June 9, 2022NameVickers Vantage Corp. I
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in Note 8 on page F-37 of Scilex s audited financial statements.
40. Please address the requirement for Vickers to have at least $5,000,001
in net tangible
assets at the Effective Time per your disclosure on page 22 under the
maximum
redemption scenario.
Note 3 - Transaction Adjustments to Unaudited Pro Forma Condensed Combined
Balance Sheet
as of December 31, 2021, page 262
41. Please revise your footnote presentation to clearly show how each
footnote adjustment is
reflected in the total adjustment presented on the face of the pro
forma balance sheet. For
example, we note that the total adjustment for additional paid-in
capital is an
accumulation of multiple adjustments discussed in multiple footnotes.
An investor should
be able to easily understand how each footnote impacts the total
adjustment amount.
42. We note your disclosures on pages 24 and 25 for the Sponsor loans
beginning December
20, 2021. Please tell us your consideration of including the
settlement of these loans,
including those subsequent to the most recent balance sheet date, as
these require
repayment with the completion of an initial business combination.
Security Ownership of Certain Beneficial Owners and Management, page 291
43. Please identify the natural person or persons who directly or
indirectly exercise sole or
shared voting and/or dispositive power with respect to the common
stock held by Vickers
Venture Fund VI Pte Ltd, Shaolin Capital Management LLC and Hudson Bay
Capital
Management LP.
Scilex Holding Company
Notes to Consolidated Financial Statements
13. Related Party Transactions, page F-48
44. Please expand the disclosures for the note payable with Sorrento and
the promissory note
to Sorrento to disclose the payment terms. In this regard, we note
that the note payable is
classified as a current liability, while the promissory note is
classified as a long-term
liability.
45. Please provide disclosure for components of the $92.7 million related
party payable as of
December 31, 2021. In this regard, we note that $37.3 million is for
the Sorrento Letter of
Credit and $3.9 million is accrued interest for the Sorrento note
payable.
15. Subsequent Events
SP-104 Acquisition from Sorrento, page F-50
46. Please expand your disclosures for the SP-104 acquisition to disclose
the accounting for
this transaction and the maximum amounts of regulatory milestone
payments, commercial
sales milestone payments and the percentage of net sales due as
royalty payments.
Jeffrey Chi
Vickers Vantage Corp. I
June 9, 2022
Page 10
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Tracey Houser at 202-551-3736 or Terence O'Brien at
202-551-3355 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Tyler Howes at 202-551-3370 or Alan Campbell at 202-551-4224 with any
other
questions.
Sincerely,
FirstName LastNameJeffrey Chi
Division of
Corporation Finance
Comapany NameVickers Vantage Corp. I
Office of Life
Sciences
June 9, 2022 Page 10
cc: Mitchell Nussbaum, Esq.
FirstName LastName