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United States securities and exchange commission logo
July 11, 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
Amendment No. 1 to
Registration Statement on Form S-4
Filed June 27, 2022
File No. 333-264941
Dear Dr. Chi:
We have reviewed your amended 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.
Unless we note
otherwise, our references to prior comments are to comments in our June
9, 2022 letter.
Amendment No. 1 to Registration Statement on Form S-4
Questions and Answers About the Business Combination and the Meeting
What are the possible sources and the extent of dilution that public
shareholders who elect not to
redeem their shares..., page 8
1. We note your response
to prior comment 4 and revised disclosure. Please revise your
response to the
newly-added question at the top of page 8 to include a discussion of
potential sources of
dilution from transactions that may be necessary to complete the
Business Combination,
such as the potential PIPE or the conversion of Scilex debt into
equity securities, as
discussed in your response to prior comment 40. To the extent any
such dilutive
transactions are completed prior to the effectiveness of the proxy
Jeffrey Chi
FirstName LastNameJeffrey Chi
Vickers Vantage Corp. I
Comapany
July NameVickers Vantage Corp. I
11, 2022
July 11,
Page 2 2022 Page 2
FirstName LastName
statement/prospectus, please also revise the ownership table on page 8
to account for these
additional equity issuances.
What are the U.S. federal income tax consequences of exercising my redemption
rights?, page 13
2. We note your response to prior comment 20 and reissue in part. Please
revise your
disclosure on page 13 to state that your discussion of tax
consequences related to the
Business Combination constitutes the opinion of counsel.
Risk Factors
Risks Related to Scilex's Intellectual Property, page 62
3. Your disclosure on page 251 indicates that Scilex's litigation
expenses increased by $6.6
million during the year ended December 31, 2021 and that such increase
was related to
ZTlido patent infringement in which Scilex was the plaintiff. Please
revise your disclosure
in this section of the proxy statement/prospectus to discuss this
increase in litigation
expenses related to patent infringement. To the extent material,
please also revise here and
within Business to disclose the current status of these legal
proceedings.
Activities taken by Vickers's affiliates to purchase, directly or indirectly,
Vickers Ordinary
Shares..., page 104
4. We note the statement that your affiliates may purchase shares and/or
warrants with the
purpose of voting them in favor of the Business Combination and that
such purchases may
be made at a premium purchase price. We further note your response to
prior comment 40
indicating that you may enter into agreements with certain
shareholders in which such
shareholders agree not to redeem. Please explain how such purchases
and activities would
comply with the requirements of Rule 14e-5 under the Exchange Act.
Consider the
guidance provided by Tender Offer Rules and Schedules Compliance and
Disclosure
Interpretation Question 166.01 in your response.
Proposal 1 - The Business Combination Proposal
Background of the Business Combination, page 112
5. We note your response to prior comment 16 and reissue in part. Please
revise your
discussion of the negotiation with Company X to specify which terms
Vickers and
Company X were unable to agree upon.
6. We note your response to prior 17 and reissue in part. Please quantify
the initial valuation
discussed with Scilex prior to your November 18, 2021 meeting,
describe how Vickers
arrived at this valuation and describe subsequent valuation
adjustments leading to the final
valuation as well as the reasons driving any such adjustments. Please
also disclose the
valuation proposed by Scilex in June/July 2021. Finally, please
disclose Sorrento's
valuation of Scilex in January 2021 and disclose the reasons why
Vickers did not consider
this valuation in its evaluation of the transaction.
Jeffrey Chi
FirstName LastNameJeffrey Chi
Vickers Vantage Corp. I
Comapany
July NameVickers Vantage Corp. I
11, 2022
July 11,
Page 3 2022 Page 3
FirstName LastName
Certain Scilex Projected Financial Information, page 120
7. We note your response to prior comment 18 and reissue. Disclaimers in
this section
continue to caution readers not to rely on the projections in making
decisions regarding
the transaction. Please revise to remove the language indicating
investors should not rely
on your disclosure.
Proposal 1 - The Business Combination Proposal
Certain Scilex Projected Financial Information, page 120
8. We note the expanded disclosures you provided in response to prior
comment 19. We
remind you that the level of detail provided for each of the two
projections presented must
be sufficient enough for an investor to understand the reasonableness
of the assumptions
underlying the projections as well as the inherent limitations on the
reliability of
projections in order to make informed investment decisions. Please
further expand your
disclosures to address each of the following areas.
Clarify if the date Redwood was commissioned to prepare the
projections is also the
date the projections were prepared as of and received by Scilex
management.
Explain why SP-104 has been included in both projections that were
prepared in
2021, given that Sorrento entered into the Aardvark Asset
Purchase Agreement for
SP-104 in April 2021 and was not acquired by Scilex from Sorrento
until May 12,
2022.
Clarify how you concluded that a projection of revenues and the
related expenses to
arrive at net income for 10 to 11 years is customary in the
pharmaceutical industry for
pipeline projects and what facts and circumstances specific to
Scilex and the
corresponding product candidates made it reasonable to project
this far out.
Explain how the Vickers Board considered and relied upon the
projected financial
information, particularly in light of the length of the
projections and that the majority
of the forecasted revenue is for unapproved product candidates.
Please provide
disclosure to address the fact your commercialized product did
not meet revenue
expectations under the Scilex Pharma Notes and explain how this
impacts
consideration of the projections.
For the Scilex Management Projections, explain your basis for
assuming 100%
regulatory approval for all of your product candidates and your
basis for the assumed
timeframe of regulatory approval and commercial launch. For
SP-102, you note that
commercialization is assumed to launch in early 2024; explain why
you have
included revenue prior to this launch. For each product
candidate, identify the market
and geographical regions for the revenue projections and the
specific market growth
rates and projected market rate penetrations for each product
candidate. Explain how
the market rate growth and market rate penetrations were
determined. Explain the
basis for assuming growth rates over such an extended period of
time.
For the Redwood Projections, discuss 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
Jeffrey Chi
FirstName LastNameJeffrey Chi
Vickers Vantage Corp. I
Comapany
July NameVickers Vantage Corp. I
11, 2022
July 11,
Page 4 2022 Page 4
FirstName LastName
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. 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 a more
comprehensive
discussion of the material assumptions used to determine
projected cost of sales,
operating expenses and other expenses. Address the
appropriateness of referring to
the last line item net income, as it does not appear to consider
financing, foreign
currency or taxes based on Scilex s facts and circumstances as
of the preparation
date.
Business of Scilex
Material Agreements, page 223
9. We note your disclosure that Scilex s net profits for ZTlido and
SP-103 have not exceeded
five percent of net sales. Please revise your discussion of the
Product Development
Agreement to state, if true, that Itochu and Oishi currently have, or
previously had, the
right to terminate this agreement. To the extent that Itochu and Oishi
currently have the
right to terminate the Product Development Agreement, please revise
the Summary of the
Proxy Statement to disclose this information.
10. We note your response to prior comment 23. However, we do not note any
revised
disclosure in the corresponding section describing the material terms
of Scilex's
acquisition of Semnur. Please revise or advise.
11. Please revise your discussion of the Romeg License and
Commercialization Agreement to
provide a more defined royalty range that does not exceed ten
percentage points.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Scilex, page 245
12. Please expand your disclosures to specifically note that no research
and development
expenses have been recognized in your historical financial statements
for SP-104. Also
consider disclosing the amount of research and development expenses
incurred by
Sorrento for SP-104.
Unaudited Pro Forma Condensed Combined Financial Information
Note 1 - Description of the Business Combination, page 273
13. We note the expanded disclosures you provided in response to prior
comment 39,
including your statement that the Specified Indebtedness Amount is
$112 million as of the
date of the proxy statement/prospectus and is the amount used to
calculate the
138,758,675 shares to be transferred to Scilex common stockholders and
optionholders.
Jeffrey Chi
Vickers Vantage Corp. I
July 11, 2022
Page 5
However, your disclosures indicate that the amount is $69.4 million.
Please revise your
disclosures to address this difference here and elsewhere this
information is disclosed in
the Form S-4 (e.g., page 38 in the Risk Factors section) and revise the
number of shares to
be transferred at consummation of this transaction, as appropriate.
14. We note that with Amendment No. 4 to the Indenture of the Scilex Pharma
Notes, Scilex
has the option to repurchase $41.4 million of the outstanding balance
with the remaining
$28 million forgiven and discharged on or before September 30, 2022.
Please disclose
Scilex s intent with regards to this option and provide disclosures for
the impact to the
number of shares issued to Scilex s common stockholders and
optionholders. Please also
include this information as a footnote to the table reflecting the Total
Shares at the Closing
on page 268 and throughout the Form S-4 where this information is
provided.
Index to Financial Statements
Consolidated Statements of Stockholders Deficit, page F-78
15. We note your disclosure on page F-75 that Sorrento provided a cash
contribution of $23
million on March 30, 2022. However, we did not note such contribution
included in this
statement or as a financing cash flow in your Consolidated Statements of
Cash Flows.
Please address this inconsistency.
General
16. We note that Maxim Group LLC was the underwriter for the initial public
offering of the
SPAC. We also note press reports that certain financial advisors are
ending
their involvement in SPAC business combination transactions. Please tell
us, with a view
to disclosure, whether you have received notice from this institution
about ceasing
involvement in your transaction and how that may impact your deal or any
deferred compensation owed to such company. In addition, identify the
financial advisors
who served Scilex, or any other financial advisor that served Vickers, in
connection with
the proposed transaction, and provide similar disclosure as applicable.
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
July 11, 2022 Page 5
cc: Joan Guilfoyle, Esq.
FirstName LastName