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United States securities and exchange commission logo
December 13, 2022
Jaisim Shah
Chief Executive Officer
Scilex Holding Company
960 San Antonio Road
Palo Alto, CA 94303
Re: Scilex Holding
Company
Registration
Statement on Form S-1
Filed November 30,
2022
File No. 333-268603
Dear Jaisim Shah:
We have limited our review of your registration statement to
those issues we have
addressed in our 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-1 filed November 30, 2022
Cover Page
1. For each of the
securities being registered for resale, disclose the price that the selling
securityholders paid
for such securities.
2. Disclose the exercise
price of the warrants compared to the market price of the underlying
security. If the
warrants are out the money, please disclose the likelihood that warrant
holders will not
exercise their warrants. Provide similar disclosure in the Prospectus
Summary, Risk Factors,
MD&A and Use of Proceeds sections and disclose that cash
proceeds associated
with the exercises of the warrants are dependent on the stock price.
As applicable, describe
the impact on your liquidity and update the discussion on the
ability of your company
to fund your operations on a prospective basis with your current
cash on hand.
Jaisim Shah
FirstName LastNameJaisim
Scilex Holding Company Shah
Comapany13,
December NameScilex
2022 Holding Company
December
Page 2 13, 2022 Page 2
FirstName LastName
3. We note the significant number of redemptions of common stock in
connection with your
business combination and that the shares being registered for resale
will constitute a
considerable percentage of your public float. We also note that some
of the shares being
registered for resale were purchased by the selling securityholders
for prices considerably
below the current market price of your common stock. Highlight the
significant negative
impact sales of shares on this registration statement could have on
the public trading price
of your common stock.
Risk Factors, page 9
4. Include an additional risk factor highlighting the negative pressure
potential sales of
shares pursuant to this registration statement could have on the
public trading price of
your common stock. To illustrate this risk, disclose the purchase
price of the securities
being registered for resale and the percentage that these shares
currently represent of the
total number of shares outstanding. Also disclose that even though the
current trading
price is significantly below the SPAC IPO price, the private investors
have an incentive to
sell because they will still profit on sales due to the lower price
they paid for their shares
as compared to the public investors.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
102
5. We note that your projected revenues for 2022 were $73.9 million, as
set forth in the
unaudited prospective financial information management prepared and
provided to the
Board, the company s financial advisors and the SPAC in connection
with the evaluation
of the Business Combination. We also note that your actual revenues
for the nine months
ended September 30, 2022 were approximately $26.1 million. It appears
that you will
miss your 2022 revenue projection. Please update your disclosure in
Liquidity and
Capital Resources, and elsewhere, to provide updated information about
the company s
financial position and further risks to your business operations and
liquidity in light of
these circumstances.
Overview, page 102
6. In light of the significant number of redemptions and the unlikelihood
that the company
will receive significant proceeds from exercises of the warrants
because of the disparity
between the exercise price of the warrants and the current trading
price of your common
stock, expand your discussion of capital resources to address any
changes in the
company s liquidity position since the business combination. If the
company is likely to
have to seek additional capital, discuss the effect of this offering
on the company s ability
to raise additional capital.
7. Please expand your discussion here to reflect the fact that this
offering involves the
potential sale of a substantial portion of shares for resale and
discuss how such sales could
impact the market price of the company s common stock. Your
discussion should
Jaisim Shah
Scilex Holding Company
December 13, 2022
Page 3
highlight the fact that Sorrento Therapeutics, a beneficial owner of over
90% of your
outstanding shares, will be able to sell all of its shares for so long as
the registration
statement of which this prospectus forms a part is available for use.
General
8. Revise your prospectus to disclose the price that each selling
securityholder paid for the
securities being registered for resale. Highlight any differences in the
current trading
price, the prices that the Sponsors or other selling securityholders
acquired their shares
and warrants, and the price that the public securityholders acquired
their shares and
warrants. Disclose that while the Sponsors may experience a positive rate
of return based
on the current trading price, the public securityholders may not
experience a similar rate
of return on the securities they purchased due to differences in the
purchase prices and the
current trading price. Please also disclose the potential profit the
selling securityholders
will earn based on the current trading price. Lastly, please include
appropriate risk factor
disclosure.
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.
Please contact Tyler Howes at 202-551-3370 or Alan Campbell at
202-551-4224 with
any questions.
Sincerely,
FirstName LastNameJaisim Shah
Division of
Corporation Finance
Comapany NameScilex Holding Company
Office of Life
Sciences
December 13, 2022 Page 3
cc: Elizabeth Razzano, Esq.
FirstName LastName