Form 8-K Summary
Registrant: Vickers Vantage Corp. I, in connection with its proposed business combination with Scilex Holding Company. Report date: September 12, 2022; filed September 13, 2022. This filing reports material transaction agreements and amendments rather than operating or quarterly financial results.
Business Context and Transaction
Vickers, a Cayman Islands special purpose acquisition company, previously agreed to merge with Scilex, a majority-owned subsidiary of Sorrento Therapeutics. Scilex would survive as a wholly owned subsidiary of Vickers, and Vickers was expected to change its name to Scilex Holding Company after closing.
The transaction contemplated Vickers’ domestication as a Delaware corporation, conversion of Scilex equity into securities of the combined company, and continued or renewed listing of the relevant securities on Nasdaq.
Material Amendments and Governance Terms
- Amendment No. 1 to the merger agreement was entered into on September 12, 2022.
- The outside closing date was extended to November 11, 2022.
- At closing, Vickers units would automatically separate into common stock and warrants, with fractional warrants rounded down.
- Following closing, the board was expected to consist of seven directors: five designated by Scilex, including one director meeting applicable independence requirements, and two additional independent directors designated by Scilex and agreed upon by Vickers.
- Each outstanding share of Scilex Series A Preferred Stock would convert into one share of the new parent’s Series A Preferred Stock and one-tenth of one share of common stock.
- Vickers agreed to increase authorized preferred stock from 10 million to 45 million shares and total authorized shares from 750 million to 785 million.
- The parties agreed to pursue Nasdaq listing of the post-transaction common stock and warrants. Scilex’s closing condition included continued Nasdaq compliance and approval of the post-closing listing application.
Stockholder and Sponsor Support Arrangements
Vickers entered into a Stockholder Agreement with Sorrento. While Sorrento beneficially owns shares of the new parent’s Series A Preferred Stock, Sorrento will have the right to designate directors and appoint replacement directors. The agreement also gives Sorrento consent rights over specified actions, including amendments to the preferred stock designation, changes in board size, certain indebtedness, and dividends on common stock.
An amendment to the Sponsor Support Agreement provides that, if holders of more than 75% of the relevant Vickers ordinary shares exercise redemption rights in connection with the shareholder vote, participating Vickers shareholders would forfeit 40% of their Parent Warrants immediately before closing, without consideration.
Financial Metrics, Liquidity, and Outlook
The filing does not provide revenue, profit, cash flow, margin, debt, cash balance, or other operating financial metrics for Scilex or Vickers. It also provides no formal financial guidance.
Management identified uncertainty regarding the cash remaining in Vickers’ trust account and the cash available to Scilex at closing, particularly if substantial shareholder redemptions occur. The merger agreement requires no minimum trust-account funding level for closing, and the filing states that available transaction proceeds may be insufficient to support Scilex’s short-term operations and research and development activities.
Risks and Contingencies
- The merger may be amended or terminated, or may not close if shareholder approvals or other closing conditions are not satisfied.
- Redemptions could materially reduce cash available at closing.
- The combined company may be unable to obtain or maintain Nasdaq listing.
- Transaction costs and the amount of cash available to fund operations are uncertain.
- Scilex faces risks relating to competition, growth, profitability, customer retention, key personnel, regulation, legal proceedings, COVID-19 effects, and the duration of available funding.
- Forward-looking statements regarding timing, synergies, revenue opportunities, integration, and future performance are not assurances of results.
Investor Verification Items
- Verify whether the merger closed by the November 11, 2022 outside date and review any subsequent amendments or termination filings.
- Review redemption levels and the amount of cash ultimately available from the Vickers trust account.
- Confirm the final exchange ratios, preferred-stock terms, warrant treatment, and post-closing capitalization.
- Review Sorrento’s director designation and consent rights under the Stockholder Agreement.
- Confirm Nasdaq listing approval and compliance for the post-transaction securities.
- Review the Form S-4, proxy statement/prospectus, financial statements, and risk factors for Scilex’s operating results, liabilities, funding needs, and transaction costs.