SEC Form 8-K Summary
Registrant and reporting date: Vickers Vantage Corp. I, on March 18, 2022, reporting events occurring primarily on March 17, 2022. The filing concerns its proposed business combination with Scilex Holding Company, a majority-owned subsidiary of Sorrento Therapeutics, Inc.
Business Context and Transaction
Vickers Vantage entered into a merger agreement with Scilex and Vantage Merger Sub Inc. Vickers Vantage will first domesticate as a Delaware corporation, after which Merger Sub will merge with Scilex, with Scilex surviving as a wholly owned subsidiary. Following closing, Vickers Vantage is expected to change its name to Scilex Holding Company.
The transaction was expected to close by the third quarter of 2022, subject to shareholder approvals, effectiveness of a Form S-4 registration statement, antitrust clearances, Nasdaq listing approval, and other customary conditions.
Financial Terms and Liquidity
- Total merger consideration is based on an implied equity value of $1.5 billion less Scilex long-term debt, excluding intercompany debt owed to Sorrento, divided by $10.00 per share.
- Consideration will be paid in shares of the post-domestication Vickers Vantage common stock.
- Assuming no public-shareholder redemptions and no debt adjustment, existing Scilex stockholders were expected to own approximately 88% of the combined company at closing.
- The filing does not provide Scilex revenue, earnings, cash flow, operating margin, cash balance, or total debt amounts. It states that Scilex’s audited 2020 and 2021 financial statements were required to be delivered by March 31, 2022.
- After closing, Vickers Vantage was required to have at least $5,000,001 in net tangible assets.
- If the post-redemption trust-account balance was $25 million or less, 50% of the deferred underwriting commission would be paid from the trust account and the remaining 50% would be paid to Maxim Group LLC through a promissory note due on or before the first anniversary of the business combination.
Material Changes Versus Prior Period
The filing announces a material change in corporate strategy and structure: Vickers Vantage, a special purpose acquisition company, entered into a definitive agreement to combine with Scilex. No comparable-period financial results or operating changes are reported in this Form 8-K.
Sorrento agreed to support the transaction by voting its Scilex shares in favor of the merger. Certain Vickers Vantage shareholders separately agreed to support the transaction. The parties also agreed to amend the IPO underwriting agreement and contemplated an amended registration-rights agreement with Sorrento.
Outlook, Conditions, and Risks
- The transaction could be terminated by mutual consent, for uncured breaches, failure to close by the July 11, 2022 outside date subject to potential extension, legal prohibition, or failure to obtain required shareholder approvals.
- Vickers Vantage could terminate if Scilex’s audited 2020 and 2021 financial statements were not delivered by March 31, 2022 and remained undelivered.
- No minimum trust-account funding level was required for closing under the stated conditions. Redemptions could materially reduce cash available to Scilex.
- Key risks include failure to obtain approvals, failure to maintain Nasdaq listing, transaction costs, insufficient post-closing cash to fund operations and research and development, litigation, competition, employee retention, customer retention, regulatory changes, COVID-19 effects, and uncertainty regarding the duration of available funding.
- Management’s statements regarding expected timing, benefits, synergies, revenue opportunities, and future performance are forward-looking and are not assurances of results.
Important Facts for Investors to Verify
- Whether the Form S-4 became effective and whether Vickers Vantage and Scilex shareholders approved the transaction.
- The final amount of Scilex long-term debt deducted from the $1.5 billion transaction value.
- The amount remaining in Vickers Vantage’s trust account after shareholder redemptions and the resulting cash available at closing.
- Scilex’s audited 2020 and 2021 financial statements, including revenue, profitability, cash flow, liquidity, and debt.
- Whether the merger closed by the applicable outside date and whether the combined company maintained Nasdaq listing eligibility.
- The final ownership percentages, share issuance, deferred underwriting commission, and any promissory-note obligations.