Vickers Vantage Corp. Dismisses Ernst & Young LLP as Independent Auditor Due to Review Timing Concerns

In a recent 8-K filing submitted to the United States Securities and Exchange Commission (SEC), Vickers Vantage Corp. (OTCMKTS:VCKAU) announced the dismissal of Ernst & Young LLP (EY) as its independent registered public accounting firm, effective immediately. The decision came on November 19, 2024, as EY was unable to provide assurance regarding the completion of its review of the Company’s financial statements for the quarter ended September 30, 2024.

The background leading to this action involved EY requesting an investigation by the Audit Committee of specific contracts entered into by Vickers Vantage Corp. in June and September 2024, along with the corresponding accounting treatment. These contracts, including the Commitment Side Letter, a distribution agreement with Endeavor Distribution LLC, and the Satisfaction Agreement, raised concerns impacting EY’s ability to rely on management’s representations during the review of the Company’s financials.

The Audit Committee, in response to EY’s request, initiated an investigation with independent counsel to evaluate the contracts and related accounting matters. As of the latest update, no conclusive findings have been reported yet, and the investigation is expected to extend for several weeks. Even after this analysis by independent counsel concludes, EY indicated uncertainty around the timeline for completing its review of the financial statements.

The inability to file the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, is expected to trigger consequences for Vickers Vantage Corp. Among other impacts, the Company anticipates receiving a notice from the Nasdaq Stock Market LLC, warning of non-compliance with listing requirements. Additionally, default scenarios under existing senior secured promissory notes may lead to accelerated payment obligations and restricted financing options until the filing is resolved.

The Company outlined the potential risks associated with the situation, emphasizing the material adverse effects on its reputation, securities pricing, business operations, financial condition, and results of operations. No definitive outcome has been projected, highlighting the uncertainty surrounding these matters.

Vickers Vantage Corp. provided EY with a detailed disclosure of events and requested feedback to be communicated to the SEC. However, as of the 8-K filing date, EY had not responded with an agreement or disagreement regarding the statements made in the disclosure.

The Company emphasized that the reports from EY did not contain adverse opinions or disclaimers related to financial statements for the fiscal years ended December 31, 2023, and 2022. While avoiding disagreements with EY in recent years, Vickers Vantage Corp. highlighted a material weakness in internal control over financial reporting, disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022.

The filing included prudent forward-looking statements, indicating the Company’s concerns and expectations pertaining to Nasdaq listing compliance, engagement of a new audit firm, and debt repayment plans. Vickers Vantage Corp. urged investors to consider the risks and uncertainties outlined in their filings with the SEC, acknowledging the potential differences between forward-looking projections and actual results.

The Company remains committed to updating stakeholders as necessary, complying with regulatory obligations, and addressing the evolving situation proactively to safeguard its financial interests and market standing.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Vickers Vantage Corp. I’s 8K filing here.

Vickers Vantage Corp. I Company Profile

As of November 10, 2022, Vickers Vantage Corp. I was acquired by Scilex Holding Company, in a reverse merger transaction. Vickers Vantage Corp. I does not have significant operations. It intends to effect a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization, or similar business combination with one or more businesses or entities.