United States securities and exchange commission logo
October 22, 2020
Ophir Sternberg
Chief Executive Officer
Opes Acquisition Corp.
4218 NE 2nd Avenue
Miami, FL 33137
Re: Opes Acquisition
Corp.
Preliminary Proxy
Statement on Schedule 14A
Filed September 25,
2020
File No. 001-38417
Dear Mr. Sternberg:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
PREM14A Filed on 9/25/2020
Summary
Consideration to the Members, page 10
1. The aggregate value of
the consideration to be paid by OPES in the Business Combination
(subject to reduction
for indemnification claims and potential changes due to a working
capital adjustment) of
approximately $100 million disclosed here appears to be
inconsistent with the
disclosure on page 117 which states the aggregate value of the
consideration is $194
million. Please clarify or revise.
Risk Factors, page 17
2. Please provide risk
factor disclosure concerning the legal and operational risk associated
with your franchising
operations.
Ophir Sternberg
FirstName LastNameOphir Sternberg
Opes Acquisition Corp.
Comapany
October 22,NameOpes
2020 Acquisition Corp.
October
Page 2 22, 2020 Page 2
FirstName LastName
Background of the Business Combination, page 47
3. According to your disclosure in the third paragraph from the top of
page 48,
you conducted due diligence and/or engaged in detailed discussions
with approximately
eight targets, but due to discrepancies in commercial terms and
valuation expectations you
discontinued discussions with seven targets. Please enhance your
disclosure to further
describe the nature of these companies, including their size and the
industries in which
they operate, the nature of your discussions with these companies, the
nature of the
discrepancies in commercial terms and valuation expectations, and the
reasons that
discussions were terminated.
4. Please expand the disclosure in this section to include a more
detailed description of the
negotiations surrounding the material terms of the Membership Interest
Purchase
Agreement and the other agreements related to the Business
Combination. For example,
please specify which of the parties recommended the initial
consideration, explain how the
amount was determined, and describe how the consideration changed over
the course of
the negotiations until the parties arrived at the final consideration.
Please provide similar
disclosure with the form and mix of consideration and the adjustments
thereto. Please see
Item 14(b)(7) of Schedule 14A.
OPES S Board s Reasons for the Approval of the Business Combination, page
51
5. We note that your board "consulted with management and OPES s legal
counsel as well
as financial and other advisors," that you considered "research on the
public trading values
of comparable peer companies as well as private transaction
precedents," and that due
diligence was "conducted in conjunction with external advisors,
including national
accounting, legal, insurance, environmental, and regulatory firms,
among others." Please
provide the disclosure required by Item 14(a)(6) of Schedule 14A and
Item 1015 of
Regulation S-K, or advise. In addition, in this section please
describe any uncertainties,
risks and other potentially negative factors concerning the
transaction that were
considered by the board, as well as why these factors did not dissuade
the board from
approving the transaction.
Business of BurgerFi
Overview, page 76
6. In appropriate places in your filing, please break out your number of
franchise stores and
company stores, discuss the contribution of each store type to your
revenues and expenses,
discuss the material terms of a typical franchise agreement, clarify
any differences in your
site selection and construction models depending on the store type to
be built, and
describe any material franchise regulations governing your operations.
Also in an
appropriate place in your filing, please describe the effect of
existing and probable
governmental regulations (of any kind) on your business.
Ophir Sternberg
FirstName LastNameOphir Sternberg
Opes Acquisition Corp.
Comapany
October 22,NameOpes
2020 Acquisition Corp.
October
Page 3 22, 2020 Page 3
FirstName LastName
Growth Strategies, page 88
7. We note your statement "We are continuing on a strong growth
trajectory with another 15
restaurants planned to open in 2020, along with several delivery-only
neighborhood
kitchens in partnership with REEF Technology. " Please revise your
disclosure to provide
a status update of your progress on achieving these initiatives.
Related Party Transactions
BurgerFi Related Party Transactions, page 134
8. Please disclose the BurgerFi Member that is the related party.
BugerFi International, LLC and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations, page F-7
9. We note your store activity for the years ended December 31, 2019 and
2018 appears to
only include franchised stores. Please revise to separately disclosure
the store activity for
company owned restaurants for each applicable reporting period.
BurgerFi International, LLC and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Nature of Operations and Summary of Significant Accounting Policies
Variable Interest Entities, page F-9
10. We note your statement that "Additionally, the Company is a guarantor
for a lease for The
Burger Bunch, LLC, an unrelated party. " Please tell us the business
purpose of
guaranteeing this lease, if you are compensated for this arrangement
and what is your
maximum exposure to loss.
General
11. Please provide the disclosure required by Items 102 and 103 of
Regulation S-K. Refer to
Item 14(c) of Schedule 14A and Form S-4.
12. With respect to the current and proposed restated charters and bylaws
of the company:
Please revise the disclosure throughout the filing, including in
Use of Certain
Terms, Proposal 2, and Description of Opes's Securities, to
clarify whether it relates
to Opes's current charter or the restated charter of the
post-combination company.
Please also explain when the restated charter will become
effective.
We note references in your filing to restated bylaws. Please
describe the terms of the
bylaws, state whether their adoption requires shareholder
approval, and tell us what
consideration you have given to attaching to the filing the form
of bylaws that will be
in effect after the business combination.
Ophir Sternberg
Opes Acquisition Corp.
October 22, 2020
Page 4
We note that certain descriptions in your filing of the
restated charter of the post-
combination company are not consistent with the terms of the
restated charter
attached as Annex B (as examples only, refer to the descriptions
of the exclusive
forum provision and ability to call special meetings). Please
review and revise
Annex B and the proxy disclosure to ensure accuracy and
consistency.
The disclosure in Proposal 2 does not appear to describe
sufficiently all of the
differences between Opes's current charter and the restated
charter to be in effect after
the business combination. Please revise this section to fully
describe such
differences, so that stockholders have an accurate understanding
of what they are
being asked to approve.
Please note that we may have further comment upon review of
your revised
disclosure, including in connection with the exclusive forum
provision of the restated
charter.
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.
You may contact Aamira Chaudhry at 202-551-3389 or Angela Lumley at
202-551-3398
if you have questions regarding comments on the financial statements and
related
matters. Please contact Scott Anderegg at 202-551-3342 or Lilyanna Peyser at
202-551-3222
with any other questions.
FirstName LastNameOphir Sternberg Sincerely,
Comapany NameOpes Acquisition Corp.
Division of
Corporation Finance
October 22, 2020 Page 4 Office of Trade
& Services
FirstName LastName