United States securities and exchange commission logo
March 3, 2021
John Brda
Chief Executive Officer and Director
Torchlight Energy Resources, Inc.
5700 W. Plano Parkway, Suite 3600
Plano, TX 75093
Re: Torchlight Energy
Resources, Inc.
Preliminary Proxy
Statement on Schedule 14A
Filed February 4,
2021
File No. 001-36247
Dear Mr. Brda:
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.
Preliminary Proxy Statement on Schedule 14A filed February 4, 2021
Risk Factors
Risks Related to the Arrangement, page 45
1. We note that the
Exchange Ratio pursuant to which Meta shares will be exchanged for
Torchlight shares under
the Arrangement Agreement is not fixed and will be determined
based on a formula
which includes adjustments that could impact the 25% that holders of
Torchlight might expect
to receive based on the related disclosure. Please include a risk
factor detailing any
material risks related to uncertainty regarding the exchange ratio.
Depending on the
potential decrease to the percentage below 25%, it may be appropriate
to provide a
corresponding explanation with quantification where you describe the ratio.
Background of the Arrangement, page 96
2. Please revise this
section to provide greater detail as to the key issues that were subject to
substantial
negotiation. For example, please expand your disclosure to discuss how the
John Brda
Torchlight Energy Resources, Inc.
March 3, 2021
Page 2
Exchange Ratio was determined and to address why the Torchlight board
agreed to an
asset sale in this situation when the board previously rejected that
possibility in
negotiations with other interested parties.
The Arrangement
Fairness Opinion, page 101
3. Provide additional details regarding which "comparable transactions" Roth
used in the
analysis summarized at pages 104 to 105. Identify the particular
transactions it selected
from the larger pool of 67 to derive the results shown for the analysis,
including the dates,
the transaction values, and the parties involved.
Meta Standalone Projections, page 110
4. Please disclose the material assumptions underlying the projections
presented in this
section.
Restated consolidated statements of loss and comprehensive loss, page L-6
5. Depreciation and amortization appears to be excluded from cost of goods
sold.
Depreciation and amortization should not be presented in the income
statement in a
manner which results in reporting gross profit before depreciation.
Please revise to
include applicable depreciation and amortization in cost of goods sold.
Refer to SAB
Topic 11B.
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 Robert Babula, Staff Accountant, at (202) 551-3339 or
Gus Rodriguez,
Accounting Branch Chief, at (202) 551-3752 if you have questions regarding
comments on the
financial statements and related matters. Please contact Anuja A. Majmudar,
Attorney-Adviser,
at (202) 551-3844 or, in her absence, Tim Levenberg, Special Counsel, at (202)
551-3707 with
any other questions.
Sincerely,
FirstName LastNameJohn Brda
Division of
Corporation Finance
Comapany NameTorchlight Energy Resources, Inc.
Office of Energy &
Transportation
March 3, 2021 Page 2
cc: Michael A. Hedge
FirstName LastName