United States securities and exchange commission logo
November 4, 2021
Byron Roth
Co-Chief Executive Officer
Roth CH Acquisition III Co
888 San Clemente Drive, Suite 400
Newport Beach, CA 92660
Re: Roth CH Acquisition
III Co
Amended Preliminary
Proxy Statement on Schedule 14A
Filed October 20,
2021
File No. 001-40147
Dear Mr. Roth:
We have reviewed your amended 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. Unless we note otherwise, our references to prior comments are
to comments in our
September 7, 2021 letter.
Preliminary Proxy Statement on Schedule 14A filed on October 20, 2021
Letter to Stockholders, page i
1. We reissue prior
comment 2. When discussing the business combination, please quantify
the "portion of the
merger consideration" allocated to each step of the business
combination and the
capital contribution from ROCR.
2. We partially reissue
comment 3. Please clarify and reconcile the 22.2% ownership of
initial shareholders as
disclosed in the letters to shareholders with the amounts in the
beneficial ownership
table on page 224.
Byron Roth
FirstName LastNameByron
Roth CH Acquisition III Co Roth
Comapany 4,
November NameRoth
2021 CH Acquisition III Co
November
Page 2 4, 2021 Page 2
FirstName LastName
Summary of the Proxy Statement, page 18
3. We note the revisions made in response to comment 6. We note that the
"equity value"
includes "the value of any Equity Interests of the Company issued as
consideration for any
acquisitions by the Company prior to the Closing." Please disclose, to
the extent known,
the current estimated value of this component of the equity value.
Please also revise the
disclosure to clearly disclose the total consideration to be paid and
how the consideration
will be allocated to the holders of QualTek, as previously requested.
Clearly disclose the
amount of consideration that will be paid in cash and the
consideration to be paid in
equity, clearly disclosing the allocation of each to the holders of
Qualtek. Please clarify
the "distribution waterfalls" referenced on page 20.
4. We partially reissue comment 10. Please update the out of pocket
expenses owed to the
Sponsor or ROCR executive officers and directors as of the most recent
practicable date.
Please also clearly disclose the value of the shares held by the
Sponsor, ROCR officers
and directors, and their affiliates based on the market price as of a
recent practicable date.
Please also disclose any compensation arrangements that will be
provided to Mr. Chawla
as a director post-business combination, to the extent known.
5. We partially reissue comment 13. Please highlight the material risks
to public warrant
holders, including those arising from differences between private and
public warrants.
6. We partially reissue comment 15. Please revise to disclose the
potential impact of the pre-
PIPE securities and the PIPE securities, on non-redeeming
shareholders.
Risks Related to ROCR and the Business Combination, page 52
7. Please revise the risk factor on page 59 relating to the founder
shares and/or private units
may receive a positive return when the public shareholders receive a
negative return on
their investment. Please revise to clearly disclose the stock price at
which the founders
shares and/or private units will achieve a positive return and
contrast that to the purchase
price of public shareholders.
8. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
showing a range of redemption scenarios, including minimum, maximum
and interim
redemption levels. In addition, the dilution information provided on
page 61should be
revised to provide dilution information at each of the redemption
levels detailed in your
sensitivity analysis for redemption scenarios, including any needed
assumptions.
9. We reissue comment 18. It appears that 3.5% marketing fee payable to
Roth and Craig-
Hallum remains constant and is not adjusted based on redemptions.
Revise your risk
factor disclosure to disclose the effective fee on a percentage basis
for shares at each
redemption level presented in your sensitivity analysis related to
dilution.
Byron Roth
FirstName LastNameByron
Roth CH Acquisition III Co Roth
Comapany 4,
November NameRoth
2021 CH Acquisition III Co
November
Page 3 4, 2021 Page 3
FirstName LastName
Unaudited Historical Comparative and Pro Forma Combined Per Share Data Of ROCR
And
Qualtek, page 94
10. We note your disclosure that you do not intend on providing historical
book value per
share, weighted average shares outstanding for basic and diluted
purposes and net loss per
share basic and diluted for Qualtek due to your disclosure that
QualTek s historical equity
structure makes such measures not valuable metrics. In order to better
understand the
Company's position, please further describe why such measures would
not be considered
valuable metrics in light of the fact that your financial statements
already disclose the
weighted average number of units and net loss per share on pages F-38
and F-62.
Background of the Business Combination, page 95
11. We reissue comment 21. Please revise the disclosure in this section to
provide a
description of how Qualtek was identified and by whom, and how the
negotiations were
started and by whom.
12. We note that the initial communications with Qualtek were with ROCC,
an affiliated
SPAC. Please clearly disclose the executive officers and directors of
ROCC who are also
officers and directors of ROCR. Please also clearly disclose any
communications between
ROCC, its officers or directors, or other representatives of ROCC, and
Qualtek relating to
the consideration of completing a business combination through ROCR.
Please clearly
disclose the initial communications between Qualtek and ROCR,
including the date and
who initiated the communications.
13. Please clearly identify who at ROCR connected with the investment
banking group at
Citigroup on March 4 and clarify the nature of the communications and
whether Mr.
Weinberg, and/or Qualtek were involved with this communication. Please
also clearly
disclose how the members of ROCR management were previously aware of
Qualtek.
14. We reissue comment 23. Please disclose any discussions about the need
to obtain
additional financing for the combined company through a PIPE
transaction(including the
pre PIPE), and the negotiation/marketing processes, such as who
selected the potential
PIPE investors, what relationships did the PIPE investors have to
ROCR, the sponsor,
Qualtek and its affiliates, and the placement agent, and how were the
terms of the PIPE
transactions determined. In addition, please disclose whether there
were any valuations or
other material information about the ROCR, Qualtek, or the de-SPAC
transaction
provided to potential PIPE investors that have not been disclosed
publicly.
The Board of Directors' Reasons for the Approval of the Business Combination,
page 101
15. We reissue comment 27. Please clarify whether and how the Board took
into account the
consideration being paid in this transaction in recommending the
transaction, and if not,
why not.
Byron Roth
FirstName LastNameByron
Roth CH Acquisition III Co Roth
Comapany 4,
November NameRoth
2021 CH Acquisition III Co
November
Page 4 4, 2021 Page 4
FirstName LastName
Consideration to be Received in the Business Combination, page 110
16. Please calculate and disclose clearly the consideration to be received
by the equityholders
of QualTek in the business combination, as requested in comment 28.
For instance,
clarify the reference in calculating the blocker owner consideration
to "the number of
shares of Class A Common Stock equal to the merger consideration."
Management of ROCR, page 165
17. Please provide clear disclosure of the current stock price of prior
affiliated SPACs.
Critical Accounting Policies and Estimates
Impairment of Goodwill and Long-lived Assets, page 206
18. We note your response to comment 36. Please further expand your
disclosures to:
Quantify and discuss the material assumptions underlying your
estimate of the fair
value of the reporting units for which you recorded an impairment;
and
Quantify and discuss the potential impact of changes in those
assumptions on the
remaining goodwill in those reporting units.
Note 1. Nature of Business and Summary of Significant Accounting Policies
Revenue Recognition, page F-43
19. We note your response to comment 41. Please further clarify how you
recognize revenue
for each identified performance obligation. Given your disclosure that
for the Company s
projects recognized under the input method, the Company typically
identifies two
promised goods and services in the contract: (a) delivery of materials
and (b) installation
and construction services, it is unclear whether the Company has
concluded that revenue
for both identified performance obligations should be recognized over
time using the input
method. In that regard, please tell us how you considered the guidance
under 606-10-25-
23 through ASC 606-10-25-30 for each of your identified performance
obligations. Please
expand your disclosures accordingly consistent with the guidance in
ASC 606-10-50-17
through ASC 606-10-50-19.
20. Notwithstanding our comment above, please further expand your
disclosures to highlight
the number of performance obligations you identified in your revenue
streams that do not
use an input measure. In that regard, and based on your disclosures on
page F-44, please
clarify how many performance obligations you identified for the
revenue recognized for
your engineering, aerial and underground construction contracts that
you use an output
measure to recognize revenue and your fulfillment, maintenance,
compliance, and
recovery services contracts that you bill on a contractually agreed
price per unit on a work
order basis. Please tell us how you considered the guidance under
606-10-25-23 through
ASC 606-10-25-30 for each of your identified performance obligations
for those contracts
and expand your disclosures consistent with the guidance in ASC
606-10-50-17 through
ASC 606-10-50-19.
Byron Roth
Roth CH Acquisition III Co
November 4, 2021
Page 5
Note 13. Subsequent Events, page F-76
21. We note your disclosures that on August 6, 2021, August 30, 2021 and
October 15, 2021
you acquired Broken Arrow Communications, Inc., Concurrent Group LLC and
Urban
Cable Technology LLC, respectively. We further note on page 107 your
disclosure
that QualTek is also currently in negotiations with a number of other
acquisition targets.
Please clarify if there are currently any probable acquisitions, and tell
us your
consideration of any financial statement requirements for these completed
or
probable acquisitions, if any.
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 Ameen Hamady at 202-551-3891 or Isaac Esquivel at
202-551-3395 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Ruairi Regan at 202-551-3269 or Pam Howell at 202-551-3357 with any
other questions.
Sincerely,
FirstName LastNameByron Roth
Division of
Corporation Finance
Comapany NameRoth CH Acquisition III Co
Office of Real
Estate & Construction
November 4, 2021 Page 5
cc: Janeane R. Ferrari, Esq.
FirstName LastName