United States securities and exchange commission logo
November 9, 2021
Edward Robinson
Chief Executive Officer
Bright Green Corp
401 East Las Olas Blvd.
Suite 1400
Ft. Lauderdale, FL 33301
Re: Bright Green Corp
Draft Registration
Statement on Form S-1
Submitted October
12, 2021
CIK No. 0001886799
Dear Mr. Robinson:
We have reviewed your draft registration statement 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 this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement submitted on October 12, 2021
Cover Page
1. On the cover page, you
have indicated that you have elected not to use the extended
transition period for
complying with any new or revised financial accounting standards
provided pursuant to
Section 7(a)(2)(B) of the Securities Act. In a risk factor on page 19,
however, you state that
you have elected not to opt out of such extended transition
period and, therefore,
will be able to adopt the same new or revised accounting standards
at the moment private
companies adopt these standards. Please correct these apparent
inconsistencies. If you
elect to opt out of these provisions, please indicate as such on the
cover page.
Edward Robinson
FirstName LastNameEdward Robinson
Bright Green Corp
Comapany 9,
November NameBright
2021 Green Corp
November
Page 2 9, 2021 Page 2
FirstName LastName
2. We note your disclosure on the cover page and throughout the
registration statement that
you intend for your common stock to list on The Nasdaq Capital Market.
We also note,
however, that you have discussed index rules throughout the
registration statement,
including those concerning how an opening price is determined and how
consultations
with financial advisors work, that are not consistent with Nasdaq's
rules for direct listings.
For example, Nasdaq rules do not reference a designated market maker
("DMM") as part
of its process for determining the offering price. Please ensure your
disclosure throughout
the registration statement, including on the Cover Page, in the Risk
Factors and in the Plan
of Distribution section, as appropriate, clearly explains Nasdaq's
current rules with respect
to direct listings. Please also revise your disclosure to include the
word traditional in
front of book building in your description of this process
throughout the registration
statement.
3. Please update the cover page of your registration statement to include
a highlighted cross-
reference to the risk factors section. Refer to Item 501(b)(5) of
Regulation S-K.
Prospectus Summary, page 1
4. We note your disclosure in the Business section on page 32 that you
may not commence
cannabis growing operation until both the State of New Mexico and the
federal
government or its authorized agencies, in particular the DEA, have
signed off and fully
authorized that you are in full compliance of all applicable rules.
Please revise your
disclosure in the Prospectus Summary to include a similar statement.
5. We note your disclosure in a risk factor on page 10 that if the
federal government were to
legalize cannabis, it is possible that cannabis could become subject
to FDA regulations,
which could prevent you from operating. Please revise your disclosure
in the prospectus
summary to state that cannabis may be subject to FDA regulations, that
there is no
guarantee that the FDA will find your products safe and effective or
grant you required
approvals, and that this may inhibit your business prospects even in
the case that the
federal government were to legalize cannabis.
Planned Business Lines, page 2
6. We note your disclosure throughout this section that you plan to sell
your products
"[f]ollowing final approval from the DEA" or "once legal under
applicable law" in the
case of your cannabinoid-focused products, or "once cannabis
legalization occurs at the
federal level" with respect to selling directly to consumers. For each
of these statements
here as well as in Business section, please revise your disclosure to
clarify that there is no
guarantee that you will receive final approval from the DEA, that
cannabinoid-focused
products will become legal or that cannabis will ever be legalized at
the federal level.
Recent Developments, page 2
7. We note your description here of the MOA you have entered into with
the DEA. We also
note your disclosure in a risk factor on page 10 that "[you] cannot
guarantee that the DEA
Edward Robinson
FirstName LastNameEdward Robinson
Bright Green Corp
Comapany 9,
November NameBright
2021 Green Corp
November
Page 3 9, 2021 Page 3
FirstName LastName
will ultimately satisfy [its] obligations under the MOA" as well as
your statement that the
MOA is effective for an initial one-year term and subject to automatic
renewal for up to
four additional one-year terms, but that "[t]here is no guarantee that
the needed
authorizations will be renewed." Please revise your disclosure here to
state that there is no
guarantee that the DEA will satisfy its obligations and to clarify
that the MoA is only
effective for a one-year term, renewable for up to four additional
one-year terms, and that
there is no guarantee that you will obtain necessary authorization now
or in the future for
renewal purposes.
Our listing differs significantly from an underwritten initial public offering,
page 15
8. We note several statements here and elsewhere throughout the
registration statement that
there are no underwriters or that the Advisor is "not acting as
an underwriter." Please
note that whether the financial advisors would be considered statutory
underwriters
requires an analysis of the facts and circumstances; therefore, please
revise all of these
references that imply the absence of underwriters, or that your
financial advisors are not
considered underwriters, to clarify instead that the direct listing
does not involve a firm
commitment underwriting. Please also ensure that your revised Plan of
Distribution
describes each function to be performed by your financial advisors in
connection with the
offering.
Risk Factors
Risks Related to Ownership of Our Common Stock, page 15
9. Please revise to include a risk factor that discusses any impact of
the company s brand and
consumer recognition on the demand for your shares.
Taking advantage of the reduced disclosure requirements applicable to "emerging
growth
companies" may make our common stock less attractive, page 19
10. Since you are also a smaller reporting company, please add a separate
risk factor
disclosing that even if you no longer qualify as an emerging growth
company, you may
still be subject to reduced reporting requirements so long as you are
a smaller reporting company.
Capitalization, page 25
11. Please revise the total capitalization amount to include total debt in
addition to total
shareholders equity.
Managements Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources, page 28
12. We note your intention to build additional greenhouses on your
properties that will
include a research and development facility. Please provide a
discussion of your material
known or anticipated capital expenditures and other investments that
includes quantified
Edward Robinson
FirstName LastNameEdward Robinson
Bright Green Corp
Comapany 9,
November NameBright
2021 Green Corp
November
Page 4 9, 2021 Page 4
FirstName LastName
information for the costs of these capital projects and how you intend
to finance these
projects. Refer to Item 303(b)(1)(ii)(A) of Regulation S-K for
guidance.
Business
Background, page 29
13. We note your disclosure here that you own a 70 acre parcel of land
including a completed
greenhouse structure and a 40 acre parcel of land as well as your
statement that you are
constructing additional greenhouses on these properties, one of which
will be used as a
research and development facility. We also note your discussion on
page 31 disclosing
your phased approach to increasing production on your sites in Grants,
New
Mexico. Please expand your discussion here or elsewhere in the
Business section to
include a description of the general character of all of your
facilities, including your
greenhouses as well as any additional space, such as office space,
that you may currently
utilize or plan to utilize to operate your business. For example,
provide the size of each of
your facilities, each of their productive capacities, if applicable,
and comment on their
suitability for your current and planned operations. Refer to Item 102
of Regulation S-K.
14. Please explain what it means that your greenhouses will be "automated"
and that you will
provide a "safe" inventory of cannabis for researchers.
15. Please revise your disclosure in your Business section to describe
briefly any material
pending legal proceedings to which you are a party to or of which any
of your property is
the subject. Refer to Item 103 of Regulation S-K
Greenhouse Facility in Grants, New Mexico, page 31
16. We note your disclosure on page 4 that "[you] will partner with a
leading greenhouse
manufacturer to build a state-of-the-art facility." To the extent that
you have a material
contract in place with this manufacturer, please describe the material
terms of
this agreement. Please also file this agreement as an exhibit to the
registration statement,
or, in the alternative, please tell us why you believe that you are
not required to file the
agreement. Refer to Item 601(b)(10) of Regulation S-K.
17. We note your disclosure on page 4 that you will work with Nordic
Supreme as well as
your disclosure here that you will depend on the expertise in cannabis
development of
Aurora Larssen Projects to launch your production. Please expand your
disclosure to
address the sources and availability of raw materials as well as to
include the names of
your principal suppliers. Furthermore, to the extent that you have
agreements in place with
these named entities or other suppliers, please describe the material
terms of these
agreements in your disclosure and file these agreements as exhibits to
the registration
statement, or, in the alternative, please tell us why you believe that
you are not required to
file the agreements. Refer to Item 101(h)(4)(v) and Item 601(b)(10) of
Regulation S-K.
Edward Robinson
FirstName LastNameEdward Robinson
Bright Green Corp
Comapany 9,
November NameBright
2021 Green Corp
November
Page 5 9, 2021 Page 5
FirstName LastName
Intellectual Property, page 31
18. Please revise to disclose for each material patent and patent
application the expiration
dates and applicable material jurisdictions, including any foreign
jurisdiction. Please also
disclose whether you intend to file additional patent applications and
include, to the extent
known, the specific product(s) to which such patent applications would
relate, the type of
patent protection, the expiration dates and the applicable material
jurisdictions, including
foreign jurisdictions.
Recent Developments and Current Licenses Held, page 31
19. We note your disclosure on page 1 that "[f]inal approval from the DEA
is conditioned on,
among other things, completed construction of manufacturing and
production facilities
and systems" as well as your disclosure here that final registration
"is contingent upon
completion of construction and a successful inspection by the DEA of
[your] facilities."
We also note your disclosure in a risk factor on page 9 that the DEA
will need to satisfy
various obligations under the MOA. Please revise your disclosure to
clarify all conditions
contained in the MOA that you must meet as well as any obligations
that must be fulfilled
by the DEA or other authorized agencies prior to final approval and
registration.
20. We note that you state on page 40 that you did not have any employees
for the years 2019
or 2020. Please disclose your current number of total employees and
number of full-time
employees in your Business section. Refer to Item 101(h)(4)(xii) of
Regulation S-K.
Legal Background - Cannabis, page 32
21. Please revise your disclosure to discuss the effect of all material
existing or probable
governmental regulations on your business, including, for example, the
potential for
regulation by the FDA. Please also discuss the costs and effects of
compliance with
environmental laws at the federal, state and local level that may
materially impact your
business. Refer to Items 101(h)(4)(ix) and (xi) of Regulation S-K.
Market Growth, page 34
22. We note your statement that "[n]otably, research to date indicates
that cannabis does not
pose a threat to public health and safety." Given the current legality
status of cannabis at
the federal level as well as that conclusory statements related to
safety and efficacy are
within the exclusive authority of the FDA while the FDA has not yet
found cannabis to be
safe and effective, this statement would appear to be premature.
Please remove this
statement or clarify the basis on which you have made this statement
and explain why you
believe it is adequate given the current context.
23. Please expand your disclosure to include the key assumptions
underlying the prediction
that the U.S. legal cannabis market will more than double by 2025.
Edward Robinson
FirstName LastNameEdward Robinson
Bright Green Corp
Comapany 9,
November NameBright
2021 Green Corp
November
Page 6 9, 2021 Page 6
FirstName LastName
Management
Legal Proceedings, page 39
24. We note you state that "[o]ther than as set forth below..." to your
knowledge, none of your
directors or officers are involved with ongoing legal proceedings.
There is not, however,
any additional disclosure set forth below this statement. Please
clarify whether your are
aware of any legal proceedings involving your directors or officers.
Certain Relationships and Related Person Transactions
Other Related Party Transactions, page 43
25. Please revise to ensure that your disclosure of related party
transactions provides all
information required by Item 404 of Regulation S-K. For example,
please identify the
approximate dollar value of the amount involved in the transaction and
the approximate
dollar value of the amount of the related person s interest in the
transaction. Additionally,
please clarify the number of shares of common stock issued to Mr.
Rafih.
26. We note your disclosure that the company entered into an agreement
with your director
Lynn Stockwell for an unsecured, non-interest bearing note. Please
file any
written agreement for this loan as an exhibit to the registration
statement, or, in the
alternative, please tell us why you believe that you are not required
to file such agreement.
Refer to Item 601(b)(10) of Regulation S-K.
Principal and Registered Stockholders, page 44
27. Please revise your disclosure to identify the natural person(s) who
have sole or shared
voting or investment power for the securities beneficially owned by E.
MAILLOUX
ENTERPRISES, INC. For guidance, please refer to Item 403 of Regulation
S-K.
Plan of Distribution, page 54
28. We note your disclosure on page 54 that "there has not been a recent
sustained history of
trading in our common stock in a private placement market prior to
listing." However, on
the Cover Page you state that "[y]our common stock has a limited
history of trading in
private transactions" and on page 49 you state that "[y]our common
stock has a history of
trading in private transactions." Please revise your disclosure
throughout the registration
statement to clarify these inconsistencies. To the extent that you
have determined that
there has not been a recent sustained history of trading in your
common stock in a private
placement market prior to listing, please explain your basis for
making this determination
and specify what you took into consideration.
29. We note your disclosure here that [i]f the Registered Stockholders
utilize a broker-dealer
in the sale of the common stock being offered by this prospectus, such
broker-dealer may
receive commissions in the form of discounts, concessions, or
commissions . . .
[which] may be in excess of those customary in the types of
transactions
involved. However, we also note that you disclose on the Cover Page
that the Registered
Edward Robinson
FirstName LastNameEdward Robinson
Bright Green Corp
Comapany 9,
November NameBright
2021 Green Corp
November
Page 7 9, 2021 Page 7
FirstName LastName
Stockholders only intend to engage in "ordinary brokerage
transactions." Please revise
your disclosure to resolve this apparent inconsistency regarding the
receipt of excessive
compensation.
Notes to Unaudited Condensed Financial Statements for the three and six months
ended June 30,
2021 and 2020
10. Subsequent Events, page F-14
30. Please separately disclose the number of shares of common stock issued
for services and
for cash, including the value of the shares issued for services and
the amount of cash
received, respectively.
Notes to Financial Statements for the years ended December 31, 2020 and 2019
2. Basis of Presentation, page F-23
31. You indicate on page 28 that the financial statements included in the
prospectus have been
prepared on a going concern basis and that your ability to continue as
a going concern is
dependent upon, among other things, your ability to raise capital to
start building facilities
to grow, research and distribute medical plants. Please include the
disclosure required by
ASC 205-40-50 regarding the conditions and events that raise
substantial doubt about
your ability to continue as a going concern and the impact of
management s plans on
those conditions and events.
7. Stockholders Equity, page F-30
32. We note your disclosure that you estimated the value of the shares of
common stock
issued for services using the asset approach. Please tell us how you
determined the asset
approach was appropriate given the cash transactions for shares of
common stock.
Item 15. Unregistered Sales of Securities, page II-2
33. Please revise your disclosure to furnish the complete disclosure
required
by Item 701 of Regulation S-K. In this regard, please provide the date
of each sale, name
the persons or identify the class of persons to whom the securities
were sold, indicate the
section of the Securities Act or the rule of the Commission under
which exemption from
registration was claimed, and state briefly the facts relied upon to
make the exemption
available for all the transactions disclosed here.
General
34. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Tracey Houser at (202) 551-3736 or Angela Connell at
(202) 551-3426
Edward Robinson
Bright Green Corp
November 9, 2021
Page 8
if you have questions regarding comments on the financial statements and
related
matters. Please contact Jessica Ansart at (202) 551-4511 or Celeste Murphy at
(202) 551-3257
with any other questions.
Sincerely,
FirstName LastNameEdward Robinson
Division of
Corporation Finance
Comapany NameBright Green Corp
Office of Life
Sciences
November 9, 2021 Page 8
cc: Rob Condon
FirstName LastName