United States securities and exchange commission logo
May 4, 2022
Paul Packer
Chief Executive Officer
Globis NV Merger Corp.
7100 W. Camino Real, Suite 302-48
Boca Raton, Florida 33433
Re: Globis NV Merger
Corp.
Amendment No. 2 to
Registration Statement on Form S-4
Filed April 21,
2022
File No. 333-262126
Dear Mr. Packer:
We have reviewed your amended 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our March
1, 2022 letter.
Amendment No. 2 to Registration Statement on Form S-4 filed April 21,
2022
Cover Page
1. Please disclose in this
section and the Summary of the Proxy Statement/Prospectus
section that the
combined company will be a controlled company under Nasdaq listing
rules, identify the
post-transaction controlling shareholder and the shareholder's total
voting power, and
discuss whether you plan to utilize any of the governance afforded to a
controlled company
under the rules of Nasdaq.
2. We note your disclosure
here that Globis will apply for listing, to be effective at the time
of the Business
Combination, of New Forafric s Ordinary Shares and warrants on Nasdaq
under the proposed
symbols AFRI and AFRIW, respectively. On page 87, you
disclose that Globis
has applied for the continued listing of New Forafric s Ordinary
Paul Packer
FirstName
Globis NV LastNamePaul
Merger Corp. Packer
Comapany
May 4, 2022NameGlobis NV Merger Corp.
May 4,
Page 2 2022 Page 2
FirstName LastName
Shares and warrants on Nasdaq. Please make your disclosure consistent.
Also,
please revise to clarify whether you will proceed with the offering in
the event New
Forafric's Ordinary Shares and warrants are not approved for listing
on Nasdaq.
Risk Factors, page 49
3. We note the disclosure in the COVID-19 risk factor that there is
uncertainty depending on
the effectiveness of measures to contain or treat COVID-19, and a
possibility for an
adverse impact on global economic conditions and consumer confidence
and spending,
which could materially and adversely affect your supply chain as well
as your ability to
operate efficiently. While you have not to date experienced severe
disruptions to your
supply chain in 2021 as noted on page 162, you have experienced
increases in both raw
material and logistics costs and some of your customers have ceased
operations. As
various factors through April 2022 have exacerbated supply chain
disruptions, please
update your risks characterized as potential or hypothetical if recent
supply chain
disruptions have impacted your operations.
Overview and Results of Operations of FAHL, page 171
4. We note that the cost of raw material represents almost 90% of total
cost in your business
and has a direct impact on your performance. Furthermore, we note the
material adverse
effect provisions that include changes in the cost of raw materials,
selling prices, failure to
meet projections and budgets, among other factors, impacting the
business combination
agreement. Your cost of sales increased 40.4% during the period ended
December 31,
2021, and net sales increased 33.1%. Please revise your disclosures to
provide a more
fulsome discussion of the following. Refer to Item 303(b) of
Regulation S-K and Sections
II.C.3. and II.C.5 of Release No. 33-10890:
Disclose (1) any known trends or uncertainties that have had or
are reasonably likely
to have a material impact on revenues or income and (2) any known
events that are
reasonably likely to cause a material change in the
relationship between costs and
revenues (such as known or reasonably likely future increases in
costs). Also refer to
the aforementioned Release for guidance on establishing the
"reasonably likely"
threshold.
In this regard, as various factors through April 2022 have
exacerbated supply chain
disruptions, please discuss whether supply chain disruptions have
materially affected
your outlook or business goals, results of operations or capital
resources and quantify,
to the extent possible, how your sales, profits, and/or liquidity
have been impacted
having completed the first quarter of fiscal year 2022.
Disclose the reasons for increases in sales, raw materials and
shipping costs, and any
pass throughs to price increases you may have been able to
achieve, or expect to be
able to push through. To the extent the impact of inflation and
price changes are part
of a known trend or uncertainty that has had, or is reasonably
likely to have, a
Paul Packer
FirstName
Globis NV LastNamePaul
Merger Corp. Packer
Comapany
May 4, 2022NameGlobis NV Merger Corp.
May 4,
Page 3 2022 Page 3
FirstName LastName
material impact on revenues or income, related information should
be disclosed to the
investors. In this regard, address all material underlying
reasons for material changes
in quantitative and qualitative terms in situations in which one
or more line items in
the financial statements reflect material changes from period to
period (including
those in which material changes within a line item offset one
another).
Management of New Forafric Following the Business Combination, page 185
5. The description of management of New Forafric following the business
combination does
not indicate whether they are located inside or outside of the United
States. Please
disclose the locations of the board members and CEO. Please advise
whether your
executive officers and directors reside in the United States. If not,
please include a risk
factor addressing the risk to U.S. stockholders of effecting service
of process, enforcing
judgments and bringing original actions in foreign courts to enforce
liabilities based on the
U.S. federal securities laws. Also, if at least one director or
officer is located outside the
United States, please disclose in a separate Enforceability section
the limitations and
difficulties of bringing an action against such director or officer.
Exhibits
6. Refer to Exhibit 5.1. Please have counsel revise its legal opinion to
quantify the securities
being registered under the registration statement, opine as to the
warrants, and remove the
assumptions in clauses 6(a), (b), (c), (f), (g) and (h) of the legal
opinion. It is not
appropriate for counsel to include in its opinion assumptions that
assume any of the
material facts underlying the opinion. Refer to Section II.B.3.a of
Staff Legal Bulletin No.
19.
7. We note that the tax opinion filed as Exhibit 8.1 is a short-form tax
opinion and refers to
a "Material U.S. Federal Income Tax Considerations" section. Please
revise to clearly
disclose the title of the respective section and state clearly that
the tax disclosures are the
opinion of McDermott Will & Emery. Refer to Section III.B.2 of Staff
Legal Bulletin No.
19. Please also revise to state clearly whether the transaction will
qualify as a
reorganization and provide an opinion as to the material tax
consequences of the merger.
Currently you state that the parties to the business combination
intend and expect the
transaction to qualify for U.S. federal income tax purposes as a
reorganization." Then
the disclosure states the federal income tax consequences assuming the
transaction is
treated as a reorganization. The opinion cannot assume the tax
consequence at issue.
Refer to Section III.C of Staff Legal Bulletin No. 19. If there is
uncertainty regarding
the tax treatment of the transactions, counsel may issue a "should" or
"more likely than
not" opinion to make clear that the opinion is subject to a degree of
uncertainty, and
explain why it cannot give a firm opinion. Please revise your risk
factor disclosure
accordingly. Please also remove language stating that this section is
a "discussion" or
"summary." Refer to Section III of Staff Legal Bulletin 19.
You may contact Effie Simpson, Staff Accountant, at (202) 551-3346 or
Melissa
Paul Packer
Globis NV Merger Corp.
May 4, 2022
Page 4
Gilmore, Staff Accountant, at (202) 551-3777 if you have questions regarding
comments on the
financial statements and related matters. Please contact Patrick Fullem, Staff
Attorney, at (202)
551-8337 or Sherry Haywood, Staff Attorney, at (202) 551-3345 with any other
questions.
Sincerely,
FirstName LastNamePaul Packer
Division of
Corporation Finance
Comapany NameGlobis NV Merger Corp.
Office of
Manufacturing
May 4, 2022 Page 4
cc: Mark Selinger
FirstName LastName