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United States securities and exchange commission logo
May 29, 2020
Jack Hightower
Chairman and Chief Executive Officer
HighPeak Energy, Inc.
421 W. 3rd Street, Suite 1000
Fort Worth, TX 76102
Re: HighPeak Energy,
Inc.
Amendment No. 2 to
Registration Statement on Form S-4
Filed May 13, 2020
File No. 333-235313
Dear Mr. Hightower:
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
January 24, 2020 letter.
Amendment No. 2 to Registration Statement on Form S-4
Summary Term Sheet , page xi
1. We note your disclosure
that management anticipates recommending that the board of
HighPeak Energy declare
a one-time cash dividend to holders of Pure's Class A Common
Stock that do not
redeem their shares prior to the business combination in an amount per
share equal to the
amount by which the per-share redemption value of Pure's Class A
Common Stock at the
closing of the business combination exceeds $10.00 per share as
promptly as practicable
following the closing of the business combination. Please revise
to discuss how this
dividend, if paid, would impact your liquidity and drilling and
development plans.
Jack Hightower
FirstNameEnergy, Inc.
HighPeak LastNameJack Hightower
Comapany NameHighPeak Energy, Inc.
May 29, 2020
Page 2
May 29, 2020 Page 2
FirstName LastName
2. Please tell us the exemption from registration that you intend to rely
on for the issuance of
shares in the Large Investor Offer and the facts relied upon to make
the exemption
available.
Risk Factors
Risks Related to HighPeak Energy and the Business Combination
The HighPeak Group, including the Principal Stockholder Group, will have
significant influence
over HighPeak Energy, page 48
3. We note your disclose hereunder and in the risk factor titled "A
significant portion of
HighPeak Energy's total outstanding shares will be restricted..." on
page 58 that the
HighPeak Group will own voting stock representing approximately 69% of
HighPeak
Energy's outstanding voting power. Please expand your disclosure to
discuss HighPeak
Group's voting interests under the Illustrative Redemption and Maximum
Redemption
Scenarios and the impact thereof.
The A&R Charter will designate the Court of Chancery of the State of Delaware
as the sole and
exclusive forum, page 59
4. We note your response to prior comment 3 and reissue the comment in
part. Please
expand your disclosure to discuss your exclusive forum provision in
its entirety, including
Section B of Article Eighth of your A&R Charter.
Proposal No. 1 - The Business Combination Proposal
Related Arrangements
A&R Charter, page 99
5. We note your disclosure here and elsewhere states that HighPeak Energy
will amend and
restate its certificate of incorporation to increase the authorized
shares of common stock to
600,000,000, but note that the A&R Charter filed as Annex B reflects
that the company
shall have authority to issue 900,000,000 shares of common stock.
Please revise or
advise.
Background of the Business Combination
New Business Combination Transaction, page 114
6. We note your disclosure that the Deal Team provided the Pure Special
Committee with an
updated investor presentation on May 3, 2020 in response to inquiries
from the Pure
Special Committee. Please expand your disclosure to describe the
discounted cash flow
analyses and comparable company analyses include therein.
7. Please revise to explain how the Deal Team determined the proposed
total enterprise value
of $845 million for the new business combination and the new proposed
value of $750
million for the HighPeak Funds' contributed properties. In addition,
please quantify the
change in value of these properties from the Original HPK Business
Combination.
Jack Hightower
FirstNameEnergy, Inc.
HighPeak LastNameJack Hightower
Comapany NameHighPeak Energy, Inc.
May 29, 2020
Page 3
May 29, 2020 Page 3
FirstName LastName
8. Please revise to explain how the Pure Special Committee determined
that this new
business combination transaction was fair to Pure's stockholders from
a financial point of
view.
9. Provide us with the three reserve reports prepared by CG&A and the
"roll forward"
reserve report prepared by the Deal Team identified on page 115 of
Amendment No. 2.
10. Tell us the extent to which the underlying reserve volumes and
forecasts from the CG&A
reserve reports were utilized in preparing the "roll forward" reserve
report prepared by the
Deal Team.
11. Tell us the extent to which the reserve reports prepared by CG&A were
utilized to prepare
the two downside sensitivity cases identified on page 117 of Amendment
No. 2.
12. Tell us how the downside sensitivity cases identified on page 117
compare to the reserves
sensitivity Cases A, B and C presented on page 168 of Amendment No. 2.
13. Tell us the extent to which the three reserve reports prepared by CG&A
and the "roll
forward" reserve report prepared by the Deal Team were utilized in
preparing Cases 1, 2
and 3 presented on pages 119 through 122.
14. Tell us how the forecast volumes and related costs from the three CG&A
reserve reports
as of December 31, 2019 and the "roll forward" reserve report as of
March 31, 2020 were
adjusted to obtain the production volumes and related revenue and the
EBITDAX figures
shown for the twelve month periods ending July 31, 2021 and 2022,
respectively, and the
fiscal years ending 2020, 2021, and 2022, respectively, shown in Cases
1, 2 and 3.
15. Expand your disclosure to present the total production volumes (MMBoe)
used to
determine the line item figures for the "EBITDAX," if different from
the production
volumes presented in Cases 1, 2, and 3 used to determine the line item
figures for the
"Total Revenue."
16. Expand your disclosure to discuss the usefulness of the figures shown
in the line item
"Total Revenue" based on the allocations of proved developed,
undeveloped and
unproved volumes derived from the CG&A reserve report as of December
31, 2019
compared to the figures shown in the line item for the "EBITDAX" based
on using
different allocations of proved developed, undeveloped and unproved
volumes derived
from the internal reserve report as of March 31, 2020.
17. Tell us how the outcomes of Cases 1, 2, and 3 presented on pages 119
through 122 and the
resource estimates presented on page 124 were utilized in arriving at
a value for the New
Business Combination Transaction.
Unaudited Prospective Financial, Operating and Reserve Information Provided to
the Pure
Board, page 119
18. Please define unlevered free cash flows and cumulative unlevered free
cash flow, and
disclose any assumptions underlying their calculation as used in the
case models. Please
Jack Hightower
FirstNameEnergy, Inc.
HighPeak LastNameJack Hightower
Comapany NameHighPeak Energy, Inc.
May 29, 2020
May 29, 2020 Page 4
Page 4
FirstName LastName
provide textual disclosure to describe the graphic sensitivities for
the financial projections
provided to and discussed with Pure Special Committee, and the
resulting trailing twelve
months EBITDA, capital expenditures and net debt based on those
sensitivities.
Information about the Target Assets
Estimated Proved Reserves, page 166
19. Tell us what consideration will be given to providing estimates of
proved developed and
undeveloped reserves aligned with the update of your financial
statements in your next
amendment to Form S-4.
Consolidated Financial Statements, page F-1
20. Please update the historical and pro forma financial statements prior
to the effective date
of your registration statement to comply with Rule 3-12 and Article 11
of Regulation S-X.
Annex A, page A-1
21. Please revise your filing to include the Business Combination
Agreement dated May 4,
2020 and referenced in your disclosure as Annex A.
Exhibits
22. Please have counsel revise its opinion to include a separate
conclusion regarding the
legality of the common shares and the warrants. The revised opinion
should
separately opine that the common shares will be validly issued, fully
paid and non-
assessable and separately that the warrants will constitute the
binding obligations of the
Company.
23. We note the Warrant Agreement filed as Exhibit 4.4 provides that the
company agrees that
any action, proceeding or claim arising out of or relating in any way
to the agreement shall
be brought and enforced in the courts of the State of New York or the
United States
District Court for the Southern District of New York, and irrevocably
submits to such
jurisdiction, "which jurisdiction shall be exclusive." We also note
that the company
waives any objection to such "exclusive" jurisdiction. If this
provision requires investors
in this offering to bring any such action, proceeding or claim in the
courts of the State of
New York or the United States District Court for the Southern District
of New York,
please disclose such provision in your registration statement, and
disclose whether this
provision applies to actions arising under the Securities Act or
Exchange Act. If the
provision applies to actions arising under the Securities or Exchange
Act, please also add
related risk factor disclosure. If this provision does not apply to
actions arising under the
Securities Act or Exchange Act, please tell us how you will inform
investors in future
filings that the provision does not apply to actions arising under the
Securities Act or
Exchange Act.
Jack Hightower
HighPeak Energy, Inc.
May 29, 2020
Page 5
You may contact Joseph Klinko, Staff Accountant, at 202-551-3824 or John
Cannarella,
Staff Accountant, at 202-551-3337 if you have questions regarding comments on
the financial
statements and related matters. Please contact Irene Barberena-Meissner, Staff
Attorney, at 202-
551-6548 or Karina Dorin, Staff Attorney, at 202-551-3763 with any other
questions.
Sincerely,
FirstName LastNameJack Hightower
Division of
Corporation Finance
Comapany NameHighPeak Energy, Inc.
Office of Energy &
Transportation
May 29, 2020 Page 5
cc: Taylor Landry, Esq.
FirstName LastName