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United States securities and exchange commission logo
April 14, 2023
Daniel Kimes
Chief Executive Officer
ROC Energy Acquisition Corp.
16400 Dallas Parkway
Dallas, TX 75248
Re: ROC Energy
Acquisition Corp.
Amendment No. 1 to
Registration Statement on Form S-4
Filed April 3, 2023
File No. 333-269763
Dear Daniel Kimes:
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
17, 2023 letter.
Amendment No. 1 to Registration Statement on Form S-4
Cover Page
1. We note your statement
in response to prior comment 1 that "the consummation of a PIPE
Investment is not a
condition to the business combination or otherwise necessary for the
parties to complete the
business combination." We also note your disclosure on page 18
that "The Business
Combination Agreement requires that the aggregate cash available to
ROC at the Closing from
either the Trust Account, the PIPE Financing, or a combination
of the two (in any
case, after giving effect to the redemption of any shares of Common
Stock but prior to
paying expenses of ROC and DTI, as set forth in the Business
Combination Agreement)
shall equal or exceed $55,000,000 (the 'Minimum Cash
Condition')." On page
76, you indicate that the Maximum Redemption Scenario presented
Daniel Kimes
ROC Energy Acquisition Corp.
April 14, 2023
Page 2
in the unaudited for pro forma combined financial information assumes
the receipt of
$12.9 million cash in the PIPE Financing to meet the Minimum Cash
Condition on $55.0
million. Please revise the registration statement to disclose whether
or not the
consummation of a PIPE Investment is a condition to the business
combination or may
otherwise be necessary for the parties to complete the business
combination.
2. Please clarify that ROC s Sponsor, directors, officers and their
affiliates are
participating in the PIPE Financing.
Questions and Answers about the Proposals for ROC Stockholders
Q: What conditions must be satisfied to complete the business combination?,
page 2
3. Please disclose the amount of the Minimum Cash Condition and include
the definition of
"Minimum Cash Condition" under "Certain Defined Terms."
Q: What equity stake will our current stockholders and the holders of our
Founder Shares hold in
PubCo...?, page 3
4. In light of the fact that public shareholders may redeem up to 95% of
the public shares and
the unlikely possibility of no redemptions, balance this disclosure by
providing the equity
stakes assuming maximum redemptions.
Q: What are the material U.S. federal income tax consequences of the business
combination to
DTI stockholders?, page 11
5. We note the disclosure you provided in response to prior comment 5.
Please revise your
disclosure here and throughout the filing to state clearly that the
disclosure related to tax
consequences of the business combination to DTI stockholders is the
opinion of Bracewell
LLP.
Voting Power and Implied Ownership of PubCo Upon Consummation of the Business
Combination, page 24
6. Revise footnote (9) to provide a breakdown of the PIPE investors,
specifically quantifying
the PIPE shares issued to the Sponsors. Alternatively, consider
revising this presentation
to be consistent with the one on page 81.
7. We note that you present a 95% redemption scenario here, but present a
Maximum
Redemption Scenario in the pro forma financial information that is
different. Please
prominently disclose that the 95% redemption scenario assumes the waiver
of the
Minimum Cash Condition, and disclose the amount of cash you would have
for purposes
FirstName LastNameDaniel Kimes
of the Minimum Cash Condition under the 95% redemption scenario.
Disclose why you
Comapany NameROC
present Energy
a different Acquisition
maximum Corp.scenario in your pro forma
financial information,
redemption
and2023
April 14, consider
Page also
2 providing that Maximum Redemption Scenario here.
FirstName LastName
Daniel Kimes
FirstName LastNameDaniel Kimes
ROC Energy Acquisition Corp.
Comapany
April NameROC Energy Acquisition Corp.
14, 2023
April 314, 2023 Page 3
Page
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Information
1. Basis of Pro Forma Presentation, page 80
8. Revise the table on page 81 or provide a footnote to the table to
indicate that the PIPE
shares of 198 are to an unaffiliated investor and that the ROC Sponsor
shares include
1,485 shares issued in the PIPE Financing.
2. Accounting for the Business Combination, page 81
9. We note the revisions made in response to prior comment 16. As the
business
combination will not be consummated if 95% of the shares are redeemed,
please revise to
disclose HHEP's expected ownership at the maximum redemption scenario
as described
on page 76.
3. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of
December
31, 2022, page 82
10. We note your response to comment 17. Please describe the nature of the
$9.7 million
transaction costs incurred by ROC and explain your basis for recording
them as a
reduction of equity. In this regard, we note that costs incurred by
the SPAC to
consummate the merger are generally expensed as incurred unless the
costs relate to the
SPAC issuing debt or equity (e.g., shares acquired by PIPE).
11. We note your response to prior comment 18. As there does not appear to
be a legal
requirement to exercise the DTI stock options and as the exercise of
such options does not
appear to be an event that is trigged by the business combination,
please remove any
adjustments for the exercise of the DTI stock options from the pro
forma financial
statements. Refer to Article 11-01(a) of Regulation S-X.
Financial Statements (Audited) of Drilling Tools International Holdings, Inc.
Note 1 - Summary of Significant Accounting Policies
Revenue Recognition, page F-9
12. Your revised disclosures on page F-10 indicate that product sales
consist of charges for
rented tools that are damaged beyond repair, charges for lost-in-hole,
and charges for lost-
in-transit while in the care, custody or control of the Company s
customers, and other
charges for made to order product sales. Please tell us more about
each of these product
categories and explain when revenue is recognized for each. Also,
provide us with a
breakdown of the revenue recognized for each of these categories in
2022 and 2021.
13. Your disclosure here and on page 164 indicates that product sales
revenue is recognized
when the product is made available to the customer for pickup at your
shipping dock.
However, your revised disclosure on page 165 indicates that your Topic
606 revenue,
which appears to be for product sales, is generally recognized at the
time of delivery to or
pick-up by the customer. Please revise to clarify when product revenue
is recognized.
Daniel Kimes
ROC Energy Acquisition Corp.
April 14, 2023
Page 4
14. We note your response to prior comment 31. Please explain to us in
greater detail how
you determined that control has transferred and that the customer has
the significant risks
and rewards of ownership. Tell us whether your product sales represent a
bill-and-hold
arrangement and how you considered of each of the criteria in ASC
606-10-55-83. As
part of your response, please quantify the amount of revenue recognized
from these
arrangements for the periods presented.
Note 3 - Balance Sheet Details - Current Assets and Current Liabilities, page
F-18
15. We note your response to prior comment 29. Please revise to include the
disclosures
required by ASC 330-10-50-2. In addition, tell us in which line item the
write-off was
recognized in your consolidated statements of operations and
comprehensive income.
Also, as previously requested, tell us what consideration was given to
disclosing the
significant write-off in your discussion of operating costs in MD&A.
Note 9 - Income taxes, page F-22
16. We note your response to prior comment 32. Please further revise your
disclosure to
quantify each of the significant reconciling items in the "other"
category. Refer to Rule 4-
08(h)(2) of Regulation S-X.
General
17. We note your response to prior comment 33. We also note that you intend
to include risk
factor disclosure about CFIUS-related risks in your Form 10-K for the
year ended
December 31, 2022. Please include similar risk factor disclosure in this
registration
statement.
18. We note the disclosure provided in response to prior comment 34. As
requested, please
provide an analysis on how any such purchases would comply with Rule
14e-5.
You may contact Chen Chen, Staff Accountant, at (202) 551-7351 or
Christine Dietz,
Senior Staff Accountant, at (202) 551-3408 if you have questions regarding
comments on the
financial statements and related matters. Please contact Alexandra Barone,
Staff Attorney, at
(202) 551-8816 or Kathleen Krebs, Special Counsel, at (202) 551-3350 with any
other questions.
Sincerely,
FirstName LastNameDaniel Kimes
Division of
Corporation Finance
Comapany NameROC Energy Acquisition Corp.
Office of
Technology
April 14, 2023 Page 4
cc: Michael J. Blankenship
FirstName LastName