United States securities and exchange commission logo
November 12, 2020
Eli Baker
President, Chief Financial Officer and Secretary
Flying Eagle Acquisition Corp.
2121 Avenue of the Stars, Suite 2300
Los Angeles, CA 90067
Re: Flying Eagle
Acquisition Corp.
Amendment No. 2 to
Registration Statement on Form S-4
Filed November 2,
2020
File No. 333-248638
Dear Mr. Baker:
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
October 28, 2020 letter.
Amendment No. 2 to Registration Statement on Form S-4
Summary of the Proxy Statement/Prospectus
FEAC s Board of Directors Reasons for Approval of the Business
Combination, page 28
1. We note your response
to prior comment 8. Please revise to clarify that this measure is an
estimate based on the
maximum time allowed to complete a tournament for your top three
games and may not be
indicative of actual user playing time. Also, disclose that since
Skillz does not track
end-user time on the platform, the actual time users spend per day in
gameplay may actually
be less than this estimate.
Eli Baker
FirstName LastNameEli
Flying Eagle AcquisitionBaker
Corp.
Comapany 12,
November NameFlying
2020 Eagle Acquisition Corp.
November
Page 2 12, 2020 Page 2
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Statements
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 148
2. We note your revised disclosure in response to prior comment 5. For
pro forma balance
sheet purposes, the number of pro forma common shares prior to
recapitalization should
reflect the number of common shares issued and outstanding, including
unvested
restricted shares. In this regard in Note 9 of Skillz financial
statements you disclose that
restricted shares issued to executives from the early exercise of
options are included in
common stock issued and outstanding within the financial statements.
Please revise note
(m) to include all issued and outstanding restricted shares or advise.
Also, revise note (g)
to quantify the number of shares exchanged for cash consideration.
Finally, please revise
the pro forma ownership disclosure on page 13 to include outstanding
unvested restricted
shares held by Skillz shareholders.
Business of New Skillz
Our Developer Community, page 170
3. In your revised disclosure in response to prior comment 1 you state
that the negotiated
agreements do not impose any obligations on Skillz during the
post-termination period.
Clarify whether end-users can continue to play the games and whether
Skillz has the
option, but not obligation, to host paid competitions for the games
that must remain on
your platform during this period. Also, revise to describe the
differences in the company's
rights and obligations as established in the standard developer
agreement and the
negotiated agreements with your significant developers, including
marketing support
commitments and termination provisions.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Skillz
Overview, page 180
4. You state here that Tether and Big Run accounted for 83% and 0.1%,
respectively of your
revenue for the year ended December 31, 2019. However, on page F-33
you state that
revenue from games provided by two developer partners accounted for
83% and 7% of
your revenues. Please explain this apparent inconsistency or revise.
5. Please revise your discussion of ARPU to clarify that this measure
does not include end-
user incentives that were included in sales and marketing expense and
quantify such
amounts for each period presented.
Eli Baker
FirstName LastNameEli
Flying Eagle AcquisitionBaker
Corp.
Comapany 12,
November NameFlying
2020 Eagle Acquisition Corp.
November
Page 3 12, 2020 Page 3
FirstName LastName
Our Financial Model, page 181
6. We note your revised disclosure in response to prior comment 9. Please
explain your
basis for using a standard cost of revenue margin across all periods
considering the
increasing trend in cost of revenue as a percentage of reported
revenues over the periods
presented. In your response, tell us how the unit economics would be
impacted had the
increasing margins been used for each period.
7. In your response to prior comment 10 you state that deposits represent
the total amount of
cash received. Please address the following:
Reconcile the amount of gross deposits as provided in your
response with the amount
of Gross Marketplace Volume (GMV), which you define as the total
entry fees paid
by users;
Clarify whether GMV includes cash entry fees paid from new
deposits as well as fees
paid with credits redeemed within the Skillz loyalty platform and
fees paid from prior
winnings that have not been withdrawn;
If GMV includes entry fees paid with loyalty credits, quantify
the amount of GMV
attributable to such credits, if determinable;
Tell us whether the amount of deposits provided in your
response includes user
winnings that have not been withdrawn;
Clarify whether you earn revenue from entry fees that are paid
from users winnings
that were not withdrawn and tell us whether developers share in
such revenue; and
Explain how winnings are reflected in your financial statements
prior to either being
withdrawn or used as a paid entry fee.
Beneficial Ownership of Securities, page 220
8. We note the revisions made to the beneficial ownership table. Please
revise footnote 2 to
identify the managing members of Eagle Equity Partners II, LLC.
Skillz Financial Statements as of December 31, 2019 and 2018
Note 7. Preferred Stock, page F-47
9. Your revised disclosure in response to prior comment 5 indicates that
the Conversion Rate
for each period presented was ten shares of Class B common stock for
each share of
preferred stock. Please explain the formula used to arrive at the
Conversion Rate and
specifically address how the "applicable conversion price in effect on
the date of
conversion" is determined. In this regard, if the conversion price is
set at the date of
conversion, clarify how the 10-for-1 Conversion Rate was known at
December 31, 2018
and 2019. Alternatively, clarify whether the conversion price was
changed or set via
amendments to Skillz Certificate of Incorporation as referenced in
your response or
through the terms of the Merger Agreements and if so, revise your
disclosures as
necessary.
Eli Baker
Flying Eagle Acquisition Corp.
November 12, 2020
Page 4
You may contact Joyce Sweeney, Staff Accountant, at (202) 551-3449 or
Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions
regarding comments
on the financial statements and related matters. Please contact Mitchell
Austin, Staff
Attorney, at (202) 551-3574 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
FirstName LastNameEli Baker
Division of
Corporation Finance
Comapany NameFlying Eagle Acquisition Corp.
Office of Technology
November 12, 2020 Page 4
cc: Joel Rubinstein, Esq.
FirstName LastName