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March 3, 2020
Eli Baker
Secretary and Vice Chairman
DEAC NV Merger Corp.
2121 Avenue of the Stars, Suite 2300
Los Angeles, California 90067
Re: DEAC NV Merger Corp.
Amendment No. 1 to Registration Statement on Form S-4
Filed February 13, 2020
File No. 333-235805
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 February 2,
2020 letter.
Amendment No. 1 to Registration Statement on Form S-4 filed February 13, 2020
Unsuitable Persons, page 35
1. We note your revised disclosure in response to our prior comment 3. Your
disclosure
states that all Stockholder Parties have agreed and acknowledged the
application of the
provisions concerning unsuitability that are contained in your proposed
charter. Please
explain whether these provisions apply only to the Stockholder Parties,
or if they apply to
all holders of New DraftKings common stock. To the extent they apply to
all holders,
please state whether the holder is agreeing to the relevant provisions
in your proposed
charter by voting to approve the Business Combination Proposal and the
relevant
Advisory Charter Proposal I. Please include similar disclosure on page
141 where you
discuss the relevant proposal. We also note your revised disclosure on
page 207 where
Eli Baker
DEAC NV Merger Corp.
March 3, 2020
Page 2
you state that gaming authorities have the right to investigate
"certain individuals or
entities" to determine suitability. Please disclose the particular
entities or individuals that
could be subject to such investigation.
"DraftKings primarily relies, and we will rely, on Amazon Web Services . . .",
page 54
2. We note your response to comment 5, and your statements that
"[alternative] providers
could host DraftKings' platform on a substantially similar basis to
AWS," and that
"transitioning the cloud infrastructure currently hosted by AWS to
alternative providers
could potentially be disruptive and DraftKings may incur significant
one-time costs." In
order to provide investors context as to the importance of this
contract to your business,
please disclose these statements in your filing.
"New DraftKings' amended and restated articles . . .", page 86
3. We note your response to our prior comment 30. We further note that
Section 22 of the
Securities Act creates concurrent jurisdiction for federal and state
courts over all suits
brought to enforce any duty or liability created by the Securities Act
or the rules and
regulations thereunder. It appears that your exclusive forum provision
applies to
Securities Act claims. If so, please revise your risk factor to state
that there is uncertainty
as to whether a court would enforce such a provision.
Background of the Business Combination, page 98
4. We note your response to comment 10, and your amended disclosure
throughout this
section, but your amended disclosure is not completely responsive to
our comment.
Where you describe that certain terms, such as the "super voting" or
earnout shares, were
being negotiated by the parties, please provide more detail as to each
party's position on
such issues and how you reached agreement on the final terms. For
example, you disclose
on page 100 that "[t]he term sheet noted that the parties were
discussing the potential to
issue a separate class of 'super-voting' shares as part of the
consideration payable in the
transaction." Please provide more detail about these discussions, and
how the parties
reached an agreement on final terms. Do the same for other negotiated
terms, including
the inclusion of earnout shares, the determination of the amount of
the Minimum Proceeds
Condition and the related private placement, and the decision to cash
out certain
DraftKings stockholders, as applicable.
5. We note your response to comment 11, and your amended disclosure on
pages 98 through
100 of your filing, but we were unable to find disclosure responsive to
our comment. In
this regard, please discuss negotiations regarding the proposed
valuation of the
transaction, including how you ended up with the valuations used in
determining the
FirstName LastNameEli Baker
consideration payable to DK Equityholders and SBT Equityholders. For
example, please
Comapany NameDEAC NV Merger Corp. that the consideration be based on valuations
of
explain how the parties determined
March $2,055,241,409 and 407,211,831, and how that valuation amount was
determined.
3, 2020 Page 2
FirstName LastName
Eli Baker
FirstName LastNameEli Baker
DEAC NV Merger Corp.
Comapany NameDEAC NV Merger Corp.
March 3, 2020
Page 3
March 3, 2020 Page 3
FirstName LastName
6. We note your response to comment 12, and your amended disclosure that
"[d]iscussions
with the third potential target did not progress to detailed
negotiations because we
ultimately determined that the target business would not be as
attractive to DEAC and its
stockholders as a business combination with DraftKings and SBT."
Please briefly
describe why this business was not as attractive to DEAC and its
stockholders as a
business combination with DraftKings and SBT.
The Private Placement, page 98
7. We note your disclosure that: "[i]n order to satisfy the Minimum
Proceeds Condition,
DEAC entered into the Subscription Agreements with the PIPE Investors,
pursuant to
which, among other things, DEAC agreed to issue and sell in private
placements an
aggregate of 30,471,352 shares of DEAC Class A common stock to the
PIPE Investors for
$10.00 per share, plus the issuance by DEAC to the PIPE Investors of
an aggregate of 3.0
million warrants to purchase shares of DEAC common stock, which
warrants are identical
to our public warrants." Please tell us why you are registering these
private placement
shares on this registration statement. In this regard, it appears from
your disclosure on
page 98 and the subscription agreement contained in Annex C that
investors in the private
placement have been offered shares of New DraftKings, and agreed to
pay for and take
delivery of shares of New DraftKings.
Market Access and Compliance Platform, page 192
8. We note your response to comment 20. With a view towards understanding
your business
model, please briefly disclose the terms of each of the agreements
discussed in this
section.
Legal Proceedings, page 202
9. We note your response to comment 25. Please revise your disclosure
relating to this
litigation to state, if accurate, that you are unable to provide a
meaningful estimate of the
possible loss or range of possible loss, including the reasons why.
Please also disclose, if
accurate, that you do not believe that the outcome of this proceeding
will have a material
adverse effect on the combined company's financial condition, although
the outcome
could be material to the combined company's operating results for any
particular period,
depending, in part, upon the operating results for such period. Please
also disclose the
outcome of the status conference held on January 8, 2020.
Index to Financial Statements, page F-1
10. Please update the financial statements (and associated information in
the filing) for all
entities in the filing pursuant to Rules 3-12(b) and (d) and 8-08(b)
of Regulation S-X as
appropriate.
Eli Baker
FirstName LastNameEli Baker
DEAC NV Merger Corp.
Comapany NameDEAC NV Merger Corp.
March 3, 2020
Page 4
March 3, 2020 Page 4
FirstName LastName
You may contact Aamira Chaudhry at (202) 551-3389 or Doug Jones at
(202) 551-3309
if you have questions regarding comments on the financial statements and
related
matters. Please contact Katherine Bagley at (202) 551-2545 or Erin Jaskot at
(202) 551-3442
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Elliott Smith