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United States securities and exchange commission logo
February 1, 2022
Daniel Shribman
Chief Executive Officer and Chief Financial Officer
B. Riley Principal 150 Merger Corp.
299 Park Avenue, 21st Floor
New York, New York 10171
Re: B. Riley Principal
150 Merger Corp.
Registration
Statement on Form S-4
Filed January 7,
2022
File No. 333-262047
Dear Mr. Shribman:
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
December 7, 2021 letter.
Registration Statement on Form S-4 filed January 7, 2022
Q: What happens if a substantial number of the Public Stockholders vote
in favor . . ., page 15
1. We note your response
to comment 3, including your table on page 15 showing that the
"trust value per share"
for each redemption scenario would be $10.00. This disclosure is
not completely
responsive to our comment. Please amend your disclosure to show the
potential impact of
redemptions on the per share value of the shares owned by non-
redeeming shareholders
at each redemption level, taking into account not only the money
in the trust account,
but the post-transaction equity value of the combined company. Your
disclosure should show
the impact of certain equity issuances on the per share value of the
shares, including the
exercises of public and private warrants, and the issuance of
any earn-out shares
under each redemption scenario.
Daniel Shribman
B. Riley Principal 150 Merger Corp.
February 1, 2022
Page 2
Q: May our Sponsor and our officers and directors purchase Public Shares . . .
, page 21
2. We note your response to our prior comment 4 and reissue our comment.
Please provide
your analysis as to how repurchases made by or on behalf of the
Sponsor, FaZe and/or
their affiliates would comply with Rule 14e-5, given the definition of
"covered person"
provided in Rule 14e-5(c)(3)(i). Alternatively, please revise your
disclosure to clarify that
there will be no repurchases made by or on behalf of the Sponsor, FaZe
or their affiliates.
Risk Factors
"We rely on certain assumptions and estimates . . .", page 59
3. We note your amended disclosure in response to comment 40 that you are
a "leading
digital content platform with social media reach (see our key
performance indicator, 'Total
Reach') of over 350 million as of September 30, 2021." We also note
your disclosure in
"Total Reach" on page 197 that "our calculation of Total Reach may
include the same
individual subscriber multiple times if an individual subscribes to
FaZe on multiple
platforms, our Total Reach metric may inflate our actual reach."
Please enhance your risk
factor disclosure to highlight and describe specific metrics that may
be inaccurate,
including Total Reach, and the specific consequences to your business
of these potential
inaccuracies.
Background to the Business Combination, page 117
4. We note your amended disclosure that "[o]n October 13, 2021, White &
Case held a call
with FaZe to discuss employment compensation and benefits matters. The
focus of this
call was to better understand FaZe's workforce and FaZe's process for
classification of
certain service providers as independent contractors, including the
nature of work
performed by such independent contractors. FaZe provided details
regarding the
breakdown of its workforce and its process for classifying independent
contractors."
Please amend your risk factor disclosure to discuss the risks, if any,
related to FaZe's
classification of certain entities as "independent contractors." In
your risk factor
disclosure, please discuss any current or evolving laws or regulations
related to this
classification that are applicable to FaZe's business.
5. We note your amended disclosure that "[o]n September 9, 2021, the
PowerPoint
presentation was stylistically revised by FaZe to . . . provide revised
detail on certain
assumptions underlying the projections, changing the description around
the assumption
that FaZe will consummate an acquisition or partnership in China in 2022
to an
international acquisition or partnership in 2022, and changing the
description around the
FirstName LastNameDaniel Shribman
consumer acquisitions assumption to note that the acquisitions are to be
identified in the
Comapany NameB.
future." Riley
Please Principal
amend 150 Merger
your disclosure to Corp.
clearly disclose why FaZe
revised certain
assumptions
February underlying
1, 2022 Page 2 the projections.
FirstName LastName
Daniel Shribman
FirstName LastNameDaniel Shribman
B. Riley Principal 150 Merger Corp.
Comapany1,NameB.
February 2022 Riley Principal 150 Merger Corp.
February
Page 3 1, 2022 Page 3
FirstName LastName
The BRPM Board's Reasons for the Approval of the Business Combination
Comparable Companies Analysis, page 125
6. We note your response to comment 26, and your amended disclosure on
page 125. Please
amend your disclosure to provide footnote or narrative disclosure to
your table that briefly
defines the metrics presented in the table. Please also amend your
disclosure to clarify
why the metrics presented were useful in evaluating the companies
listed.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Balance
Sheet, page
167
7. Refer to footnote (F) - We have reviewed the revisions to footnote (F)
but are still unclear
as to how the adjustments to additional paid-in-capital and
accumulated deficit for the
conversion of the FaZe notes were determined. Please revise to explain
in further detail
how these components of the adjustment were determined including the
number of shares
to be issued on conversion and the fair values of the shares issued.
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined
Statements
of Operations, page 169
8. Refer to footnote (II) - Please revise this footnote to disclose the
number of FaZe shares
and the related fair value of the consideration issued to extinguish
the FaZe notes. Also,
please disclose the intrinsic value of the FaZe common stock and the
conversion ratio of
the FaZe notes at the commitment date.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
FaZe
COVID Impact, page 195
9. We reissue our prior comment 44 in part. Please clarify whether you
believe your
sponsorship deals with DraftKings, McDonalds and General Mills and
your ability to
drive engagement were directly related to the uptick in video game
usage and content
creation due to COVID-19.
Key Components of Sales and Expenses
Revenue, page 202
10. We note your revised disclosure in response to our prior comment 49
and reissue our
comment in part. Please describe how you generate revenue from
advertising in
connection with your Esports events, and the typical revenue
percentage or a range of
revenue percentages you receive from your participation in closed
Esports leagues.
Daniel Shribman
FirstName LastNameDaniel Shribman
B. Riley Principal 150 Merger Corp.
Comapany1,NameB.
February 2022 Riley Principal 150 Merger Corp.
February
Page 4 1, 2022 Page 4
FirstName LastName
Results of Operations, page 204
11. Throughout your discussion of FaZe's results of operations, where you
discuss multiple
factors contributing to changes in line items, please quantify the
contribution of each
factor. For example, you disclose on page 205 that "[t]he increase in
Esports costs of $2.9
million was due primarily to increases in the sale of digital goods,
player salaries, prize
money costs provided to talent members and costs from player
transfers." Quantify the
contribution of each of the factors discussed. Make conforming changes
throughout your
Results of Operations discussion, as applicable.
Certain Relationships and Related Party Transactions
FaZe
Cox Investment Holdings, page 244
12. We note your revised disclosure in response to our prior comment 53.
In an appropriate
place in your filing, please discuss any resulting dilution to
shareholders of New FaZe as a
result of the conversion of the Cox Notes.
Material U.S. Federal Income Tax Considerations, page 248
13. We reissue our prior comment 54. Please revise your disclosure to
discuss the tax
consequences of the Business Combination as a whole and file an
opinion, as needed. In
this regard, we note that the transaction you are registering involves
the exchange of FaZe
shares for shares of New FaZe common stock. Refer to Item 4(a)(6) of
Form S-4, which
requires a summary of "the federal income tax consequences of the
transaction" as a
whole.
FaZe Clan Inc. Financial Statements
Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Revenue Recognition and Contract Balances, page F-40
14. We note your response to comment 56. Please revise to clearly identify
the nature of the
performance obligations specified in your contracts with multi-channel
networks (MCNs)
and explain how that interacts with your performance obligation with
Google AdSense,
which you state is the customer for all these contracts, including the
arrangements with the
MCNs. Refer to ASC 606-10-50-12.
General
15. We note that you removed references to customer "loyalty" in response
to our prior
comment 40 because you noted that loyalty is not a metric that FaZe
tracks internally or
otherwise. Please make conforming revisions where you reference FaZe's
brand loyalty
elsewhere in your filing.
Daniel Shribman
B. Riley Principal 150 Merger Corp.
February 1, 2022
Page 5
16. We note you responses to our prior comments 12 and 42. Please tells us
the percentage of
revenue generated by your agreements with FaZe Rug and G Fuel,
respectively, for the
nine months ended September 30, 2021, or the most recent financial period
in your filing.
You may contact Nasreen Mohammed at 202-551-3773 or Linda Cvrkel at
202-551-3813
if you have questions regarding comments on the financial statements and
related
matters. Please contact Taylor Beech at 202-551-4515 or Katherine Bagley at
202-551-2545
with any other questions.
Sincerely,
FirstName LastNameDaniel Shribman
Division of
Corporation Finance
Comapany NameB. Riley Principal 150 Merger Corp.
Office of Trade &
Services
February 1, 2022 Page 5
cc: Era Anagnosti, Esq.
FirstName LastName