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United States securities and exchange commission logo
January 24, 2022
Heidy Chow
Chief Financial Officer
Snail, Inc.
12049 Jefferson Blvd
Culver City, CA 90230
Re: Snail, Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted January
3, 2022
CIK No. 0001886894
Dear Ms. Chow:
We have reviewed your amended draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments. Unless otherwise noted, where prior comments are referred to
they refer to our letter
dated December 2, 2021.
Amendment No. 1 to Draft Registration Statement on Form S-1
Presentation of Financial and Other Information, page iii
1. Your discussion of
non-GAAP measures on page iii appears to place undue prominence
on non-GAAP measures.
As this disclosure is already included elsewhere in the filing,
please consider
removing the discussion on page iii. Refer to Rule 421(d) of Regulation C
and Question 102.10 of
the Non-GAAP Compliance and Disclosure Interpretations.
Heidy Chow
FirstName
Snail, Inc. LastNameHeidy Chow
Comapany
January 24,NameSnail,
2022 Inc.
January
Page 2 24, 2022 Page 2
FirstName LastName
Prospectus Summary, page 1
2. We note that you disclose over 48.9 million installs of the Ark:
Survival
Evolved franchise through June 2021. Please clarify whether any of
these downloads
were part of a free promotion.
Financial Statements
Research and Development, page F-11
3. We note your response to comment 19. Please address Studio Wildcard's
current development of ARK 2 games. Explain how ARK 2 games' research
and
development projects have been and will be funded. Describe for us any
research and
development contracts, arrangements and understandings with related
parties such as
Studio Wildcard and SDE, Inc. Tell us the extent to which Snail and/or
Snail's related
parties directly or indirectly provide such funding.
Note 5 - Accounts Receivable - Related Party, page F-18
4. We have considered your response to comment 20 and note that your
gaming revenues
held by SDE appear to have historically been a significant component
of your current
assets, working capital deficit and cash flows from operations. Tell
us and disclose here
and also in Management's Discussion and Analysis whether you plan to
continue the
practice of allowing your related party, SDE, to collect and hold cash
flows from your
gaming revenues after the offering. In this regard, address the
expected impact of the
future retention of your gaming revenue cash flows on your liquidity
and capital
resources. Address any material risk and uncertainties regarding the
ultimate remission of
such funds by SDE to you. See Item 303(b)(1)(i) of Regulation S-K.
Intangible Assets, page F-19
5. We note in your response to comment 21 that you determined the
carrying values of your
intangible assets acquired from related parties based on the projected
cash flow generated
from the gaming revenue, quoted market values and third-party
independent appraisals.
Please provide us an analysis that, for each intangible asset acquired
from a related party,
indicates:
the related party and describes the nature of the relationship;
if they were under common control with Snail and/or SDE or their
principal owners
and or officers; and
the related party's historical cost basis in the asset.
Also, tell us your consideration of whether or not such assets should
be reported based
upon the related party's cost basis.
Heidy Chow
FirstName
Snail, Inc. LastNameHeidy Chow
Comapany
January 24,NameSnail,
2022 Inc.
January
Page 3 24, 2022 Page 3
FirstName LastName
You may contact Joseph Kempf, Senior Staff Accountant, at (202)
551-3352 or Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Patrick Faller, Staff
Attorney, at (202) 551-4438 or Jeff Kauten, Staff Attorney, at (202) 551-3447
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Byron Rooney