Firy Inc 10-K/A for FY2020

Firy Inc. (FIRY)

10-K/A 2021-05-13 For: 2020-12-31

Added on April 08, 2026

About this 10-K/A

Firy Inc filed this 10-K/A on May 13, 2021, covering the fiscal year ended December 31, 2020 (FY2020).

Headline figures

Fiscal year ended December 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $230.12M; up 92.0% from $119.87M a year earlier
Net loss: $145.51M; compared with a net loss of $23.61M a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	SKLZ	New York Stock Exchange
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share	SKLZ.WS	New York Stock Exchange


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


			Page

PART I

Item 1. Business			6
Item 1A. Risk Factors			14
Item 1B. Unresolved Staff Comments			40
Item 2. Properties			40
Item 3. Legal Proceedings			40
Item 4. Mine Safety Disclosures			40

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			41
Item 6. Selected Financial Data			42
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			42
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			55
Item 8. Financial Statements and Supplementary Data			57
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures			94
Item 9A. Evaluation of Disclosure Controls and Procedures			94
Item 9B. Other Information			95

PART III

Item 10. Directors, Executive Officers and Corporate Governance			96
Item 11. Executive Compensation			96
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			96
Item 13. Certain Relationships and Related Transactions, and Director Independence			96
Item 14. Principal Accountant Fees and Services			96

PART IV

Item 15. Exhibits and Financial Statement Schedules.			97
Item 16. Form 10-K Summary			98
Signatures			99


	Year Ended December 31,
	2020		2019		2018
	(Restated)
	(in thousands, except share and per share data)
Revenue	$	230,115	$	119,872	$	50,778
Costs and expenses:
Cost of revenue	12,281		5,713		2,112
Research and development	23,225		11,241		7,547
Sales and marketing	251,941		111,370		51,689
General and administrative	42,289		16,376		14,975
Total costs and expenses	329,736		144,700		76,323
Loss from operations	(99,621)		(24,828)		(25,545)
Interest expense, net	(1,325)		(2,497)		(2,190)
Change in fair value of common stock warrant liabilities	(23,049)		—		—
Other income (expense), net	(21,400)		3,720		(45)
Loss before income taxes	(145,395)		(23,605)		(27,780)
Provision for income taxes	115		—		—
Net loss	$	(145,510)	$	(23,605)	$	(27,780)
Net loss per share attributable to common stockholders – basic and diluted	$	(0.49)	$	(0.09)	$	(0.12)
Weighted average common shares outstanding – basic and diluted	294,549,146		261,228,108		236,040,717


	Year Ended December 31,						2019 to 2020 % Change		2018 to 2019 % Change
(In thousands, except percentages)	2020		2019		2018

Revenue	$	230,115	$	119,872	$	50,778	92	%	136	%


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years

Operating lease obligations	$	26,141	$	4,528	$	4,866	$	4,952	$	11,795


			Page

Report of Independent Registered Public Accounting Firm			58
Consolidated Financial Statements
Consolidated Balance Sheets			59
Consolidated Statements of Operations			60
Consolidated Statements of Stockholders’ Equity (Deficit)			61
Consolidated Statements of Cash Flows			63
Notes to the Consolidated Financial Statements			64


/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2018.

Redwood City, California

March 12, 2021

except for Note 3, as to which the date is

May 13, 2021


	December 31,
	2020		2019
	(Restated)
Assets
Current assets:
Cash and cash equivalents	$	262,728	$	25,628
Prepaid expenses and other current assets	10,491		9,464
Total current assets	273,219		35,092
Property and equipment, net	5,292		3,648
Other long-term assets	3,910		116
Total assets	$	282,421	$	38,856
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	22,039	$	2,944
Accrued professional fees	5,699		—
Other current liabilities	19,618		7,537
Total current liabilities	47,356		10,481
Common stock warrant liabilities	178,232		—
Long-term debt, non-current	—		9,628
Other long-term liabilities	46		82
Total liabilities	225,634		20,191
Commitments and contingencies (Note 8)
Stockholders’ equity:(1)
Preferred stock $0.0001 par value; 10 million shares authorized — 0 issued and outstanding as of December 31, 2020 and 2019	—		—
Common stock $0.0001 par value; 625 million shares authorized; Class A common stock – 500 million shares authorized; 292 million and 212 million shares issued and outstanding as of December 31, 2020 and 2019, respectively; Class B common stock – 125 million shares authorized; 78 million and 74 million shares issued and outstanding as of December 31, 2020 and 2019, respectively	37		29
Additional paid-in capital	295,065		108,892
Accumulated deficit	(238,315)		(90,256)
Total stockholders’ equity	56,787		18,665
Total liabilities and stockholders’ equity	$	282,421	$	38,856


	Redeemable convertible preferred stock		Preferred stock			Common stock		Additional paid-in capital	Accumulated deficit	Total stockholders’ equity (deficit)
	Shares	Amount	Shares	Amount		Shares	Amount
Balance at December 31, 2017	4,404,840	$17,040	13,621,802	$	25,560	126,464,480	$1	$36	$(38,871)	$(13,274)
Retroactive application of recapitalization	(4,404,840)	(17,040)	(13,621,802)	(25,560)		102,694,176	22	42,578	—	17,040
Balance at December 31, 2017, after effect of reverse recapitalization (Note 4)	—	—	—	—		229,158,656	23	42,614	(38,871)	3,766
Issuance of Old Skillz redeemable convertible Series D preferred stock	—	—	—	—		16,705,320	2	18,216	—	18,218
Issuance of Old Skillz common stock upon exercise of stock options	—	—	—	—		4,036,200	—	192	—	192
Stock-based compensation	—	—	—	—		—	—	6,680	—	6,680
Net loss	—	—	—	—		—	—	—	(27,780)	(27,780)
Balance at December 31, 2018	—	—	—	—		249,900,176	25	67,702	(66,651)	1,076
Issuance of Old Skillz redeemable convertible Series D and Series D-1 preferred stock	—	—	—	—		23,718,385	3	39,757	—	39,760
Issuance of Old Skillz common stock upon exercise of stock options	—	—	—	—		3,485,844	—	197	—	197
Issuance of Old Skillz common stock upon early exercise of stock options with promissory note	—	—	—	—		8,970,518	1	(1)	—	—
Stock-based compensation	—	—	—	—		—	—	1,237	—	1,237
Net loss	—	—	—	—		—	—	—	(23,605)	(23,605)
Balance at December 31, 2019	—	—	—	—		286,074,923	29	108,892	(90,256)	18,665
Issuance of Old Skillz redeemable convertible Series E preferred stock	—	—	—	—		17,834,808	2	98,303	—	98,305
Issuance of Old Skillz common stock upon exercise of stock options	—	—	—	—		7,642,110	1	1,242	—	1,243
Conversion of Old Skillz preferred stock warrants	—	—	—	—		—	—	654	—	654

Issuance of Old Skillz common stock upon early exercise of stock options with promissory note	—	—	—	—		12,700,358	1	(1)	—	—
Surrender of Old Skillz common stock upon net settlement of promissory notes	—	—	—	—		(1,037,535)	—	—	—	—
Taxes paid related to net share settlement of Old Skillz equity awards	—	—	—	—		(1,102,746)	—	(13,404)	—	(13,404)


Issuance of Old Skillz convertible Series A, Series A-1 and Series B preferred stock upon exercise of warrants	—	—	—	—	2,860,974	1	1	—	2
Issuance of Old Skillz common stock upon exercise of warrants	—	—	—	—	726,063	—	382	—	382
Repurchase of Old Skillz common stock	—	—	—	—	(468,270)	—	—	(1,339)	(1,339)
Repurchase of Old Skillz preferred stock	—	—	—	—	(13,739)	(1)	—	(1,210)	(1,211)
Net Business Combination and PIPE financing (Restated)	—	—	—	—	44,580,578	4	75,239	—	75,243
Stock-based compensation	—	—	—	—	—	—	23,757	—	23,757
Net loss (Restated)	—	—	—	—	—	—	—	(145,510)	(145,510)
Balance at December 31, 2020 (Restated)	—	$—	—	$—	369,797,524	$37	$295,065	$(238,315)	$56,787


Property and Equipment						Useful Life
Computer equipment and servers						3 years
Capitalized internal-use software						3 years
Office equipment and other						5 years
Leased equipment and leasehold improvements						Lesser of estimated useful life or remaining lease term


	As of December 31, 2020
	As Previously Reported		Restatement Adjustment			As Restated
Consolidated Balance Sheet	(In Thousands, Except for Number of Shares and Par Value Per Share Amounts)

Assets
Total current assets	$	273,219	$	—		$	273,219
Total assets	282,421		—			282,421
Liabilities and stockholders’ equity

Total current liabilities	47,356		—			47,356
Common stock warrant liabilities (1)	—		178,232			178,232
Total liabilities	47,402		178,232			225,634
Stockholders’ equity:(1)
Preferred stock $0.0001 par value; 10 million shares authorized — 0 issued and outstanding as of December 31, 2020 and 2019	—		—			—
Common stock $0.0001 par value; 625 million shares authorized; Class A common stock – 500 million shares authorized; 292 million and 212 million shares issued and outstanding as of December 31, 2020 and 2019, respectively; Class B common stock – 125 million shares authorized; 78 million and 74 million shares issued and outstanding as of December 31, 2020 and 2019, respectively	37		—			37
Additional paid-in capital	450,248		(155,183)		(1)	295,065
Accumulated deficit	(215,266)		(23,049)		(2)	(238,315)
Total stockholders’ equity	235,019		(178,232)			56,787
Total liabilities and stockholders’ equity	$	282,421	$	—		$	282,421


	Year Ended December 31,
	2020		2019		2018
Net cash used in operating activities	$	(56,232)	$	(21,937)	$	(16,948)
Net cash used in investing activities	$	(3,246)	$	(3,223)	$	(867)
Net cash provided by financing activities	$	296,578	$	31,168	$	33,330


	For the Year Ended December 31, 2020
	As Previously Reported		Restatement Adjustment			As Restated
Consolidated Statement of Operations	(In Thousands, Except for Number of Shares and Per Share Amounts)

Revenue	$	230,115	$	—		$	230,115
Total cost and expenses	$	329,736	$	—		$	329,736
Loss from operations	$	(99,621)	$	—		$	(99,621)
Change in fair value of common stock warrant liabilities	$	—	$	(23,049)	(2)	$	(23,049)
Loss before income taxes	$	(122,346)	$	(23,049)		$	(145,395)
Provision for income taxes	$	115	$	—		$	115
Net loss	$	(122,461)	$	(23,049)		$	(145,510)
Basic and diluted net loss per share	$	(0.42)	$	(0.07)		$	(0.49)
Basic and diluted weighted-average common shares outstanding	294,549,146		—			294,549,146


	Recapitalization
Cash - FEAC trust and cash, net of redemptions	$	689,979
Cash - Private Placement Financing	158,531
Non-cash net assets assumed from FEAC	—
Less: cash consideration paid to Old Skillz stockholders	(566,204)
Less: transaction costs and advisory fees incurred by FEAC	(35,822)
Net cash contributions from Business Combination and PIPE Financing	246,484
Less: non-cash fair value of Public and Private Common Stock Warrants (Restated)(1)	(155,183)
Less: non-cash net assets assumed from FEAC	—
Less: accrued transaction costs and advisor fees incurred by Skillz	(16,058)
Net Business Combination and PIPE financing (Restated)	$	75,243


						Recapitalization
Common stock, outstanding prior to Business Combination						69,000,000
Less: redemption of FEAC shares						(2,140)
Common stock of FEAC						68,997,860
FEAC sponsor shares						6,350,200
Earnout shares						10,000,000
Shares issued in Private Placement Financing						15,853,052
Business Combination and Private Placement Financing shares - Class A common stock						101,201,112
Old Skillz shares converted to New Skillz Class A common stock(1)						191,932,861
Old Skillz shares converted to New Skillz Class B common stock(2)						76,663,551
Total shares of common stock immediately after Business Combination						369,797,524


	Series E forward contract liability
Fair value as of December 31, 2019	$	—
Issuance of the Redeemable convertible Series E preferred stock forward contract liability	—
Change in fair value	21,688
Settlement of the Redeemable convertible Series E preferred stock forward contract liability	(21,688)
Fair value as of December 31, 2020	$	—


	Fair Value Measured as of December 31, 2020
Liabilities included in:	Level 1		Level 2		Level 3		Total
Public common stock warrants (Restated)	$	124,545	$	—	$	—	$	124,545
Private common stock warrants (Restated)	—		—		53,687		53,687
Total fair value (Restated)	$	124,545	$	—	$	53,687	$	178,232


	Operating Lease Commitments
Year ended December 31,
2021	$	4,528
2022	2,498
2023	2,368
2024	2,439
2025	2,513
Thereafter	11,795
Future minimum lease payments	$	26,141


		Options Outstanding						Restricted Stock Units
	Number of Shares Available for Issuance Under the Plan	Number of Shares Outstanding Under the Plan	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value		Number of Plan shares outstanding	Weighted-Average Grant Date Fair Value per share
Balance at December 31, 2019	3,855,385	38,794,307	$	0.14	7.67	$	13,056
Recapitalization Impact	(975,027)	(9,811,081)	0.05
Balance at December 31, 2019	2,880,358	28,983,226	$	0.19	7.67	$	13,056	—	$	—
Additional shares authorized	62,903,028
Options and restricted stock units granted	(36,074,010)	35,732,754	6.70					341,256	17.68
Options exercised(1) and restricted stock units released	—	(20,138,817)	0.78					—	—
Options and restricted stock units canceled	5,791,227	(6,172,670)	0.51					—	—
Balance at December 31, 2020	35,500,603	38,404,493	$	5.89	8.27	$	542,074	341,256	$	17.68

Exercisable at December 31, 2019		15,225,162	$	0.08	6.85	$	8,492
Exercisable at December 31, 2020		14,248,234	$	0.18	6.45	$	282,364
Unvested at December 31, 2019		13,758,064	$	0.31	8.58	$	4,564
Unvested at December 31, 2020		24,156,259	$	9.25	9.34	$	259,710


	Number of Securities Outstanding at December 31,
	2020	2019	2018
Convertible promissory notes	—	—	12,099,120
Common and preferred stock warrants	22,314,778	3,635,180	3,087,307
Common stock options	51,735,883	37,206,199	30,911,188
Restricted stock units	341,256	—	—
Earnout shares	10,000,000	—	—
Total	84,391,917	40,841,379	46,097,615


			SKILLZ INC.

			By:			/s/ Andrew Paradise
			Name:			Andrew Paradise
			Title:			Chief Executive Officer and Chairman
			Date:			May 13, 2021


Name of Subsidiary	Country (State)	Percent Ownership
Skillz Platform Inc.	Delaware	100%


			1.			I have reviewed this Annual Report on Form 10-K/A of Skillz Inc.;


			2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


			3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


			4.			The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			a.			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b.			[omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];


			c.			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d.			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


			a.			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


			b.			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.