Firy Inc 10-Q for FY2021 Q3

Firy Inc. (FIRY)

10-Q 2021-11-09 For: 2021-09-30

Added on April 08, 2026

About this 10-Q

Firy Inc filed this 10-Q on November 9, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $102.07M; up 70.2% from $59.96M a year earlier
Net income: $50.78M; compared with a net loss of $42.85M a year earlier
Diluted EPS: -$0.16; compared with -$0.14 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


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


			Page

Note Regarding Forward Looking Statements

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 3. Quantitative and Qualitative Disclosures About Market Risk			40
Item 4. Controls and Procedures			41

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			42
Item 1A. Risk Factors			42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			42
Item 3. Defaults Upon Senior Securities			42
Item 4. Mine Safety Disclosures			42
Item 5. Other Information			42
Item 6. Exhibits			43
Signatures			44


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	540,308	$	262,728
Accounts receivable, net	12,725		—
Prepaid expenses and other current assets	17,309		10,491
Total current assets	570,342		273,219
Property and equipment, net	10,852		5,292
Investments in non-marketable equity securities	55,628		—
Intangible assets, net	83,241		—
Goodwill	87,230		—
Other long-term assets	3,839		3,910
Total assets	$	811,132	$	282,421
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	10,047	$	22,039
Accrued professional fees	—		5,699
Other current liabilities	70,157		19,618
Total current liabilities	80,204		47,356

Long-term common stock warrant liabilities	12,318		178,232
Other long-term liabilities	14,274		46
Total liabilities	106,796		225,634
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock $0.0001 par value; 10 million shares authorized — 0 issued and outstanding as of September 30, 2021 and December 31, 2020	—		—
Common stock $0.0001 par value; 625 million shares authorized; Class A common stock – 500 million shares authorized; 339 million and 292 million shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; Class B common stock – 125 million shares authorized; 69 million and 78 million shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	40		37
Additional paid-in capital	1,025,017		295,065

Accumulated deficit	(320,721)		(238,315)
Total stockholders’ equity	704,336		56,787
Total liabilities and stockholders’ equity	$	811,132	$	282,421


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	102,072	$	59,955	$	275,240	$	162,392
Costs and expenses:
Cost of revenue	7,647		3,102		16,289		8,806
Research and development	13,162		4,369		30,584		13,253
Sales and marketing	114,531		73,187		310,377		172,381
General and administrative	48,376		7,861		101,092		24,336
Total costs and expenses	183,716		88,519		458,342		218,776
Loss from operations	(81,644)		(28,564)		(183,102)		(56,384)
Interest expense, net	(87)		(24)		(136)		(1,297)
Change in fair value of common stock warrant liabilities	113,601		—		81,898		—
Other income (expense), net	(22)		(14,216)		108		(20,749)
Income (loss) before income taxes	31,848		(42,804)		(101,232)		(78,430)
(Benefit) provision for income taxes	(18,933)		47		(18,826)		100
Net income (loss)	$	50,781	$	(42,851)	$	(82,406)	$	(78,530)



Net income (loss) per share attributable to common stockholders – basic	$	0.13	$	(0.14)	$	(0.22)	$	(0.27)
Weighted average common shares outstanding – basic	395,053,445		298,713,456		379,450,553		288,958,713






Net loss attributable to common stockholders – diluted	$	(62,820)	$	(42,851)	$	(164,304)	$	(78,530)
Net loss per share attributable to common stockholders – diluted	$	(0.16)	$	(0.14)	$	(0.43)	$	(0.27)
Weighted average common shares outstanding – diluted	396,030,131		298,713,456		385,451,806		288,958,713


☒			QUARTERLY 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


	Preferred stock			Common stock			Additional paid-in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	—	$	—	286,074,923	$	29	$	108,892	$	(90,256)	$	18,665
Issuance of common stock upon exercise of stock options	—	—		829,348	—		241		—		241
Stock-based compensation	—	—		—	—		357		—		357
Net loss	—	—		—	—		—		(15,522)		(15,522)
Balance at March 31, 2020	—	—		286,904,271	29		109,490		(105,778)		3,741
Issuance of redeemable convertible Series E preferred stock	—	—		15,091,869	2		64,877		—		64,879
Issuance of common stock upon exercise of stock options	—	—		1,029,833	—		130		—		130
Issuance of common stock upon exercise of stock options with promissory note	—	—		12,700,357	1		—		—		1
Repurchase of common stock	—	—		(270,599)	—		—		(543)		(543)
Stock-based compensation	—	—		—	—		5,546		—		5,546
Net loss	—	—		—	—		—		(20,157)		(20,157)
Balance at June 30, 2020	—	—		315,455,731	32		180,043		(126,478)		53,597
Issuance of redeemable convertible Series E preferred stock	—	—		2,739,398	—		33,428		—		33,428
Issuance of common stock upon exercise of stock options	—	—		2,102,672	—		302		—		302
Issuance of common stock upon exercise of stock options with promissory note	—	—		—	—		—		—		—
Repurchase of common stock	—	—		(186,775)	—		—		(695)		(695)
Repurchase of preferred stock	—	—		(296,733)	—		—		(1,211)		(1,211)
Stock-based compensation	—	—		—	—		3,662		—		3,662
Net loss	—	—		—	—		—		(42,851)		(42,851)
Balance at September 30, 2020	—	$	—	319,814,293	$	32	$	217,435	$	(171,235)	$	46,232

Balance at December 31, 2020	—	$	—	369,797,524	$	37	$	295,065	$	(238,315)	$	56,787
Issuance of common stock upon exercise of stock options	—	—		268,426	—		12		—		12
Issuance of common stock upon exercise of warrants and other, net	—	—		8,741,863	—		172,519		—		172,519
Net cash contributions from follow-on offering	—	—		17,000,000	2		402,238		—		402,240
Stock-based compensation	—	—		—	—		10,945		—		10,945
Net loss	—	—		—	—		—		(53,592)		(53,592)
Balance at March 31, 2021	—	—		395,807,813	39		880,779		(291,907)		588,911
Issuance of common stock upon exercise of stock options	—	—		235,054	—		97		—		97
Issuance of common stock upon exercise of warrants and other, net	—	—		628,576	—		9,625		—		9,625
Stock-based compensation	—	—		—	—		15,774		—		15,774
Net loss	—	—		—	—		—		(79,595)		(79,595)
Balance at June 30, 2021	—	—		396,671,443	39		906,275		(371,502)		534,812
Issuance of common stock upon exercise of stock options	—	—		4,393,149	—		3,056		—		3,056
Issuance of common stock upon exercise of warrants and other, net	—	—		2,236,383	1		32,967		—		32,968
Issuance of common stock for business combination	—	—		4,401,633	—		66,907		—		66,907

Stock-based compensation	—	—		—	—		15,812		—		15,812
Net income	—	—		—	—		—		50,781		50,781
Balance at September 30, 2021	—	$	—	407,702,608	$	40	$	1,025,017	$	(320,721)	$	704,336


Description	Amount
Cash	$	95,296
Common stock issued (1)	67,051
Total purchase price	$	162,347


Type	Weighted-average useful life (in years)	Fair Value
Developed technology	8	$	60,400
Customer relationships	3	26,200
Trademark and trade name	0.3	200
Total identifiable intangible assets acquired		$	86,800


	Weighted Average Remaining Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	7.79	$	60,400	$	(1,573)	$	58,827
Customer relationships	2.79	26,200		(1,819)		24,381
Trademark and trade name	0.04	200		(167)		33
Intangible assets, net		$	86,800	$	(3,559)	$	83,241


	Nine Months Ended September 30,
	2021
Beginning balance at December 31, 2020	$	—
Additions	86,800
Amortization	(3,559)
Ending balance at September 30, 2021	$	83,241


	Three and Nine Months Ended September 30,
	2021
Cost of revenue	$	1,573
Sales and marketing	1,819
General and administrative	167
Total amortization expense	$	3,559


	Amount
2021	$	4,104
2022	16,283
2023	16,283
2024	12,281
2025	7,550
Thereafter	26,740
Total	$	83,241


	Goodwill
Balance at December 31, 2020	$	—
Goodwill acquired	87,230
Balance as of September 30, 2021	$	87,230


	September 30,		December 31,
	2021		2020
Capitalized internal-use software	$	6,569	$	6,167
Computer equipment and servers	5,416		631
Furniture and fixtures	360		184
Leasehold improvements	114		114
Construction in progress	2,877		1,037
Total property and equipment	15,336		8,133
Accumulated depreciation and amortization	(4,484)		(2,841)
Property and equipment, net	$	10,852	$	5,292


		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, 2020	35,500,603	38,404,493	$	5.89	8.27	$	542,074	341,256	$	17.68
Options and restricted stock units granted	(3,743,376)	64,839	12.58					3,678,537	20.28
Options exercised and restricted stock units released	—	(4,896,629)	0.65					(20,303)	17.48
Options and restricted stock units canceled	4,039,561	(3,390,960)	1.22					(648,601)	22.46
Balance at September 30, 2021	35,796,788	30,181,743	$	7.24	7.31	$	172,203	3,350,889	$	19.61

Exercisable at December 31, 2020		14,248,234	$	0.18	6.45	$	282,364
Exercisable at September 30, 2021		13,459,112	0.16		5.37	129,935
Unvested at December 31, 2020		24,156,259	9.25		9.34	259,710
Unvested at September 30, 2021		16,722,631	12.93		8.87	42,268


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021(1)	2020	2021(1)	2020
Expected volatility	48.71%	48.65% - 48.9%	48.71%	47.24% - 48.93%
Risk-free interest rate	0.02%	0.35% - 0.41%	0.02%	0.35% - 1.44%
Expected term (in years)	0.25	6.00 - 6.1	0.25	6.00 - 6.25
Expected dividend yield	—	—	—	—
Weighted average estimated fair value of stock options granted during the period	$15.63	$7.95	$15.63	$2.98


	Fair Value Measurements as of September 30, 2021
Liabilities included in:	Level 1		Level 2		Level 3		Total

Private Common Stock Warrants	—		—		12,318		12,318
Total fair value	$	—	$	—	$	12,318	$	12,318


	Fair Value Measurements as of December 31, 2020
Liabilities included in:	Level 1		Level 2		Level 3		Total
Public Common Stock Warrants	$	124,545	$	—	$	—	$	124,545
Private Common Stock Warrants	—		—		53,687		53,687
Total fair value	$	124,545	$	—	$	53,687	$	178,232


	Number of Securities Outstanding at September 30,
	2021	2020
Common and preferred stock warrants	—	3,635,181
Common stock options	39,273,376	48,670,292
Performance stock units	16,146,630	—
Restricted stock units	3,651,447	—
Total	59,071,453	52,305,473


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	102,072	$	59,955	$	275,240	$	162,392
Costs and expenses:
Cost of revenue	7,647		3,102		16,289		8,806
Research and development	13,162		4,369		30,584		13,253
Sales and marketing	114,531		73,187		310,377		172,381
General and administrative	48,376		7,861		101,092		24,336
Total costs and expenses	183,716		88,519		458,342		218,776
Loss from operations	(81,644)		(28,564)		(183,102)		(56,384)
Interest expense, net	(87)		(24)		(136)		(1,297)
Change in fair value of common stock warrant liabilities	113,601		—		81,898		—
Other income (expense), net	(22)		(14,216)		108		(20,749)
Income (loss) before income taxes	31,848		(42,804)		(101,232)		(78,430)
(Benefit) provision for income taxes	(18,933)		47		(18,826)		100
Net income (loss)	$	50,781	$	(42,851)	$	(82,406)	$	(78,530)



Net income (loss) per common share
Net income (loss) per share attributable to common stockholders – basic and diluted	$	0.13	$	(0.14)	$	(0.22)	$	(0.27)
Weighted average common shares outstanding – basic and diluted	395,053,445		298,713,456		379,450,553		288,958,713
Net loss attributable to common stockholders – diluted	$	(62,820)	$	(42,851)	$	(164,304)	$	(78,530)
Net loss per share attributable to common stockholders – diluted	$	(0.16)	$	(0.14)	$	(0.43)	$	(0.27)
Weighted average common shares outstanding – diluted	396,030,131		298,713,456		385,451,806		288,958,713


	Three Months Ended September 30,				% Change	Nine Months Ended September 30,				% Change
(In thousands, except percentages)	2021		2020					2021				2020

Revenue	$	102,072	$	59,955		70	%	$	275,240	$	162,392		69	%


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

Operating lease obligations	$	22,238	$	625	$	4,867	$	4,952	$	11,794
Capital lease obligations	4,862		2,964		1,898		—		—
Total lease obligations	$	27,100	$	3,589	$	6,765	$	4,952	$	11,794


			SKILLZ INC.

			By:			/s/ Andrew Paradise
			Name:			Andrew Paradise
			Title:			Chief Executive Officer and Chairman


			1.			I have reviewed this Quarterly Report on Form 10-Q 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.


			/s/ Ian Lee
			Ian Lee
			Chief Financial Officer
			(Principal Financial and Accounting Officer)