Company: SKLZ
Filing Date: 2025-12-11
Form Type: 10-Q
Source: 0001801661-25-000072
Chunk: 63

Company: Skillz Inc.
Filing Date: 2025-12-11
Form: 10-Q
Item: Item 1
Chunk 63
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.0 thousand in the nine months ended September 30, 2024. This was primarily due to a book loss, state taxes and equity award activities, mostly offset by a full valuation allowance on our deferred tax assets.

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA” or the “Act”) was signed into law, enacting significant changes to U.S. federal tax regulations. In accordance with Accounting Standards Codification 740 (“ASC 740”), Income Taxes, the effects of new tax legislation are required to be recognized in the period of enactment, which for the Company, is the quarter ended September 30, 2025. The total net impact of the tax law changes on the income tax provision for the three and nine months ended September 30, 2025, was not material. A discrete adjustment of approximately $866 thousand was made to the existing deferred tax assets and deferred tax liability that were fully offset by an adjustment to the valuation allowance on our deferred tax assets. OBBBA adjustments impacting these deferred balances relate to the restoration of bonus depreciation for qualifying assets and the inclusion of 174A which allows taxpayers to fully expense domestic research expenditures.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily from the sales of capital stock. As of September 30, 2025, our principal sources of liquidity were our cash, cash equivalents and restricted cash in the amount of $212.8 million, which are primarily invested in money market funds and marketable securities with maturities of less than three months. 

In December 2021, the Company offered $300 million in aggregate principal senior secured notes due 2026 in a private offering. The notes were sold in a private placement to qualified institutional buyers. Annual interest started to accrue from December 20, 2021 at a stated rate of 10.25% and is payable semiannually on June 15 and December 15 of each year, beginning on June 15, 2022. The notes will mature on December 15, 2026. We used the net proceeds from the offering for general corporate purposes. The notes contain customary covenants restricting our and certain of our subsidiaries’ ability to incur debt, incur liens, make distributions to holders of our stock, make certain transactions with our affiliates, as well as certain financial covenants specified in the indentures. After giving effect to the 2023 and other previous open market repurchases of