Company: SKLZ
Filing Date: 2025-11-06
Form Type: 10-K
Source: 0001801661-25-000050
Chunk: 195

Company: Skillz Inc.
Filing Date: 2025-11-06
Form: 10-K
Item: Item 8
Chunk 195
---
 become exercisable as of the date, following the grant date, that the VWAP of the shares equals or exceeds 4.0x the VWAP of the shares as of the Closing Date; and (iii) one-third (1/3) of the options shall vest and become exercisable as of the date, following the grant date, that the VWAP of the shares equals or exceeds 5.0x the VWAP of the shares as of the Closing Date.The $93.4 million grant date fair value of the Founders’ Options was estimated using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. The significant inputs to the valuation included the Class A stock price and the risk-free interest rate as of the grant date, as well as the estimated volatility of the Class A common stock. For the year ended December 31, 2024, the Company recognized $19.5 million in compensation expense related to these grants. As of December 31, 2024, the unrecognized stock-based compensation cost related to the Option Agreements was $14.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.87 years.

15. Income Taxes

The Company has historically generated net operating losses in each of the tax jurisdictions in which it operates and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets.The loss before income taxes for the years ended December 31, 2024 and 2023 consisted of the following: Year Ended December 31,20242023U.S.$(46,711)$(101,393)Non-U.S.(13)272 Total$(46,724)$(101,121)

107

TABLE OF CONTENTSSKILLZ INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Amounts in tables are in thousands, unless otherwise noted)

The provision for income taxes consists of the following:Year Ended December 31,20242023Current:U.S. Federal$(41)$(18)U.S. State50 145 Non-U.S. Foreign57 112 Total Current66 239 Deferred:U.S. Federal— — U.S. State— — Total Deferred— — Provision for income taxes$66 $239 A reconciliation of the Company’s effective tax rate to the