Skillz Inc

Previous wording

Skillz was founded in 2012 by Andrew Paradise and Casey Chafkin with the vision to make eSports accessible to everyone possible. For thesix months ended June 30, 2024, the platform had over 0.8 million monthly active users (“MAUs”) and hosts an average of over 1.7 million daily tournaments, including 0.4 million paid entry daily tournaments, offering over $43.7 million in prizes each month.

Current wording

Skillz was founded in 2012 by Andrew Paradise and Casey Chafkin with the vision to make eSports accessible to everyone possible. For thenine months ended September 30, 2024, the platform had over 0.8 million monthly active users (“MAUs”) and hosts an average of over 1.1 million daily tournaments, including 0.4 million paid entry daily tournaments, offering over $43.5 million in prizes each month.

Previous wording

Historically, our top games and related developers have accounted for a substantial portion of our revenue earned from the Skillz platform. For the three months ended June 30, 2024 and 2023, Tether and Big Run accounted for 81% and 80% of our revenue, respectively. For the six months ended June 30, 2024 and 2023, Tether and Big Run accounted for 80% of our revenue in each year. Our top titles rotate over time as more games generate success on the Skillz platform.

Current wording

Historically, our top games and related developers have accounted for a substantial portion of our revenue earned from the Skillz platform. For the three months ended September 30, 2024 and 2023, The top two developers accounted for 81% of our revenue each year. For the nine months ended September 30, 2024 and 2023, the top two developers accounted for 80% of our revenue in each year. We expect that our top titles will rotate over time as more games generate success on the Skillz platform.

Previous wording

The following supplemental financial information table summarizes key operating metrics for the three and six months ended June 30, 2024 and 2023. These metrics are utilized by management and the Board to evaluate the operating performance of the Company and are key factors that directly impact the Company’s revenue, costs and liquidity. Accordingly, we believe that they provide helpful supplemental information to investors in evaluating our operating results.

Current wording

The following supplemental financial information table summarizes key operating metrics for the three and nine months ended September 30, 2024 and 2023. These metrics are utilized by management and the Board to evaluate the operating performance of the Company and are key factors that directly impact the Company’s revenue, costs and liquidity. Accordingly, we believe that they provide helpful supplemental information to investors in evaluating our operating results.

Previous wording

The following table summarizes additional components of GMV, including average GMV per active user and average GMV per paying active user for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes additional components of GMV, including average GMV per active user and average GMV per paying active user for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Prizes include cash, Bonus Cash, physical merc handise and items spon sored by third-parties. Prizes for the three and six months ended June 30, 2024 consisted of approximately 16% Cash, 84% Bonus Cash, 15% Cash, and 85% Bonus Cash. Prizes for the three and six months ended June 30, 2023, consisted of approximately 8% Cash, 92% Bonus Cash, 8% Cash, and 92% Bonus Cash. Physical merchandise and items sponsored by third-parties were de minimis for the periods presented.

Current wording

Prizes include cash, Bonus Cash, physical merc handise and items spon sored by third-parties. Prizes for the three and nine months ended September 30, 2024 consisted of approximately 17% Cash, 83% Bonus Cash, 16% Cash, and 84% Bonus Cash. Prizes for the three and nine months ended September 30, 2023, consisted of approximately 9% Cash, 91% Bonus Cash, 8% Cash, and 92% Bonus Cash. Physical merchandise and items sponsored by third-parties were de minimis for the periods presented.

Previous wording

•Our unit economics — Our proprietary and highly scalable software platform produces revenue at a low direct cost (i.e. direct software and server costs), contributing to our gross margins. Once acquired, each user cohort contributes to revenue over its life such that at three months, approximately 20% of users in a cohort continue to be paying users and the balance of PMAUs have churned. Thereafter, our retention curve continues to flatten with a limited portion of users continuing to contribute to revenue in each cohort for subsequent years. A cohort is all the users acquired in the period presented. A user is considered part of a cohort based on the first time they make a deposit and enter a paid tournament. Once a user is considered part of a cohort, they are always counted in that cohort.

Current wording

•Our unit economics — Our proprietary and highly scalable software platform produces revenue at a low direct cost (i.e. direct software and server costs), contributing to our gross margins. Once acquired, each user cohort contributes to revenue over its life. A cohort is all the users acquired in the period presented. A user is considered part of a cohort based on the first time they make a deposit and enter a paid tournament. Once a user is considered part of a cohort, they are always counted in that cohort.

Previous wording

General and administrative expenses consist of personnel-related expenses for our corporate, executive, finance, human resources and other administrative functions, expenses for outside professional services, and an allocation for rent, maintenance and utilities costs which are allocated according to headcount. Personnel related expenses consist of salaries, benefits, and stock-based compensation. General and administrative expenses also include expenses related to a loss contingency accrual (for pending legal matters).

Current wording

General and administrative expenses consist of personnel-related expenses for our corporate, executive, legal, finance, human resources and other administrative functions, expenses for outside professional services, and an allocation for rent, maintenance and utilities costs which are allocated according to headcount. Personnel related expenses consist of salaries, benefits, and stock-based compensation. General and administrative expenses also include expenses related to a loss contingency accrual (for pending legal matters).

Previous wording

Revenue decreased by $14.9 million, or 37%, to $25.3 million in the three months ended June 30, 2024 from $40.2 million in the three months ended June 30, 2023. The decrease was primarily driven by a decrease in the Company’s player base as our monthly active users decreased 24% from 2023. This decrease reflects the decrease of our UA marketing and engagement marketing spend by 47% and 38%, respectively. The reduction in user acquisition and engagement marketing spend was driven to prioritize probability over revenue growth. The Company has continued to intentionally reduce spend in order to achieve better user acquisition efficiency and eliminate lower-return engagement marketing programs.

Current wording

Revenue decreased by $11.9 million, or 33%, to $24.6 million in the three months ended September 30, 2024 from $36.4 million in the three months ended September 30, 2023. The decrease was primarily driven by a decrease in the Company’s player base as our monthly active users decreased 19% from 2023. This decrease reflects the decrease of our UA marketing and engagement marketing spend by 43% and 40%, respectively. The reduction in user acquisition and engagement marketing spend was driven to prioritize profitability over revenue growth. The Company has continued to intentionally reduce spend in order to achieve better user acquisition efficiency and eliminate lower-return engagement marketing programs.

Previous wording

Cost of revenue decreased by $0.3 million, or 8%, to $3.3 million for the three months ended June 30, 2024 from $3.7 million in the three months ended June 30, 2023. The decrease in cost of revenue was primarily driven by a reduction in payment processing and customer support personnel costs.

Current wording

Cost of revenue decreased by $0.3 million, or 9%, to $3.4 million for the three months ended September 30, 2024 from $3.7 million in the three months ended September 30, 2023. The decrease in cost of revenue was primarily driven by a reduction in payment processing and customer support personnel costs.

Previous wording

Research and development costs decreased by $3.8 million, or 47%, to $4.3 million in the three months ended June 30, 2024 from $8.0 million in the three months ended June 30, 2023. This was primarily driven by a$3.9 million reduction in employee related costs such as salaries and bonuses as a result of lower headcount. Additionally, software expense decreased by $0.2 million and professional fees increased by $0.8 million.

Current wording

Research and development costs decreased by $3.1 million, or 40%, to $4.7 million in the three months ended September 30, 2024 from $7.9 million in the three months ended September 30, 2023. This was primarily driven by a$2.3 million reduction in employee related costs such as salaries and bonuses as a result of lower headcount. Additionally, software expense decreased by $0.1 million and professional fees increased by $0.5 million.

Previous wording

Sales and marketing costs decreased by $11.8 million, or 36%, to $20.8 million in the three months ended June 30, 2024 from $32.7 million in the three months ended June 30, 2023. This was primarily driven by 47% and 38% decreases in UA and engagement marketing spend, respectively. This intentional decrease was driven by the strategic decision to prioritize profitability over revenue growth. UA marketing and engagement marketing decreased by $3.7 million and $6.6 million, respectively. Additionally, employee related costs decreased by $1.2 million as a result of lower headcount.

Current wording

Sales and marketing costs decreased by $12.6 million, or 40%, to $19.3 million in the three months ended September 30, 2024 from $31.9 million in the three months ended September 30, 2023. This was primarily driven by 43% and 40% decreases in UA and engagement marketing spend, respectively. This intentional decrease was driven by the strategic decision to prioritize profitability over revenue growth. UA marketing and engagement marketing decreased by $3.2 million and $6.7 million, respectively. Additionally, employee related costs decreased by $1.9 million as a result of lower headcount.

Previous wording

General and administrative costs decreased by $8.8 million, or 34%, to $17.2 million in the three months ended June 30, 2024 from $26.1 million in the three months ended June 30, 2023. This was primarily driven by a $5.1 million decrease in legal fees as the Company is no longer actively in litigation with AviaGames and reached a settlement in the second quarter of 2024. Additionally, temporary staffing decreased by $2.2 million as we continue to reduce our reliance on contractors. Employee related costs decreased $2.1 million related to equity forfeitures from the resignation of our General Counsel and President and CFO in 2024.

Current wording

General and administrative costs decreased by $6.2 million, or 26%, to $18.1 million in the three months ended September 30, 2024 from $24.4 million in the three months ended September 30, 2023. This was primarily driven by a $3.5 million decrease in legal fees as the Company is no longer actively in litigation with AviaGames and reached a settlement in the second quarter of 2024. Additionally, temporary staffing decreased by $1.1 million as we continue to reduce our reliance on contractors. Employee related costs decreased $4.0 million related to equity forfeitures from the resignation of our General Counsel and President and CFO in 2024.

Previous wording

Interest income was $0.3 million for the three months ended June 30, 2024 compared to interest expense of $1.7 million for the three months ended June 30, 2023. The decrease of $2.0 million in interest expense was primarily driven by the repurchase of debt in the second quarter of 2023.

Current wording

Interest income was $0.2 million for the three months ended September 30, 2024 compared to interest expense of $2.3 million for the three months ended September 30, 2023. The decrease of $2.5 million in interest expense was primarily driven by the repurchase of debt in the second quarter of 2023.

Previous wording

Provision for income taxes decreased by $72.0 thousand to $111.0 thousand in the six months ended June 30, 2024, from $183.0 thousand in the six months ended June 30, 2023. The decrease was primarily driven by change in need for valuation allowance, decrease in foreign activities, and reduced expected state tax liabilities.

Current wording

Provision for income taxes increased by $23.0 thousand to $32.0 thousand in the three months ended September 30, 2024, from $9.0 thousand in the three months ended September 30, 2023. The decrease was primarily driven by change in need for a valuation allowance, a decrease in foreign activities, and a reduction in expected state tax liabilities.

Previous wording

Revenue decreased by $34.0 million, or 40%, to $50.5 million in the six months ended June 30, 2024 from $84.5 million in the six months ended June 30, 2023. The decrease was primarily driven by a decrease in the Company’s player base as our monthly active users decreased 26% from 2023. This decrease reflects the decrease of our UA marketing and engagement marketing spend by 40% and 44%, respectively. The reduction in user acquisition and engagement marketing spend was driven to prioritize probability over revenue growth. The Company has continued to intentionally reduce spend in order to achieve better user acquisition efficiency and eliminate lower-return engagement marketing programs.

Current wording

Revenue decreased by $45.9 million, or 38%, to $75.1 million in the nine months ended September 30, 2024 from $121.0 million in the nine months ended September 30, 2023. The decrease was primarily driven by a decrease in the Company’s player base as our monthly active users decreased 23% from 2023. This decrease reflects the decrease of our UA marketing and engagement marketing spend by 41% and 43%, respectively. The reduction in user acquisition and engagement marketing spend was driven to prioritize profitability over revenue growth. The Company has continued to intentionally reduce spend in order to achieve better user acquisition efficiency and eliminate lower-return engagement marketing programs.

Previous wording

Cost of revenue decreased by $1.4 million, or 17%, to $6.8 million for the six months ended June 30, 2024 from $8.2 million in the six months ended June 30, 2023. The decrease in cost of revenue was primarily driven by a reduction in server costs, payment processing costs, and reductions in customer support personnel costs.

Current wording

Cost of revenue decreased by $1.8 million, or 15%, to $10.2 million for the nine months ended September 30, 2024 from $11.9 million in the nine months ended September 30, 2023. The decrease in cost of revenue was primarily driven by a reduction in server costs, payment processing costs, and reductions in customer support personnel costs.

Previous wording

Research and development costs decreased by $8.0 million, or 47%, to $8.9 million in the six months ended June 30, 2024 from $16.9 million in the six months ended June 30, 2023. The decrease was primarily driven by a$6.6 million reduction in employee related costs such as salaries and bonuses as a result of lower headcount. Additionally, software expense decreased by $0.5 million.

Current wording

Research and development costs decreased by $11.1 million, or 45%, to $13.6 million in the nine months ended September 30, 2024 from $24.8 million in the nine months ended September 30, 2023. The decrease was primarily driven by a$8.9 million reduction in employee related costs such as salaries and bonuses as a result of lower headcount. Additionally, software expense decreased by $0.6 million.

Previous wording

Sales and marketing costs decreased by $25.7 million, or 38%, to $41.8 million in the six months ended June 30, 2024 from $67.6 million in the six months ended June 30, 2023. The decrease was primarily driven by 40% and 44% decreases in UA and engagement marketing spend, respectively. This intentional decrease was driven by the strategic decision to prioritize profitability over revenue growth. UA marketing and engagement marketing decreased by $6.4 million and $15.4 million, respectively. Additionally, employee related costs and professional fees decreased by $2.3 million and $1.1 million, respectively.

Current wording

Sales and marketing costs decreased by $38.4 million, or 39%, to $61.1 million in the nine months ended September 30, 2024 from $99.5 million in the nine months ended September 30, 2023. The decrease was primarily driven by 41% and 43% decreases in UA and engagement marketing spend, respectively. This intentional decrease was driven by the strategic decision to prioritize profitability over revenue growth. UA marketing and engagement marketing decreased by $9.6 million and $22.1 million, respectively. Additionally, employee related costs and professional fees decreased by $4.2 million and $1.6 million, respectively.

Previous wording

General and administrative costs decreased by $13.9 million, or 26%, to $40.3 million in the six months ended June 30, 2024 from $54.1 million in the six months ended June 30, 2023. This was primarily driven by a $2.8 million decrease in legal fees as the Company is no longer actively in litigation with AviaGames and had reached a settlement in the second quarter of 2024. Additionally, temporary staffing and professional fees decreased by $2.6 million and $5.2 million, respectively, as we continue to reduce our reliance on contractors. Employee related costs decreased by $3.8 million related to equity forfeitures from the resignation of our General Counsel and President and CFO in 2024.

Current wording

General and administrative costs decreased by $19.7 million, or 25%, to $58.4 million in the nine months ended September 30, 2024 from $78.1 million in the nine months ended September 30, 2023. This was primarily driven by a $6.3 million decrease in legal fees as the Company is no longer actively in litigation with AviaGames and had reached a settlement in the second quarter of 2024. Additionally, temporary staffing and professional fees decreased by $3.7 million and $5.8 million, respectively, as we continue to reduce our reliance on contractors. Employee related costs decreased by $7.8 million related to equity forfeitures from the resignation of our General Counsel and President and CFO in early 2024.

Previous wording

The gain from litigation settlement of $46.0 million for the three months ended June 30, 2024 was related to the litigation settlement with AviaGames. See Note 9, Litigation.

Current wording

The gain from litigation settlement of $46.0 million for the nine months ended September 30, 2024 was related to the litigation settlement with AviaGames. See Note 9, Litigation.

Previous wording

The gain from extinguishment of debt of $15.2 million for the three months ended June 30, 2023 was related to the 2021 Senior Secured Notes. Refer to Note 8, Long-Term Debt, of the notes to the consolidated financial statements for further discussion.

Current wording

The gain from extinguishment of debt of $15.2 million for the nine months ended September 30, 2023 was related to the 2021 Senior Secured Notes. Refer to Note 8, Long-Term Debt, of the notes to the consolidated financial statements for further discussion.

Previous wording

Interest income was $0.4 million for the six months ended June 30, 2024 compared to interest expense of $5.2 million for the six months ended June 30, 2023. The decrease of $5.7 million in interest expense was primarily driven by the repurchase of debt in the second quarter of 2023.

Current wording

Interest income was $0.7 million for the nine months ended September 30, 2024 compared to interest expense of $7.5 million for the nine months ended September 30, 2023. The decrease of $8.2 million in interest expense was primarily driven by the repurchase of debt in the second quarter of 2023.

Previous wording

Provision for income taxes decreased by $41.0 thousand to $73.0 thousand in the three months ended June 30, 2024, from $114.0 thousand in the three months ended June 30, 2023. The decrease was primarily driven by change in need for valuation allowance, decrease in foreign activities, and reduced expected state tax liabilities.

Current wording

Provision for income taxes decreased by $51.0 thousand to $142.0 thousand in the nine months ended September 30, 2024, from $193.0 thousand in the nine months ended September 30, 2023. The decrease was primarily driven by change in need for valuation allowance, decrease in foreign activities, and reduced expected state tax liabilities.

Previous wording

“Adjusted EBITDA” is defined as net income (loss), excluding interest income (expense), net; change in fair value of common stock warrant liabilities; other income, net; provision for income taxes; depreciation and amortization; stock-based compensation expense and related payroll tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time, including, but not limited to impairment charges, loss contingency accruals, gain on litigation settlements, restructuring charges and one-time nonrecurring expenses, as they are not indicative of business operations. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. Our management believes Adjusted EBITDA is useful in evaluating its operating performance and is a similar measure reported by publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. By providing this non-GAAP measure, we intend to provide investors with an additional tool to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same manner.

Current wording

“Adjusted EBITDA” is defined as net income (loss), excluding interest income (expense), net; change in fair value of common stock warrant liabilities; other income (expense), net; provision for income taxes; depreciation and amortization; stock-based compensation expense and related payroll tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time, including, but not limited to impairment charges, loss contingency accruals, gain on litigation settlements, restructuring charges and one-time nonrecurring expenses, as they are not indicative of business operations. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. Our management believes Adjusted EBITDA is useful in evaluating its operating performance and is a similar measure reported by publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. By providing this non-GAAP measure, we intend to provide investors with an additional tool to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of this measure should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same manner.

Previous wording

For the three and six months ended June 30, 2024, amount represents certain funds received as part of the settlement with AviaGames.

Current wording

For the nine months ended September 30, 2024, amount represents certain funds received as part of the settlement with AviaGames.

Previous wording

The change from one to two reportable business segments was effective beginning in the fourth quarter of 2023. To provide comparability between reporting periods, results for the three and six months ended June 30, 2023 have been recast to reflect this change.

Current wording

The change from one to two reportable business segments was effective beginning in the fourth quarter of 2023. To provide comparability between reporting periods, results for the three and nine months ended September 30, 2023 have been recast to reflect this change.

Previous wording

Segment Revenue of $22.7 million for the three months ended June 30, 2024 decreased $13.8 million, from $36.6 million in the three months ended June 30, 2023 primarily due to a decrease in player base as monthly active users decreased 24% from 2023.

Current wording

Segment Revenue of $21.5 million for the three months ended September 30, 2024 decreased $12.0 million, from $33.4 million in the three months ended September 30, 2023 primarily due to a decrease in player base as monthly active users decreased 19% from 2023.

Previous wording

Segment Adjusted EBITDA loss of $10.5 million for the three months ended June 30, 2024 improved from a loss of $18.1 million in the three months ended June 30, 2023 due to a decrease of $13.8 million in revenue in addition to a decrease of $3.8 million in employee related expenses as a result of headcount, $7.0 million in professional fees, and $10.6 million in marketing related expense.

Current wording

Segment Adjusted EBITDA loss of $12.3 million for the three months ended September 30, 2024 improved from a loss of $16.8 million in the three months ended September 30, 2023 due to a decrease of $13.0 million in revenue in addition to a decrease of $2.3 million in employee related expenses as a result of headcount, $4.9 million in professional fees, and $10.0 million in marketing related expense.

Previous wording

Segment Adjusted EBITDA loss of $2.1 million for the three months ended June 30, 2024 increased from a loss of $0.8 million in the three months ended June 30, 2023 primarily due to a $1.1 million decrease of in revenue.

Current wording

Segment Adjusted EBITDA loss of $1.6 million for the three months ended September 30, 2024 increased from a loss of $1.7 million in the three months ended September 30, 2023 primarily due to a $0.0 million decrease of in revenue.

Previous wording

Segment Revenue of $45.2 million for the six months ended June 30, 2024 decreased $31.5 million, from $76.6 million in the three months ended June 30, 2023 primarily due to a decrease in player base as monthly active users decreased 26% from 2023.

Current wording

Segment Revenue of $66.6 million for the nine months ended September 30, 2024 decreased $43.2 million, from $109.8 million in the three months ended September 30, 2023 primarily due to a decrease in player base as monthly active users decreased 23% from 2023.

Previous wording

Segment Adjusted EBITDA loss of $26.2 million for the six months ended June 30, 2024 improved from a loss of $37.8 million in the six months ended June 30, 2023 due to a decrease of $31.5 million in revenue in addition to a decrease of $10.4 million in employee related expenses as a result of headcount, $4.1 million in professional fees, and $6.3 million in marketing related expense.

Current wording

Segment Adjusted EBITDA loss of $38.3 million for the nine months ended September 30, 2024 improved from a loss of $54.1 million in the nine months ended September 30, 2023 due to a decrease of $43.2 million in revenue in addition to a decrease of $6.6 million in employee related expenses as a result of headcount, $17.8 million in professional fees, and $32.5 million in marketing related expense.

Previous wording

Segment Revenue of $2.6 million for the three months ended June 30, 2024 decreased $1.1 million, from $3.7 million in the three months ended June 30, 2023 due to lower demand from customers.

Current wording

Segment Revenue of $8.5 million for the nine months ended September 30, 2024 decreased $3.0 million, from $11.5 million in the nine months ended September 30, 2023 due to lower demand from customers.

Previous wording

Segment Adjusted EBITDA loss of $4.2 million for the six months ended June 30, 2024 increased from a loss of $2.0 million in the six months ended June 30, 2023 primarily due to a $2.8 million decrease in revenue.

Current wording

Segment Adjusted EBITDA loss of $5.9 million for the nine months ended September 30, 2024 increased from a loss of $3.7 million in the nine months ended September 30, 2023 primarily due to a $3.0 million decrease in revenue.

Previous wording

Since inception, we have financed our operations primarily from the sales of capital stock. As of June 30, 2024, our principal sources of liquidity were our cash and cash equivalents in the amount of $316.4 million, which are primarily invested in money market funds and marketable securities with maturities of less than three months.

Current wording

Since inception, we have financed our operations primarily from the sales of capital stock. As of September 30, 2024, our principal sources of liquidity were our cash and cash equivalents in the amount of $301.4 million, which are primarily invested in money market funds and marketable securities with maturities of less than three months.

Previous wording

Net cash provided by operating activities of $23.4 million for the six months ended June 30, 2024 reflects a net loss of $0.7 million including $46.0 million received from the litigation settlement with AviaGames in the second quarter, non-cash expenses of $16.2 million related to stock-based compensation, and net cash inflows of $6.3 million from changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities of $12.4 million for the nine months ended September 30, 2024 reflects a net loss of $21.8 million (which includes $46.0 million received from the litigation settlement with AviaGames in the second quarter), non-cash expenses of $22.9 million related to stock-based compensation, and net cash inflows of $8.9 million from changes in operating assets and liabilities.

Previous wording

Net cash provided by investing activities was $2.2 million for the six months ended June 30, 2024. The net cash provided by investing activities included $1.1 million in proceeds from sales of marketable securities and $2.0 million in proceeds from the settlement of the loan with Big Run, offset by purchases of property and equipment of $0.9 million.

Current wording

Net cash provided by investing activities was $0.2 million for the nine months ended September 30, 2024. The net cash provided by investing activities included $1.1 million in proceeds from sales of marketable securities and $2.0 million in proceeds from the settlement of the loan with Big Run, offset by purchases of property and equipment of $1.3 million.

Previous wording

Net cash used in financing activities was $11.2 million for six months ended June 30, 2024, consisting primarily of the repurchase of common stock.

Current wording

Net cash used in financing activities was $12.8 million for nine months ended September 30, 2024, consisting primarily of the repurchase of common stock.

Previous wording

We have operating lease arrangements for office space, and finance lease agreements for certain network equipment. As of June 30, 2024, we had lease payment obligations of $16.4 million, of which $3.3 million is payable within 12 months.

Current wording

We have operating lease arrangements for office space, and finance lease agreements for certain network equipment. As of September 30, 2024, we had lease payment obligations of $15.6 million, of which $3.2 million is payable within 12 months.

Previous wording

The Company’s long-term debt consists of the 2021 Senior Secured Notes. The total principal amount of $129.7 million, gross of discount and issuance costs of $4.9 million, is due on December 15, 2026.

Current wording

The Company’s long-term debt consists of the 2021 Senior Secured Notes. The total principal amount of $129.7 million, gross of discount and issuance costs of $4.5 million, is due on December 15, 2026.