8-K: Skillz Inc. Receives NYSE Notice Due to Late 10-K Filing

Skillz Inc. has received a notice from the NYSE for failing to file its annual report on time, putting its listing at risk.

Summary

• Skillz Inc. received a notice from the New York Stock Exchange (NYSE) on April 2, 2024, stating the company is not compliant with listing standards due to the late filing of its annual report on Form 10-K for the fiscal year ended December 31, 2023.
• The company was unable to file the Form 10-K by the extended deadline of April 1, 2024, due to ongoing procedures related to its year-end process and audit.
• The NYSE has given Skillz six months from March 15, 2024, to file the Form 10-K to regain compliance, with a possible six-month extension at the NYSE's discretion.
• The company does not expect any material changes to the preliminary financial results previously reported in their March 14, 2024 earnings release.
• Skillz is working to file the Form 10-K as soon as possible, but there is no guarantee it will be filed within the given timeframe.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the late filing and the risk of delisting, despite the company's efforts to rectify the situation. The lack of material changes to preliminary results is a small positive, but the overall situation is concerning.

Positives

• The NYSE has provided a six-month period for Skillz to regain compliance.
• The company does not expect material changes to previously reported preliminary financial results.
• Skillz is actively working to complete the necessary procedures and file the Form 10-K.

Negatives

• Skillz has failed to meet the deadline for filing its annual report, resulting in a non-compliance notice from the NYSE.
• There is no guarantee that the Form 10-K will be filed within the six-month period.
• The NYSE may commence delisting proceedings at any time if it deems the circumstances warrant.

Risks

• The company faces the risk of delisting from the NYSE if the Form 10-K is not filed within the given timeframe.
• The delay in filing the annual report could negatively impact investor confidence.
• There is uncertainty regarding the timeline for completing the audit and filing the Form 10-K.
• The company's internal controls over financial reporting have material weaknesses that need to be remediated.

Future Outlook

The company expects to file the Form 10-K within the six-month period granted by the NYSE, but there is no assurance that this will occur.

Management Comments

• The company is working diligently to complete the necessary work to file the Form 10-K as soon as practicable.
• The company does not expect any material change to the preliminary financial results to be included in the Form 10-K compared to the financial information reported in the earnings release the Company furnished to the SEC on the Company's Current Report on Form 8-K filed on March 14, 2024.

Industry Context

This announcement highlights the importance of timely financial reporting for publicly listed companies and the potential consequences of non-compliance with exchange listing standards. It is not uncommon for companies to face delays in their financial reporting, but it can raise concerns about internal controls and financial health.

Comparison to Industry Standards

• Many companies in the technology sector, particularly those that have experienced rapid growth or have complex accounting, have faced similar challenges with timely financial reporting.
• Companies like WeWork and Luckin Coffee have faced scrutiny for accounting issues and delays in reporting, which led to significant market repercussions.
• The six-month grace period provided by the NYSE is a standard procedure, but the potential for delisting is a serious concern that other companies have faced.
• The fact that Skillz does not expect material changes to previously reported preliminary results is a positive sign, but the delay itself is a negative signal.

Stakeholder Impact

• Shareholders may experience a decline in share value due to the uncertainty surrounding the company's listing status.
• Employees may be concerned about the company's financial health and future prospects.
• Customers and partners may have concerns about the company's stability.

Next Steps

• Skillz needs to complete its audit and file the Form 10-K within the six-month period granted by the NYSE.
• The company must address the material weaknesses in its internal controls over financial reporting.

Key Dates

Keywords

NYSE, delisting, Form 10-K, late filing, compliance, annual report, audit, financial statements, Skillz