Firy (FIRY) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We identified certain misstatements to our previously issued financial statements and have restated certain of our Consolidated Financial Statements, which has created additional risks and uncertainties that may have a material adverse effect on our business, financial position and results of operations
2. 02As discussed in Part II – 9A, “Controls and Procedures”, of this Annual Report, our management concluded that material weaknesses existed as of December 31, 2024
3. 03We are subject to risks associated with competitors that do not follow ethical fairness practices to grow their businesses
4. 04We are subject to risks associated with disruptive technologies, including artificial intelligence
5. 05Historically, a limited number of games have accounted for a substantial portion of our revenue. If these games were to become less popular or be removed from our platform and we are unable to identify and market suitable replacements, our business and prospects could suffer
6. 06Our growth will depend on the ability to attract and retain end-users who participate in paid-entry fee contests, and the loss of such end-users, or failure to attract new end-users in a cost-effective manner, would adversely affect our business, financial condition, results of operations and prospects
7. 07It may become increasingly difficult and more expensive for us to acquire players for our games and we may not achieve a positive return on investment on our user acquisition efforts
8. 08Maintaining and enhancing our brand and reputation is critical to our business prospects. Failure to maintain or grow our brand and reputation could harm our business, financial condition and results of operations
9. 09Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition, results of operations and prospects
10. 10intelligence), evolving changes in the sources, capabilities and targets for cybersecurity attacks, as well as the increasing sophistication of cyber criminals increase the risk of material data compromise or business disruption
11. 11results of operations and growth prospects. It is also likely that as our business grows and evolves, particularly if we expand to other countries, we will become subject to laws in additional jurisdictions or other jurisdictions may claim that we are required to comply with their laws
12. 12Changes in tax laws or tax rulings could materially affect our effective tax rates, financial position and results of operations
13. 13Companies and governmental agencies may restrict access to platforms, our website, mobile applications or the Internet generally, which could lead to the loss or slower growth of players on the Skillz platform
14. 14We primarily rely, and expect to continue to rely, on Amazon Web Services (“AWS”) to deliver our offerings to users on our platform and any failure or disruption of or interference with our use of AWS could adversely affect our business, financial condition, results of operations and prospects
15. 15Our use of third-party open source software could negatively affect our ability to offer our products and services through our platform and subject us to possible litigation
16. 16We rely on other third-party service providers and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected
17. 17We rely on third-party providers to validate the identity and identify the location of end-users, and if such providers fail to perform adequately, or if we do not maintain business relationships with them, our business, financial condition, results of operations and prospects could be adversely affected
18. 18Our strategy to expand internationally will be subject to increased challenges and risks; our growth prospects and market potential will depend on our ability to operate in a number of jurisdictions and if we fail to do so our business, financial condition, results of operations and prospects could be impaired
19. 19Our results of operations may fluctuate due to seasonality and other factors and, therefore, our periodic operating results will not be guarantees of future performance
20. 20We may invest in or acquire other businesses, and our business may suffer if we miscalculate the value or benefits of such acquired businesses, if we are unable to successfully integrate acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions
21. 21could affect the manner in which we do business, the geographical location or segregation of our relevant operations, and could adversely affect our financial results
22. 22Failure to obtain, maintain, protect or enforce our intellectual property rights could harm our business, results of operations, financial condition and prospects
23. 23Our operating history and our history of operating losses make it difficult to evaluate our current business and prospects and may increase the risks associated with your investment
24. 24We rely on assumptions and estimates to calculate certain of our key metrics, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business
25. 25Our workforce and operations have grown substantially since our inception. If we are unable to effectively manage future expected growth, our financial performance and future prospects will be adversely affected
26. 26We have been and continue to be party to litigation and we may be subject to future litigation in the operation of our business. An adverse outcome in one or more proceedings could adversely affect our business
27. 27Our insurance may not provide adequate levels of coverage against claims
28. 28Our reported financial results may be affected by changes in accounting principles generally accepted in the United States
29. 29We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business, financial condition, results of operations and prospects
30. 30Our investment portfolio and our ability to access cash and cash equivalents may become impaired by deterioration of the financial markets
31. 31Global climate change, the occurrence of an earthquake, other natural disaster or other significant business interruption at or near any of our facilities could cause damage to our facilities and equipment and interfere with our operations

Risks Related to Ownership of Our Class A Common Stock

1. 32The trading price of our Class A common stock has been, and may continue to be, volatile, and the value of our Class A common stock may decline
2. 33There can be no assurance that we will be able to remain in compliance with the continued listing standards of the NYSE
3. 34We are a “controlled company” within the meaning of the rules of the NYSE and our stockholders do not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies
4. 35Delaware law and provisions in our Fifth Amended and Restated Certificate of Incorporation (our “Charter”) and Amended and Restated Bylaws (our “Bylaws”) could make a takeover proposal more difficult

Risks Related to Our Indebtedness

1. 36Our indebtedness could adversely affect our financial health and our ability to execute our business strategy
2. 37The instruments governing our indebtedness impose certain restrictions on our business, and future such instruments could impose new restrictions on our business
3. 38In addition, the instruments contain customary events of default upon the occurrence of which, after any applicable grace period, the indebtedness could be declared immediately due and payable
4. 39Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to service or repay our substantial debt