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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2021
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements As of December 31, 2021 and 2020, the recorded values of cash and cash equivalents, restricted cash and accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of the instruments. Cash and cash equivalents held by the Company as of December 31, 2021 and 2020 were $241.3 million and $262.7 million, respectively, and were comprised of cash on hand, money market funds, and highly liquid investments with original contractual maturity dates of three months or less. Cash and money market funds are classified within Level 1 of the fair value hierarchy. Highly liquid investments such as commercial papers and corporate bonds are classified within Level 2 of the fair value hierarchy. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis:
|  | Fair Value Measurements as of December 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |
Available-for-Sale Investments |  |  |  |  |  |  |  |
Asset backed securities |  | $ | — |  |  | $ | 111,552 |  |  | $ | — |  |  | $ | 111,552 |
Certificates of deposits |  | — |  |  | 6,002 |  |  | — |  |  | 6,002 |
Corporate notes and bonds |  | — |  |  | 206,989 |  |  | — |  |  | 206,989 |
Commercial paper |  | — |  |  | 109,391 |  |  | — |  |  | 109,391 |
Foreign government securities |  | — |  |  | 8,181 |  |  | — |  |  | 8,181 |
US Government Securities |  | 86,787 |  |  | — |  |  | — |  |  | 86,787 |
Total assets |  | $ | 86,787 |  |  | $ | 442,114 |  |  | $ | — |  |  | $ | 528,902 |
Liabilities: |  |  |  |  |  |  |  |
Common Stock Warrants |  |  |  |  |  |  |  |
Public Common Stock Warrants |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Private Common Stock Warrants |  | — |  |  | — |  |  | 6,293 |  |  | 6,293 |
Total liabilities |  | $ | — |  |  | $ | — |  |  | $ | 6,293 |  |  | $ | 6,293 |
|  | Fair Value Measurements as of December 31, 2020
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Liabilities: |  |  |  |  |  |  |  |
Common Stock Warrants |  |  |  |  |  |  |  |
Public Common Stock Warrants |  | $ | 124,545 |  |  | $ | — |  |  | $ | — |  |  | $ | 124,545 |
Private Common Stock Warrants |  | — |  |  | — |  |  | 53,687 |  |  | 53,687 |
Total liabilities |  | $ | 124,545 |  |  | $ | — |  |  | $ | 53,687 |  |  | $ | 178,232 |
Available-for-Sale Investments Available-for-sale investments were classified within Level 1 or Level 2 because the Company’s use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The market values of Level 2 investments are determined based on observable inputs for the securities other than quoted prices, such as interest rates, yield curves, and credit spreads, or quoted prices for identical or similar securities in markets that are not considered active. There were no transfers between levels during the periods presented. Public and Private Common Stock Warrants The Public Warrants were classified within Level 1 as they are publicly traded and had an observable market price in an active market, and were fully redeemed as of December 31, 2021. The Private Warrants were classified within Level 3 as they were valued based on a BSM pricing model, which involved the use of certain unobservable inputs, such as expected volatility estimated based on the average historical stock price volatility of comparable companies. As of December 31, 2021 and 2020, the fair value of the Private Warrants liability was $6.2 million and $53.7 million, respectively. The following is a rollforward of balances for Private Warrants:
|  | Private Warrants
Balance at December 31, 2020 |  | $ | 53,687 |
Private warrant shares exercised |  | (3,706) |
Fair market value adjustment |  | (43,688) |
Balance as of December 31, 2021 |  | $ | 6,293 |
Forward Contract Liability The Company had no outstanding forward contract liability as it was settled during the year ended December 31, 2020. Prior to the FEAC Business Combination, the Company measured the Redeemable Convertible Series E preferred stock forward contract liability at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the Redeemable Convertible Series E preferred stock forward contract liability uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assessed these assumptions and estimates on an on-going basis in 2020 until settlement of the contract as additional data impacting the assumptions and estimates was obtained. Changes in the fair value of the redeemable convertible Series E preferred stock forward contract liability related to updated assumptions and estimates are recognized within Other income (expense), net in the consolidated statements of operations and comprehensive loss. The table below reflects the fair value measurement of the Company’s Level 3 inputs as of September 10, 2020, the date on which the Redeemable Convertible Series E preferred forward contract liability was settled, prior to giving effect to the FEAC Business Combination:
|  |  | Fair Value as of September 10, 2020 |  |  | Valuation Technique |  |  | Unobservable Input Description |  |  | Input
Redeemable Convertible Series E preferred stock forward contract liability |  |  | $ | 21,688 |  |  |  | Discounted cash flow |  |  | Fair value of Redeemable Convertible Series E preferred stock |  |  | $ | 9.17 |
The fair value of the redeemable convertible Series E preferred stock forward contract liability as of the September 10, 2020 settlement date was determined by multiplying the number of additional shares issued by the Company by the difference between the issuance price in accordance with the forward contract agreement and the estimated fair value of the redeemable convertible Series E preferred stock. Earnout Shares Pursuant to the Merger Agreement, FEAC delivered 10,000,000 of its shares of FEAC Class B common stock into escrow that are subject to forfeiture if certain earnout conditions described more fully in the Merger Agreement are not satisfied. If the earnout conditions are fully satisfied, 5,000,000 of such shares will be released to the Sponsor in the form of shares of Class A common stock of New Skillz, and the other 5,000,000 shares will be released to the Old Skillz stockholders, who will receive shares of New Skillz common stock as a result of the FEAC Business Combination in the form of shares of Class A common stock of New Skillz (other than the Founder and a trust for the benefit of his family members, who will receive shares of Class B common stock of New Skillz), in each case as further described in the Merger Agreement. The fair value of the Earnout Shares of $172.3 million 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 Earnout Shares were included in the net consideration from the FEAC Business Combination and recorded in Additional paid-in capital with a corresponding offset to Additional paid-in capital. In January 2021, the conditions for the release of the Earnout Shares were satisfied. The Sponsor released 10,000,000 of its shares of FEAC Class B common stock from escrow as certain earnout conditions were satisfied. 5,000,000 of such shares were released to the Sponsor in the form of shares of the Company’s Class A common stock and the other 5,000,000 shares were released to the Old Skillz stockholders, who received shares of the Company’s common stock as a result of the FEAC Business Combination in the form of shares of Class A common stock of the Company (other than the Founder and a trust for the benefit of his family members, who received shares of Class B common stock of the Company).

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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