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Washington, D.C. 20549







Pursuant to Section 13 or 15(d) of the 

Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): December 15, 2022



Snail, Inc.

(Exact name of registrant as specified in its charter)



Delaware   001-41556   88-4146991

(State or other jurisdiction

of incorporation)



File Number)


(IRS Employer

Identification Number)


12049 Jefferson Blvd
Culver City, CA 90230

(Address of principal executive offices) (Zip Code)


+1 (310) 988-0643

(Registrant’s telephone number, including area code)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


¨      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


¨      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


¨      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


¨      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title of each class  



  Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share   SNAL   The Nasdaq Stock Market LLC


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company x


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨






Item 2.02 Results of Operations and Financial Condition.


On December 15, 2022, Snail, Inc. (the “Company”) issued a press release to report its financial results for the quarter ended September 30, 2022. Attached hereto as Exhibit 99.1 is a copy of the Company’s press release.


This information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


Item 9.01 Financial Statements and Exhibits.


(d) Exhibits.


Exhibit No.   Description
99.1   Press Release dated as of December 15, 2022
104   Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)






Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: December 15, 2022 By: /s/ Jim S. Tsai
  Name: Jim S. Tsai
  Title: Chief Executive Officer


Exhibit 99.1




Snail, Inc. Reports Third Quarter 2022 Financial Results


Culver City, CA – December 15, 2022 – Snail, Inc. (Nasdaq: SNAL) (“Snail” or “the Company”), a leading, global independent developer and publisher of interactive digital entertainment, today announced third quarter 2022 financial results for the quarter ended September 30, 2022. These third quarter results are prior to the exchange of stock and reflect the activities of Snail Games USA Inc. and its subsidiaries.


Jim Tsai, Chief Executive Officer of Snail, commented: “We are thrilled to share our first earnings report as a public company. Our goal of creating immersive gaming experiences and products will be supported by our access to the capital markets. We look forward to continuing to execute against our product roadmap and provide high-end entertainment experiences for consumers around the world.”


Third Quarter 2022 and Subsequent Business Highlights


·ARK: Survival Evolved. In the three-month period ended September 30, 2022, ARK: Survival Evolved averaged a total of 328,583 daily active users (“DAUs”) versus 221,336 DAUs in the prior year period.


o4.4x growth in new install for the third quarter 2022 vs. third quarter 2021; 6.4M vs. 1.2M, respectively. Growth is largely due to Epic Games’ Free Week.

oUnits sold sustained for the third quarter 2022 compared to same period last year; 1.1M vs. 1.2M, respectively. Units sold includes game and DLCs.

oThrough September 30, 2022, total playtime amounts to 2.9 billion hours.


·IPO. On November 9, 2022, the Company completed its initial public offering (“IPO”), in which it issued and sold 3,000,000 shares of Class A common stock at a public offering price of $5.00 per share for gross proceeds to the Company of approximately $15.0 million. Concurrently with the IPO, the stockholders of Snail Games USA collectively exchanged 500,000 shares of Snail Games USA common stock for 6,251,420 shares of Class A common stock and 28,748,580 shares of Class B common stock of Snail, Inc.


·Share Repurchase Program. On November 10, 2022, the Company’s board of directors approved and established a new share repurchase program (the “Share Repurchase Program”) to reacquire shares of Snail, Inc.’s Class A common stock. The maximum aggregate value of the shares repurchased shall not exceed $5.0 million, and there is no fixed expiration date on the Share Repurchase Program. The exact number of shares of Class A common stock and timing and method of the repurchase are at the discretion of the CEO, CFO and Treasurer. As of December 13, 2022, 1,090,877 shares of Class A common stock were repurchased pursuant to the Share Repurchase Program and the average price paid per share was $2.98.


Third Quarter 2022 Financial Highlights


·Revenue decreased by 36.1% to $15.6 million for third quarter of 2022 from $24.4 million over the same period in the prior year primarily as a result of a decrease in ARK units sold. ARK related revenues decreased by $8.5 million attributable to the age of the game and sales normalizing in 2022 after the initial release of Genesis II in June 2021. One off payments and revenue recognized for previous contract payments were the cause of $3.3 million of the $8.5 million decrease in ARK revenue, with reduced sales of ARK and ARK mobile responsible for the remaining $5.2 million decrease.






·Net loss for the third quarter of 2022 was $1.5 million compared to net income of $3.8 million in the prior year period due to the reduced sales of ARK, static licensing fees, and increased general and administrative costs.


·Bookings for the three months ended September 30, 2022, decreased by $6.9 million, or 37.9%, to $11.3 million, compared to the prior year period, primarily as a result of a decline in ARK-related revenues.


·EBITDA for the third quarter of 2022 was a loss of $1.5 million compared to a gain of $4.6 million in the prior year period.


·As of September 30, 2022, cash was $9.0 million. This cash balance does not reflect the net proceeds from IPO of approximately $12.0 million, which occurred on November 9, 2022.


Heidy Chow, Chief Financial Officer of Snail stated: “We are pleased with the continued engagement in our ARK series of games. We want to remind investors that we are committed to investing in our brand and fostering long-term growth. This includes focusing on the upcoming release of ARK 2, launching additional products, and implementing initiatives that enhance our product suite and improve our speed to market.”


Use of Non-GAAP Financial Measures


In addition to the financial results determined in accordance with U.S. generally accepted accounting principles, or GAAP, Snail believes Bookings and EBITDA, as non-GAAP measures, are useful in evaluating its operating performance. Bookings and EBITDA are non-GAAP financial measures that are presented as supplemental disclosures and should not be construed as alternatives to net income (loss) or revenue as indicators of operating performance, nor as alternatives to cash flow provided by operating activities as measures of liquidity, both as determined in accordance with GAAP. Snail supplementally presents Bookings and EBITDA because they are key operating measures used by management to assess financial performance. Bookings adjusts for the impact of deferrals and, Snail believes, provides a useful indicator of sales in a given period. EBITDA adjusts for items that Snail believes do not reflect the ongoing operating performance of its business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to its operating performance. Management believes Bookings and EBITDA are useful to investors and analysts in highlighting trends in Snail’s operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which Snail operates and capital investments.


Bookings is defined as the net amount of products and services sold digitally or physically in the period. Bookings is equal to revenues excluding the impact from deferrals. Below is a reconciliation of total net revenue to Bookings, the closest GAAP financial measure.


   Three Months Ended
September 30,
   Nine Months Ended
September 30,
   2022   2021   2022   2021 
   (in millions)   (in millions) 
Total net revenue  $15.6   $24.4   $59.1   $83.2 
Change in deferred net revenue   (4.3)   (6.2)   (7.3)   (11.4)
Bookings  $11.3   $18.2   $51.8   $71.8 






We define EBITDA as net income (loss) before (i) interest expense, (ii) interest income, (iii) income tax provision (benefit) and (iv) depreciation and amortization expense. The following table provides a reconciliation from net income (loss) to EBITDA :


   Three Months Ended
September 30,
   Nine Months Ended
September 30,
   2022   2021   2022   2021 
   (in millions)   (in millions) 
Net income (loss)  $(1.5)  $3.8   $3.2   $17.0 
Interest income and interest income – related parties   -    (0.4)   (0.6)   (1.1)
Interest expense and interest expense – related parties   0.3    0.1    0.6    0.3 
Income tax provision (benefit)   (0.4)   0.9    0.8    4.2 
Depreciation and amortization expense   0.1    0.2    0.4    0.6 
EBITDA  $(1.5)  $4.6   $4.4   $21.0 


Webcast Details


The Company will host a webcast at 5:00 PM ET today to discuss the third quarter 2022 financial results. Participants may access the live webcast and replay on the Company’s investor relations website at https://investor.snail.com/. The earnings call may also be accessed by dialing 1 (877) 451-6152 from the United States, or by dialing 1 (201) 389-0879 internationally.


About Snail, Inc.


Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.







Forward-Looking Statements


This press release contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “may,” “predict,” “continue,” “estimate” and “potential,” or the negative of these terms or other similar expressions. Forward-looking statements appear in a number of places in this press release and include, but are not limited to, statements regarding Snail’s intent, belief or current expectations. These forward-looking statements include information about possible or assumed future results of Snail’s business, financial condition, results of operations, liquidity, plans and objectives. The statements Snail makes regarding the following matters are forward-looking by their nature: growth prospects and strategies; launching new games and additional functionality to games that are commercially successful; expectations regarding significant drivers of future growth; its ability to retain and increase its player base and develop new video games and enhance existing games; competition from companies in a number of industries, including other casual game developers and publishers and both large and small, public and private Internet companies; its ability to attract and retain a qualified management team and other team members while controlling its labor costs; its relationships with third-party platforms such as Xbox Live and Game Pass, PlayStation Network, Steam, Epic Games Store, Google Stadia, the Apple App Store, the Google Play Store and the Amazon Appstore; the size of addressable markets, market share and market trends; its ability to successfully enter new markets and manage international expansion; protecting and developing its brand and intellectual property portfolio; costs associated with defending intellectual property infringement and other claims; future business development, results of operations and financial condition; the effects of the COVID-19 pandemic and the ongoing conflict involving Russia and Ukraine on its business and the global economy generally; rulings by courts or other governmental authorities; the Share Repurchase Program, including expectations regarding the timing and manner of repurchases made under the program; its plans to pursue and successfully integrate strategic acquisitions; assumptions underlying any of the foregoing.






Further information on risks, uncertainties and other factors that could affect Snail’s financial results are included in its filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its Quarterly Report on Form 10-Q and other periodic reports on Forms 10-K and 10-Q filed or to be filed with the SEC. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those expressed or implied in the forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on management’s beliefs and assumptions and on information currently available to Snail, and Snail does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.






Snail Games USA Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



   September 30,
   December 31,
Current Assets:          
Cash  $9,044,666   $10,164,338 
Accounts receivable, net of allowances for doubtful accounts of $19,929 and $31,525, respectively   4,596,313    12,244,785 
Accounts receivable - related party, net   12,239,430    8,435,823 
Loan and interest receivable - related party   101,249    203,408 
Prepaid expenses - related party, net of long-term portion   1,500,000    3,145,000 
Prepaid expenses and other current assets   11,704,897    11,017,007 
Total current assets   39,186,555    45,210,361 
Restricted cash and cash equivalents   6,368,016    6,389,777 
Prepaid expenses - related party   6,520,000    - 
Property, plant and equipment, net   5,245,271    5,678,701 
Intangible assets, net - license - related parties   3,235,038    8,787,976 
Intangible assets, net - license   -    250,000 
Intangible assets, net - other   275,600    277,148 
Deferred income taxes   8,191,051    8,191,051 
Other noncurrent assets   194,032    199,919 
Operating lease right-of-use assets, net   3,887,326    5,100,912 
Total assets  $73,102,889   $80,085,845 
Current Liabilities:          
Accounts payable  $6,765,934   $3,871,510 
Accounts payable - related party   22,330,781    23,733,572 
Accrued expenses and other liabilities   2,375,610    2,975,475 
Loan payable - related parties   -    400,000 
Interest payable - related parties   527,770    528,439 
Revolving loan   9,000,000    9,000,000 
Short term note   6,666,667    - 
Notes payable   -    216,329 
Current portion of long-term debt   79,425    77,348 
Current portion of deferred revenue   3,934,693    11,005,517 
Current portion of operating lease liabilities   1,339,172    1,688,965 
Total current liabilities   53,020,053    53,497,155 
Accrued expenses   454,438    - 
Long-term debt, net of current portion   2,825,390    2,885,434 
Deferred revenue, net of current portion   9,048,505    9,275,417 
Operating lease liabilities, net of current portion   3,285,679    4,375,786 
Total liabilities   68,634,064    70,033,792 
Commitments and contingencies          
Common stock, $0.01 par value, 1,000,000 shares authorized, 500,000 shares issued and outstanding   5,000    5,000 
Additional paid-in capital   12,881,055    94,159,167 
Due from shareholder - loan receivable   -    (91,388,176)
Due from shareholder - interest receivable   -    (2,965,346)
Accumulated other comprehensive loss   (343,277)   (266,557)
Retained earnings (accumulated deficit)   (2,593,035)   16,045,231 
Total Snail Games USA Inc. equity   9,949,743    15,589,319 
Noncontrolling interests   (5,480,918)   (5,537,266)
Total equity   4,468,825    10,052,053 
Total liabilities, noncontrolling interests and equity  $73,102,889   $80,085,845 






Snail Games USA Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)


   For the   For the 
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2022   2021   2022   2021 
Revenues, net  $15,614,171   $24,361,019   $59,132,284   $83,200,198 
Cost of revenues   11,468,961    15,478,327    37,744,863    48,381,061 
Gross profit   4,145,210    8,882,692    21,387,421    34,819,137 
Operating expenses:                    
General and administrative   5,434,013    3,997,917    16,177,534    13,053,478 
Research and development   116,624    216,798    479,630    588,207 
Advertising and marketing   198,417    148,752    569,127    265,812 
Depreciation and amortization   128,536    208,896    435,644    638,659 
Total operating expenses   5,877,590    4,572,363    17,661,935    14,546,156 
Income (loss) from operations   (1,732,380)   4,310,329    3,725,486    20,272,981 
Other income (expense):                    
Interest income   12,712    21,230    45,789    71,857 
Interest income - related parties   505    420,164    582,128    1,128,397 
Interest expense   (261,070)   (114,447)   (613,338)   (304,918)
Interest expense - related parties   -    (2,016)   (3,222)   (5,983)
Other income   19,500    31,247    319,153    482,790 
Foreign currency transaction gain (loss)   16,169    (15,987)   21,679    (80,755)
Equity in loss of unconsolidated entity   -    -    -    (314,515)
Total other income (expense), net   (212,184)   340,191    352,189    976,873 
Income (loss) before provision for income taxes   (1,944,564)   4,650,520    4,077,675    21,249,854 
Income tax provision (benefit)   (398,998)   891,538    803,305    4,214,245 
Net income (loss)   (1,545,566)   3,758,982    3,274,370    17,035,609 
Net gain (loss) attributable to non-controlling interests   (6,828)   (125,881)   56,348    (489,499)
Net income (loss) attributable to Snail Games USA Inc.   (1,538,738)   3,884,863    3,218,022    17,525,108 
Comprehensive income statement:                    
Other comprehensive income (loss)   5,682    382,088    (76,720)   421,048 
Total other comprehensive income (loss)  $(1,533,056)  $4,266,951   $3,141,302   $17,946,156 






Snail Games USA Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows


Nine Months Ended September 30,  2022   2021 
Cash flows from operating activities:          
Net income  $3,274,370   $17,035,609 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:          
Amortization - intangible assets - license   250,000    450,000 
Amortization - intangible assets - license, related parties   5,552,938    10,675,193 
Amortization - intangible assets - other   672    6,149 
Amortization - loan origination fees   19,149    22,388 
Depreciation and amortization - property and equipment   435,644    638,659 
Gain on lease termination   (122,533)   - 
Gain on paycheck protection program and economic injury disaster loan forgiveness   (174,436)   (392,200)
Gain on disposal of fixed assets   (17,067)   - 
Interest income from shareholder loan   (580,878)   (1,074,881)
Deferred taxes   -    2,682 
Decrease in non-controlling interest - dissolution of subsidiary   -    39,340 
Changes in assets and liabilities:          
Accounts receivable   7,648,432    5,049,456 
Accounts receivable - related party   (3,803,606)   2,542,956 
Prepaid expenses - related party   (4,875,000)   - 
Prepaid expenses and other current assets   (2,232,406)   (5,689,750)
Other noncurrent assets   (15,228)   241,422 
Accounts payable   2,905,024    (390,331)
Accounts payable - related party   (1,402,791)   311,024 
Accrued expenses   (127,993)   700,163 
Interest payable - related parties   1,490    5,983 
Lease liabilities   (103,782)   (130,090)
Deferred revenue   (7,297,736)   (11,389,985)
Net cash (used in) provided by operating activities   (665,737)   18,653,787 
Cash flows from investing activities:          
Loan provided to related party   -    (24,506,321)
Repayment on loan provided by related party   (300,000)   - 
Acquisition of license rights - related party   -    (5,000,000)
Purchases of property and equipment   (5,256)   (3,403)
Proceeds from sale of property and equipment   19,500    - 
Repayment on Pound Sand note   1,496,063    - 
Investment at cost   -    (895)
Net cash provided by (used in) investing activities   1,210,307    (29,510,619)
Cash flows from financing activities:          
Repayments on long-term debt   (57,967)   (6,731,666)
Repayments on short-term note   (3,333,333)   - 
Borrowings on long-term debt   -    2,904,815 
Borrowings on short-term note   10,000,000    - 
Payments on paycheck protection program and economic injury disaster loan   (90,198)   - 
Refund of payments on paycheck protection program and economic injury disaster loan   48,305    - 
Borrowings on revolving loan   -    6,500,000 
Cash dividend declared and paid   (8,200,000)   - 
Net cash (used in) provided by financing activities   (1,633,193)   2,673,149 
Effect of currency translation on cash and cash equivalents   (52,810)   380,403 
Net decrease in cash, and restricted cash and cash equivalents   (1,141,433)   (7,803,280)
Cash, and restricted cash and cash equivalents - beginning of period   16,554,115    33,902,707 
Cash, and restricted cash and cash equivalents – end of period  $15,412,682   $26,099,427 
Supplemental disclosures of cash flow information           
Cash paid during the period for:          
Interest  $594,189   $105,577 
Income taxes  $831,400   $3,300,000 
Noncash transactions during the period for:          
Loan and interest payable - related parties  $103,890   $- 
Loan and interest receivable - related parties  $(103,890)  $- 
Loan and interest from shareholder  $94,934,400   $- 
Dividend distribution  $(94,934,400)  $- 
Noncash financing activity during the period:          
Gain on paycheck protection program and economic injury disaster loan forgiveness  $(174,436)  $(392,200)