FIGS, Inc. [FIGS] Filings

10-Q 1 figs-20220331.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number: 001-39549

FIGS, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	46-2005653
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2834 Colorado Avenue, Suite 100 Santa Monica, CA	90404
(Address of principal executive offices)	(Zip Code)

(424) 300-8330

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 par value per share	FIGS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2022, there were 158,569,730 shares of the registrant’s Class A common stock, par value $0.0001, outstanding and 6,196,339 shares of the registrant’s Class B common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Balance Sheets	5
	Statements of Operations and Comprehensive Income	6
	Statements of Stockholders’ Equity	7
	Statements of Cash Flows	8
	Notes to Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	62
Item 6.	Exhibits	63
Signatures		64

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include without limitation statements regarding our future results of operations and financial position, industry and business trends, the impact of the COVID-19 pandemic, our use of ocean and air freight, our product and color launch calendar, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our Class A common stock. The principal risks and uncertainties affecting our business include the following:

•

Our recent rapid growth may not be sustainable or indicative of future growth, and we expect our growth rate to ultimately slow over time.

•

If we fail to manage our growth effectively, our business, financial condition and results of operations may be adversely affected.

•

We have only recently achieved profitability and may not be profitable in the future.

•

Our success depends on our ability to maintain the value and reputation of our brand.

•

If we fail to attract new customers, retain existing customers, or fail to maintain or increase sales to those customers, our business, financial condition, results of operations and growth prospects will be harmed.

•

If our marketing efforts are not successful, our business, financial condition and results of operations could be harmed.

•

Our business depends on our ability to maintain a strong community of engaged customers and Ambassadors, including through the use of social media. We may not be able to maintain and enhance our brand if we experience negative publicity related to our marketing efforts or use of social media, fail to maintain and grow our network of Ambassadors or otherwise fail to meet our customers’ expectations.

•

If we do not continue to successfully develop and introduce new, innovative and updated products, we may not be able to maintain or increase our sales and profitability.

•

The market for healthcare apparel is highly competitive.

•

Our future success depends on the continuing efforts of our key employees and our ability to attract and retain highly skilled personnel and senior management.

•

We plan to expand into additional international markets, which will expose us to new and significant risks.

•

Shipping is a critical part of our business and any changes in, or disruptions to, our shipping arrangements could adversely affect our business, financial condition and results of operations.

•

If we are unable to accurately forecast customer demand, manage our inventory and plan for future expenses, our results of operations could be adversely affected.

•

Our business may be subject to uncertainty as a result of the COVID-19 pandemic.

•

Our reliance on a limited number of third-party suppliers to provide materials for and produce our products could cause problems in our supply chain and subject us to additional risks.

•

The dual-class structure of our common stock and voting agreement among our co-founders and co-Chief Executive Officers, Tulco, LLC and Thomas Tull and certain related persons and trusts have the effect of concentrating control with our co-founders and co-Chief Executive Officers, and Thomas Tull.

•

We are a “controlled company” within the meaning of the rules of the New York Stock Exchange and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You do not have the same protections afforded to stockholders of companies that are subject to such requirements.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FIGS, INC.

BALANCE SHEETS

(In thousands, except share and per share data)


	As of
	March 31, 2022		December 31, 2021
Assets	(Unaudited)
Current assets
Cash and cash equivalents	$	189,401	$	195,374
Restricted cash		—		2,056
Accounts receivable		2,910		2,441
Inventory, net		102,765		86,068
Prepaid expenses and other current assets		11,257		7,400
Total current assets		306,333		293,339
Non-current assets
Property and equipment, net		7,719		7,613
Operating lease right-of-use assets		17,248		—
Deferred tax assets		10,645		10,239
Other assets		745		560
Total non-current assets		36,357		18,412
Total assets	$	342,690	$	311,751
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	17,010	$	14,604
Operating lease liabilities		2,806		—
Accrued expenses		24,200		24,677
Accrued compensation and benefits		4,093		6,464
Sales tax payable		4,335		3,728
Gift card liability		5,275		5,590
Deferred revenue		605		596
Returns reserve		2,528		2,761
Income tax payable		325		3,973
Total current liabilities		61,177		62,393
Non-current liabilities
Operating lease liabilities, non-current		17,969		—
Deferred rent and lease incentive		—		3,542
Other non-current liabilities		243		243
Total liabilities		79,389		66,178
Commitments and contingencies (Note 8)
Stockholders’ equity
Class A Common stock — par value $0.0001 per share, 1,000,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 158,530,688 and 152,098,257 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		15		15
Class B Common stock — par value $0.0001 per share, 150,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 6,196,339 and 12,158,187 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		1		1
Preferred stock — par value $0.0001 per share, 100,000,000 shares authorized as of March 31, 2022 and December 31, 2021; zero shares issued and outstanding as of March 31, 2022 and December 31, 2021		—		—
Additional paid-in capital		236,455		227,626
Retained earnings		26,830		17,931
Total stockholders’ equity		263,301		245,573
Total liabilities and stockholders’ equity	$	342,690	$	311,751

The accompanying notes are an integral part of these unaudited financial statements

FIGS, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except share and per share data)

(Unaudited)


	Three months ended March 31,
	2022			2021
Net revenues	$	110,100		$	87,079
Cost of goods sold		31,670			24,719
Gross profit		78,430			62,360
Operating expenses
Selling		22,058			17,114
Marketing		15,408			10,840
General and administrative		27,219			18,346
Total operating expenses		64,685			46,300
Net income from operations		13,745			16,060
Other income (loss), net
Interest income (expense)		9			(36	)
Other expense		(1	)		(2	)
Total other income (loss), net		8			(38	)
Net income before provision for income taxes		13,753			16,022
Provision for income taxes		4,854			4,582
Net income and comprehensive income	$	8,899		$	11,440
Earnings attributable to Class A and Class B common stockholders
Basic earnings per share	$	0.05		$	0.07
Diluted earnings per share	$	0.05		$	0.07
Weighted-average shares outstanding—basic		164,406,142			154,501,660
Weighted-average shares outstanding—diluted		193,379,275			168,012,364

The accompanying notes are an integral part of these unaudited financial statements.

FIGS, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


	Common Stock				Class A Common Stock					Class B Common Stock					Additional				Total Stockholders'
	Shares		Amount		Shares			Amount		Shares			Amount		Paid-in Capital		Retained Earnings		Equity
December 31, 2020		154,444,851	$	15		—		$	—		—		$	—	$	70,175	$	27,487	$	97,677
Stock-based compensation		—		—		—			—		—			—		5,015		—		5,015
Stock option exercises		204,309		—		—			—		—			—		123		—		123
Net income		—		—		—			—		—			—		—		11,440		11,440
March 31, 2021		154,649,160	$	15		—		$	—		—		$	—	$	75,313	$	38,927	$	114,255


	Common Stock				Class A Common Stock					Class B Common Stock					Additional				Total Stockholders'
	Shares		Amount		Shares			Amount		Shares			Amount		Paid-in Capital		Retained Earnings		Equity
December 31, 2021		—	$	—		152,098,257		$	15		12,158,187		$	1	$	227,626	$	17,931	$	245,573
Issuance of Class A Common Stock upon vesting of Restricted Stock		—		—		381,973			—		—			—		—		—		—
Issuance of Class B Common Stock upon exchange of Class A Common Stock		—		—		(338,152	)		—		338,152			—		—		—		—
Issuance of Class A Common Stock upon exchange of Class B Common Stock		—		—		6,300,000			—		(6,300,000	)		—		—		—		—
Stock-based compensation		—		—		—			—		—			—		8,477		—		8,477
Stock option exercises		—		—		88,610			—		—			—		352		—		352
Net income		—		—		—			—		—			—		—		8,899		8,899
March 31, 2022		—	$	—		158,530,688		$	15		6,196,339		$	1	$	236,455	$	26,830	$	263,301

The accompanying notes are an integral part of these unaudited financial statements.

FIGS, INC.

STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three months ended March 31,
	2022			2021
Cash flows from operating activities:
Net income	$	8,899		$	11,440
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization expense		375			318
Deferred income taxes		(406	)		453
Non-cash operating lease cost		374			—
Stock-based compensation		8,477			5,015
Changes in operating assets and liabilities:
Accounts receivable		(469	)		2,231
Inventory		(16,697	)		(15,435	)
Prepaid expenses and other current assets		(3,857	)		2,902
Other assets		(185	)		(1,785	)
Accounts payable		2,372			4,249
Accrued expenses		(560	)		8,054
Deferred revenue		9			(1,503	)
Accrued compensation and benefits		(2,371	)		(2,128	)
Returns reserve		(233	)		296
Sales tax payable		607			935
Income tax payable		(3,648	)		1,235
Gift card liability		(315	)		(142	)
Deferred rent and lease incentive		—			(26	)
Operating lease liabilities		(389	)		—
Net cash (used in) provided by operating activities		(8,017	)		16,109
Cash flows from investing activities:
Purchases of property and equipment		(364	)		(528	)
Net cash used in investing activities		(364	)		(528	)
Cash flows from financing activities:
Proceeds from stock option exercises		352			123
Net cash provided by financing activities		352			123
Net (decrease) increase in cash, cash equivalents, and restricted cash		(8,029	)		15,704
Cash, cash equivalents, and restricted cash, beginning of period		197,430			58,133
Cash, cash equivalents, and restricted cash, end of period	$	189,401		$	73,837
Supplemental disclosures:
Property and equipment included in accounts payable and accrued expenses	$	149		$	73
Deferred offering costs included in accounts payable and accrued expenses	$	—		$	1,796

The accompanying notes are an integral part of these unaudited financial statements.

FIGS, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS

FIGS, Inc. (the “Company”), a Delaware corporation, was founded in 2013 and is a founder-led, direct-to-consumer healthcare apparel and lifestyle brand company. The Company designs and sells scrubwear, and other non-scrub offerings, such as lab coats, underscrubs, outerwear, activewear, loungewear, compression socks, footwear and masks. The Company markets and sells its products primarily in the United States. Sales are primarily generated through the Company’s digital platforms.

Impact of COVID-19

The ongoing COVID-19 pandemic has caused significant disruption in the international and United States economies and financial markets. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, global supply chain interruptions and overall economic and financial market instability.

In response to public health directives and orders, and to help minimize the risk of the virus to employees, the Company has taken precautionary measures, including implementing work from home policies for certain employees. The COVID-19 pandemic has also negatively impacted global supply chains and caused challenges to logistics, including causing ocean freight reliability and capacity issues, increased volatility in ocean freight transit times, port congestion, increased ocean and air freight rates, labor shortages and ocean freight delays, and has impacted the Company’s manufacturing supply chain, distribution, logistics and other services. The COVID-19 pandemic may continue to adversely affect workforces, supply chains, economies and financial markets globally, potentially leading to an economic downturn and a reduction in consumer spending or an inability for the Company's suppliers, vendors or other parties with whom it does business to meet their contractual obligations, any of which could negatively impact the Company's business and results of operations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. The Company’s fiscal year ends on December 31. Certain information and footnote disclosures normally included in the Company’s annual audited financial statements and accompanying notes have been condensed or omitted in these accompanying interim financial statements and footnotes. Certain reclassifications have been made to prior-year amounts to conform to the current period presentation. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2022.

In the opinion of management, the unaudited financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022.

Stock Split

On May 19, 2021, the Company effected a nine-for-one forward stock split of its issued and outstanding common stock, stock options and restricted stock units. Accordingly, all share and per share information has been retroactively adjusted to reflect the stock split for all periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. Significant estimates include, but are not limited to, the valuation of the net realizable value of inventory, reserves for sales returns, allowances for doubtful accounts, stock-based compensation, contingent sales tax liability, and the useful lives and recoverability of long-lived assets. Actual results could differ from those estimates.

Restricted Cash

Restricted cash consists of cash collateral amounts pledged to secure the Company's reimbursement obligations under its outstanding letters of credit.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the accompanying balance sheets that sum to the total of the same such amounts shown in the statements of cash flows (in thousands):


	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	189,401	$	195,374
Restricted cash		—		2,056
Total cash, cash equivalents, and restricted cash	$	189,401	$	197,430

Inventory, Net

Inventory consists of finished goods and is accounted for using an average cost method. Inventory is valued at the lower of cost or net realizable value. The Company records a provision for excess and obsolete inventory to adjust the carrying value of inventory based on assumptions regarding future demand for the Company’s products.

Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration, and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence, or impaired inventory. Excess and obsolete inventory is charged to cost of goods sold.

The Company’s allowance to write down inventory to the lower of cost or net realizable value was $0.3 million and $0.4 million as of March 31, 2022 and December 31, 2021, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company recognizes revenue from the commercial sales of products and contracts by applying the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations of the contract(s); (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract(s); and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the good or services it transfers to the customer. The Company recognizes revenue at a point in time when it satisfies a performance obligation and transfers control of the products to the respective customers, which occurs when the goods are transferred to a common carrier. Shipping and handling costs associated with outbound freight incurred to transfer a product to a customer are treated as a fulfillment activity, and as a result, any fees received from customers are included in the transaction price for the performance obligation of providing goods to the customer.

The Company generally provides refunds for goods returned within 30 days from the original purchase date. A returns reserve is recorded by the Company based on the historical refund pattern. The returns reserve on the balance sheets was $2.5 million and $2.8 million as of March 31, 2022 and December 31, 2021, respectively.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The Company records deferred revenue when it receives payments in advance of the transfer of the goods to a common carrier. The amounts recorded are expected to be recognized as revenue within the 12 months following the balance sheet and, therefore, are classified as current liabilities in the balance sheets.

The Company does not have significant contract balances other than deferred revenue, the allowance for sales returns and liabilities related to its gift cards. The Company does not have significant contract acquisition costs.

The following table presents the disaggregation of the Company’s net revenues for the three months ended March 31, 2022 and 2021 as follows (in thousands):


	Three months ended March 31,
	2022		2021
By geography:
United States	$	101,418	$	81,607
Rest of the world		8,682		5,472
	$	110,100	$	87,079
By product:
Scrubwear	$	90,467	$	76,215
Non-Scrubwear/Lifestyle		19,633		10,864
	$	110,100	$	87,079

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016- 02, Leases (Topic 842), as subsequently amended, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors), and replaces the existing guidance in ASC 840, Leases. The new standard requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. ASU 2018-11 provides entities another option for transition, allowing entities to not apply the new standard in the comparative periods they present in their financial statements in the year of adoption. Effective January 1, 2022, the Company adopted ASU 2016-02 using the optional transition method provided by ASU 2018-11. The Company elected certain practical expedients permitted under the transition guidance, including the election to carryforward historical lease classification and the short-term lease practical expedient. In addition, the Company elected the lease and non-lease components practical expedient, which allowed it to calculate the present value of fixed payments without performing an allocation of lease and non-lease components. Adoption of the new standard resulted in the recognition of operating lease right-of-use assets and operating lease liabilities of approximately $12.9 million and $16.5 million, respectively, on the Company’s balance sheet as of January 1, 2022. The standard did not have a material impact to the Company’s statements of operations and comprehensive income or cash flows. Refer to Note 9 for the Company’s expanded disclosures on leases.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”). ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. In April 2019, the FASB issued clarification to ASU 2016-13 within ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. This update is effective for entities other than public business entities, including emerging growth companies that elected to defer compliance with new or revised financial accounting standards until a company that is not an issuer is required to comply with such standards, for annual reporting periods beginning after December 15, 2021. The Company adopted ASU 2016-13 on January 1, 2022 and noted no material effect to its financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This update is effective for entities other than public business entities, including emerging growth companies that elected to defer compliance with new or revised financial accounting standards until a company that

is not an issuer is required to comply with such standards, for annual reporting periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. The Company adopted ASU 2019-12 on January 1, 2022 and noted no material effect to its financial statements and related disclosures.

3. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

As of March 31, 2022, and December 31, 2021, the Company’s cash equivalents consisted of money market funds, classified as Level 1 financial assets, as these assets are valued using quoted market prices in active markets without any valuation adjustment. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement as of
	March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	141,125	$	—	$	—	$	141,125
	$	141,125	$	—	$	—	$	141,125


	Fair Value Measurement as of
	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	141,104	$	—	$	—	$	141,104
	$	141,104	$	—	$	—	$	141,104

FIGS, Inc. [FIGS] Filings
10-Q	[2022-05-12]
10-K	[2022-03-10]
10-Q	[2021-11-10]
S-1	[2021-09-14]
10-Q	[2021-08-12]
S-1	[2021-05-05]