Our business faces significant risks and uncertainties.
−Removed: In evaluating our business, in addition to the risks and uncertainties discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein.
+Added: In evaluating our business, in addition to the matters discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein.
If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations.
+Added: These risks may occur individually or in combination, and the occurrence of one risk could exacerbate the impact of others.
As a result, the market price of our securities could decline.
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Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.
+Added: The risks described herein are not presented in order of importance, and we cannot assure you that our mitigation efforts will be effective in preventing or reducing the impact of any of these risks,
Risks Related to Our Business and Industry
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We generate revenue primarily through the sale of in-game virtual currency.
+Added: Our monetization model depends on players’ willingness to make discretionary purchases of virtual currency and other in-game items, and is subject to evolving regulatory scrutiny, platform policies, and consumer protection standards applicable to in-game purchases and virtual currency mechanics.
For games distributed through third-party platforms, we are required to share a portion of our revenue from in-game sales with the platform providers.
−Removed: Due to our focus on mobile gaming, these costs are expected to remain a significant operating expense.
+Added: As a result of our focus on mobile gaming and third-party distribution platforms, platform fees and revenue share arrangements are expected to remain a significant operating expense and may increase over time.
See “ Risk Factors—We rely on third-party platforms such as the Apple App Store, Google Play Store, Amazon Appstore, and Facebook to make our games available to players and collect revenues generated on such platforms, and we rely on third-party payment service providers to collect revenues generated on our own platforms .” In order to achieve and maintain profitability, we need to generate sufficient revenue from our existing and new game offerings to offset our ongoing development, marketing, and operating costs.
−Removed: Successfully monetizing “free-to-play” games is difficult and requires that we deliver engaging and entertaining player experiences that a sufficient number of players will pay for or we are able to otherwise sufficiently monetize our games.
+Added: Successfully monetizing “free-to-play” games is difficult, highly competitive, and increasingly subject to regulatory, platform, and consumer scrutiny.
The success of our games depends, in part, on unpredictable and volatile factors beyond our control including player preferences and spending habits, competing games, and the availability of other entertainment experiences.
If our games do not meet player expectations, or if new games are not brought to market in a timely and effective manner, our ability to grow revenue and our financial performance will be negatively affected.
+Added: In addition, a relatively small percentage of our players account for a disproportionate amount of our revenue, and any reduction in engagement or spending by these players could materially affect our operating results.
Our ability to successfully develop games for mobile and web platforms and their ability to achieve commercial success will depend on our ability to:
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• achieve benefits from our player acquisition costs;
+Added: • manage player acquisition costs in an environment of increasing competition and advertising platform changes;
• achieve organic growth and gain player interest in our games through free or more efficient channels;
• adapt to changing player preferences and spending habits;
+Added: • adapt to regulatory developments, platform requirements, and consumer protection expectations affecting in-game monetization and virtual currency;
• negotiate with third parties to provide our players with a diverse inventory of real-world loyalty rewards;
• achieve and maintain player engagement within our games;
+Added: • manage portfolio dynamics, including potential cannibalization among our own titles;
• expand and enhance games after their initial release;
+Added: • manage the lifecycle of our portfolio, including sustaining mature titles while introducing new content and features;
• attract, retain, and motivate talented and experienced game designers, product managers, engineers, digital marketing managers, and user acquisition experts;
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• compete successfully against a large and growing number of existing market participants;
+Added: • respond effectively to emerging business models, including sweepstakes-based casino-style games and other alternative monetization formats;
• accurately forecast the timing and expense of our operations, including game and feature development, marketing and player acquisition, player adoption, and revenue growth;
+Added: • maintain effective data analytics capabilities in light of evolving privacy laws and platform data limitations;
• minimize and quickly resolve bugs or outages;
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These and other uncertainties make it difficult to know whether we will succeed in continuing to develop successful games and live operations services and launch new games and features in accordance with our operating plan.
−Removed: If we do not succeed in doing so, our business, financial condition, results of operations, and reputation will suffer.
−Removed: If we are able to develop new games and features that achieve success, it is possible that these new games and features could divert players of our other existing games without growing our overall player base, which could harm operating results.
−Removed: Although it is important to our future success that we develop new games and features that are popular with players, it is possible that new games and features may reduce the amount of time players spend with our other games without increasing their overall playing time or purchases.
−Removed: In particular, we plan to continue leveraging our existing games to cross-promote new games and features, which may encourage players of existing games to divert some of their playing time and discretionary spending away from our existing games.
−Removed: If new games and game features do not grow our player base, increase the overall amount of time our players spend with our games, or generate sufficient new revenue to offset any declines from our other games, our revenue could be adversely affected.
+Added: If we are unable to successfully develop, launch, and operate engaging and compliant games on a sustained basis, our business, financial condition, results of operations, cash flows, and reputation could be materially adversely affected.
+Added: If we successfully develop new games and features, they may cannibalize engagement or revenue from our existing games without expanding our overall player base or increasing total revenue.
+Added: Although the development and launch of new games and features is important to our long-term growth strategy, new releases may draw player engagement, time, and spending away from our existing games.
+Added: In addition, the introduction of new games or major feature updates may accelerate the lifecycle decline of certain mature titles, particularly if player migration is not offset by incremental monetization or acquisition of new users.
+Added: We intend to leverage our existing player base and portfolio to cross-promote new games and features, which may shift player activity and spending within our portfolio rather than expanding overall engagement.
+Added: If new games and game features do not grow our player base, increase the overall amount of time our players spend with our games, or generate sufficient new revenue to offset any declines from our other games, or if new games have different monetization characteristics, lower margins, or higher marketing requirements than our existing portfolio, our revenue, profitability, and operating results could be adversely affected.
+Added: In addition, internal competition for development resources, marketing spend, and management focus among our titles could limit our ability to optimize performance across our portfolio.
We believe that our players’ level of engagement with our games is partly based on playAWARDS, our real-world rewards loyalty program.
−Removed: If we fail to expand and diversify our playAWARDS program, or external events make it difficult for our players to consume real-world rewards, our business may suffer.
+Added: If we are unable to maintain, expand or diversify our playAWARDS program, or if external factors reduce the perceived value or usability of real-world rewards, our business may suffer.
Players accumulate loyalty points by engaging with our games, and players can exchange their loyalty points for real-world rewards through our playAWARDS program.
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For example, through an agreement with MGM Resorts International, or MGM, our players are able to exchange loyalty points for, among other things, free hotel rooms, meals and show tickets for various Las Vegas properties, including ARIA, Bellagio, and MGM Grand.
+Added: A meaningful portion of the perceived value of our playAWARDS program depends on a limited number of significant rewards partners, including MGM.
+Added: As a result, changes in the availability, pricing, terms, or perceived attractiveness of rewards offered by one or more key partners could disproportionately affect player engagement and monetization.
While we offer some digital rewards, many of our real-world rewards are destination based.
During the COVID-19 pandemic, we observed a lower level of rewards redemption due to restrictions on the operations of rewards partners and on the ability for players to travel or attend public events, and while such restrictions have been lifted, we could experience a reduced level of rewards redemption as a result of unanticipated future circumstances that have the effect of restricting travel or the in-person attendance of public events.
+Added: Similar effects could result from economic downturns, changes in consumer discretionary spending, labor disruptions at partner venues, supply constraints, geopolitical events, natural disasters, or other circumstances that reduce travel, entertainment attendance, or hospitality activity.
If we are unable to expand and diversify our playAWARDS program, the perceived value of exchanging loyalty points for the real-world rewards we offer will diminish and our players may be less likely to play our games or may reduce their level of engagement with our games.
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The loss of MGM or other major rewards partners, a decrease in the quantity or quality of available rewards, or a significant change in the terms of our reward partner agreements, could materially diminish the appeal of our playAWARDS program to players, which could in turn reduce player engagement and monetization across our portfolio.
−Removed: If we are unable to maintain or enhance our rewards inventory, our competitive advantage would be diminished, potentially resulting in reduced revenue and profitability.
−Removed: The COVID-19 pandemic and containment efforts across the globe significantly impacted our business, and the extent to which any future pandemics, health epidemics or contagious disease outbreaks will impact our future results of operations and overall financial performance remains uncertain.
−Removed: The COVID-19 pandemic and related containment and mitigation efforts, including social distancing, shelter-in-place, quarantine and similar policies, practices and governmental orders, resulted in widespread disruption in global economies, productivity, and financial markets and materially altered our day-to-day business operations.
−Removed: Any future pandemics, public health epidemics, disease outbreaks, medical emergencies, or other public health crises outside of our control could have a negative impact on our business.
−Removed: During the COVID-19 pandemic, we took various precautionary measures intended to minimize the risk of COVID-19 to our employees.
−Removed: Those measures included temporarily closing our offices around the world (including our corporate headquarters in Las Vegas, Nevada) and implementing travel restrictions for our employees.
−Removed: Although our facilities have all since reopened, our business may be negatively impacted if we are faced with a similar future event, such as a pandemic, public health epidemic, disease outbreak, or other public health crisis, that requires us to implement precautionary measures, which may include temporary closures of some or all of our facilities, travel restrictions, and other measures that could be disruptive to our normal business operations.
−Removed: During a pandemic, health epidemic or contagious disease outbreak, we may not be able to provide the same level of product features and customer support that our players expect from us, which could negatively impact our business and operations.
−Removed: While substantially all of our business operations can be performed remotely, many of our employees who work remotely might have to balance additional work-related and personal challenges, including adjusting communication, technical and work expectations, and challenges to collaborate in a hybrid environment with work colleagues and business partners.
−Removed: In addition to the potential direct impacts to our business, the global economy could be significantly weakened as a result of the actions taken in response to any future pandemic, health epidemic or contagious disease outbreak, and future government intervention remains uncertain.
−Removed: A weakened global economy may impact our players’ purchasing decisions within our games, in particular given the limitations of redeeming real-world rewards due to government mandated or other restrictions on travel and other activities and limitations on our players’ discretionary spending, consumer activity during the pandemic and its impact on advertising investments, and the ability of our business partners, including our rewards partners that provide the real-world rewards available in our games, to navigate a complex social, health, and economic environment, any of which could result in disruption to our business and results of our operations.
−Removed: The duration and extent of the impact on our business from any future pandemics, health epidemics or contagious disease outbreaks will depend on future developments that cannot accurately be predicted at this time, such as the existence of any additional waves of any pandemic, epidemic, or outbreak, disease severity and transmission rates, the impact of new disease variants, the extent and effectiveness of mitigation and containment actions, progress towards widespread rapid testing, effective treatment alternatives and the adoption and efficacy of available vaccines, and the impact of these and other factors on our employees, players, and business partners.
−Removed: If we are not able to respond to and manage the impact of such events effectively, our business may be harmed.
−Removed: To the extent any future pandemic, health epidemic or contagious disease outbreak adversely affects our business and financial results, it may also have the effect of heightening many of the other risks to our business described herein.
+Added: While we offer some digital or non-destination-based rewards, expanding or shifting our rewards mix toward alternative reward types may not fully offset reduced demand for destination-based rewards or may not be perceived by players as having comparable value.
+Added: If we are unable to maintain or enhance our rewards inventory, the differentiation provided by our playAWARDS program could be diminished, potentially resulting in reduced revenue and profitability.
Our industry is very competitive.
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In addition, there are competitors that develop mobile and web games that are not currently focused on the social casino gaming category but may move into that space and that may also impede our diversification efforts, including companies such as Activision Blizzard (owned by Microsoft Corporation and the parent company of King Digital), Electronic Arts (EA Mobile), Epic Games, Netmarble (the parent company of Jam City and Kabam), NetEase (NetEase Games), Niantic, Take-Two Interactive Software, Vivendi (the parent company of Gameloft), and others.
−Removed: In addition, online game developers and distributors that are primarily focused on
−Removed: specific international markets, such as Giant Interactive and Tencent in Asia, and high-profile companies with significant online presences that to date have not actively focused on social games, such as Facebook, Apple, Google, Amazon, and Netflix, may decide to develop social games including social casino games which may compete with our games.
+Added: In addition, online game developers and distributors that are primarily focused on specific international markets, such as Giant Interactive and Tencent in Asia, and high-profile companies with significant online presences that to date have not actively focused on social games, such as Facebook, Apple, Google, Amazon, and Netflix, may decide to develop social games including social casino games which may compete with our games.
Some of these current and potential competitors have significant resources for developing, enhancing or acquiring additional games or gaming companies, may be able to incorporate their own strong brands and assets into their games, may have a more diversified set of revenue sources than we do and may be less severely affected by changes in player preferences, regulations or other developments that may impact our industry.
+Added: In addition, platform operators and app stores, including Apple and Google, control distribution, promotion, ranking algorithms, and payment processing for mobile games.
+Added: Changes to platform policies, discovery algorithms, fee structures, privacy rules, or monetization restrictions may disproportionately benefit larger competitors or negatively impact our ability to attract and retain players on cost-effective terms.
Furthermore, certain competitors of our social casino games may provide real-money gambling offerings, which could negatively impact demand for our social casino games.
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The proliferation of titles in these open developer channels makes it difficult for us to compete for players without substantially increasing our marketing expenses.
+Added: In addition, increased competition for user acquisition channels, changes in digital advertising policies (including privacy-related restrictions), and the concentration of performance marketing inventory among a limited number of large technology platforms may increase our player acquisition costs and reduce the effectiveness of our marketing spend.
We also face competition for the leisure time, attention, and discretionary spending of our players from other non-gaming activities, such as social media and messaging applications, personal computer and console games, virtual reality and augmented reality games, video streaming services, television, movies, sports, and the Internet.
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Our competitors may adapt to an emerging technology or business model more quickly or effectively, developing products and games or business models that are more technologically advanced, more appealing to consumers, or both.
−Removed: The emergence of “sweepstakes casino” games, which are similar to social casino games but incorporate sweepstakes as a primary user acquisition and monetization tool in the game, could pose a competitive threat to our social casino games and harm our results of operations.
+Added: Competitors also may experiment with alternative monetization models, including hybrid real-money gaming, skill-based wagering, or reward-based structures, which could alter player expectations and reduce engagement with traditional social casino formats.
+Added: The continued growth of “sweepstakes casino” games, which typically incorporate promotional sweepstakes mechanics and may offer cash-equivalent prizes, has intensified competition within the broader social casino category.
+Added: To the extent such offerings attract players seeking alternative monetization structures or prize opportunities, demand for our traditional social casino games could be adversely affected.
+Added: For a discussion of regulatory risks associated with sweepstakes-style offerings, see “Risk Factors — Our traditional social casino business has experienced declining performance, which we believe is attributable in significant part to increased competition from sweepstakes-based casino offerings, and this trend may continue or accelerate."
Current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others, including our current or future business partners or third-party software providers.
−Removed: By doing so, these competitors may increase their scale, their ability to meet the needs of existing or prospective players and compete for similar human resources.
−Removed: If we are unable to compete effectively, successfully and at a reasonable cost against our existing and future competitors, our results of operations, cash flows and financial condition would be adversely impacted.
−Removed: We rely on a small portion of our total players for a substantial amount of our revenue and if we fail to grow our player base, or if player engagement declines, our revenue and operating results will be harmed.
+Added: By doing so, including through vertical integration of development, marketing, analytics, and platform capabilities, these competitors may increase their scale, their ability to meet the needs of existing or prospective players and compete for similar human resources.
+Added: If we are unable to compete effectively and efficiently against our existing and future competitors, our results of operations, cash flows and financial condition would be adversely impacted.
+Added: Our traditional social casino business has experienced declining performance, which we believe is attributable in significant part to increased competition from sweepstakes-based casino offerings, and this trend may continue or accelerate.
+Added: social casino market has experienced increasing competitive pressure in recent years, including a material shift in player engagement and spending toward games that incorporate sweepstakes-based promotional mechanics.
+Added: Our traditional social casino games, which do not include sweepstakes-based features, have experienced declining performance over the past several years, consistent with broader market trends.
+Added: We believe this decline is attributable in significant part to increased competition from sweepstakes casino alternatives that offer similar gameplay experiences combined with the opportunity to win real-world prizes through promotional sweepstakes structures.
+Added: Sweepstakes-based casino offerings have gained traction with players by providing gameplay mechanics that resemble traditional social casino games while offering differentiated value propositions, including perceived real-world value, alternative monetization dynamics, and different player acquisition and retention economics.
+Added: As these offerings have proliferated, players may increasingly migrate away from traditional social casino games toward sweepstakes-based alternatives.
+Added: This migration may reduce player engagement, monetization, and lifetime value within our traditional social casino portfolio, even if overall interest in casino-style gameplay remains strong.
+Added: The competitive impact of sweepstakes-based offerings may be particularly pronounced because these products can attract players who previously engaged with traditional social casino games, including high-value and repeat players.
+Added: In addition, marketing and advertising spend across the broader social casino ecosystem has increasingly been directed toward sweepstakes-based products, which may further disadvantage traditional social casino games by increasing player acquisition costs, reducing organic discovery, and compressing returns on advertising spend.
+Added: As a result, even if we maintain or increase marketing investment in our traditional social casino games, we may be unable to offset declining demand or achieve historical levels of growth or profitability.
+Added: If the shift in player preferences toward sweepstakes-based casino offerings continues or accelerates, our traditional social casino business could experience further revenue declines, reduced margins, and impairment of long-lived assets or game-related intangible assets.
+Added: In addition, declining performance in our traditional social casino portfolio could limit our ability to reinvest in live operations, content updates, and marketing for those games, potentially creating a negative feedback loop that further accelerates player attrition and revenue erosion.
+Added: While we are taking steps to respond to these market dynamics, including by evaluating and deploying sweepstakes-based promotional mechanics within certain games in our portfolio, there can be no assurance that these efforts will fully offset declines in our traditional social casino business or that such offerings will be successful, sustainable, or economically comparable to historical monetization models.
+Added: Moreover, regulatory, platform, or third-party constraints applicable to sweepstakes-based mechanics could limit our ability to deploy or scale such features in ways that meaningfully mitigate the decline in traditional social casino performance.
+Added: If we are unable to adapt effectively to the evolving competitive landscape or if player demand continues to shift away from traditional social casino games, our business, financial condition, results of operations, and long-term growth prospects could be materially adversely affected.
+Added: We rely on a small portion of our total players for a substantial portion of our revenue and fluctuations in player engagement or spending could materially harm our revenue and operating results.
Compared to all players who play our games in any period, only a small portion are paying players.
+Added: As a result, a meaningful portion of our revenue is derived from a relatively small number of highly engaged players.
In order to sustain and grow our revenue levels, we must attract, retain, and increase the number of paying players or more effectively monetize our players through advertising and other strategies.
−Removed: To retain players, we must devote significant resources so that the games they play retain their interest and attract them to our other games.
−Removed: We also organize periodic in-person events for our players and, in addition, provide personal hosting services to our most engaged players, Nevertheless, we might not succeed in our efforts to increase the monetization rates of our players, particularly if we are unable to retain our paying players.
−Removed: If we fail to grow or sustain the number of our paying players, if the rates at which we attract and retain paying players declines, if the average amount our players pay declines, or if we fail to retain and effectively monetize the relatively small number of players that comprise our most highly engaged player tiers, our business may be negatively impacted and our financial results may suffer.
−Removed: A substantial portion of our loyalty rewards and significant intellectual property are obtained from MGM, and any change in that relationship could materially and adversely affect our business and financial results.
−Removed: Although we have a portfolio of entertainment, retail, technology, travel, leisure, and gaming brands across the globe providing rewards through our playAWARDS program, MGM historically has provided a substantial amount of such rewards, and the majority of the rewards redeemed through our playAWARDS program for the year ended December 31, 2024 were offered by MGM.
−Removed: Under the terms of our marketing agreement and rewards agreement with MGM, MGM has discretion over the types and quantities of rewards and whether to make any rewards available for a particular game, and MGM may discontinue any rewards previously made available.
−Removed: The terms of our marketing agreement with MGM requires
−Removed: us to meet certain performance criteria for it to be automatically renewed, and if we fail to meet those performance criteria, MGM could terminate both the marketing agreement and the rewards agreement.
−Removed: If we fail to meet our required performance criteria under the marketing agreement, we could also lose certain intellectual property rights that we license from MGM under the marketing agreement and which we use as creative assets in our games.
−Removed: In the event that MGM offers fewer or less attractive rewards for our games or if we fail to achieve the required performance milestones and MGM decides not to renew our agreements, our business and financial results could be materially and adversely affected.
+Added: Spending patterns of paying players, particularly our most highly engaged players, can fluctuate significantly from period to period and are difficult to predict, To retain players, we must devote significant resources so that the games they play retain their interest and attract them to our other games.
+Added: Players can easily reduce their spending or cease playing our games altogether in favor of competing entertainment options, including other social games, mobile games, or alternative forms of digital entertainment.
+Added: We also organize periodic in-person events for our players and provide personal hosting services to our most engaged players.
+Added: However, these initiatives involve significant costs, and there can be no assurance that they will result in increased engagement or monetization, particularly if we are unable to retain our paying players.
+Added: If we fail to grow or sustain the number of our paying players, if player engagement levels decline, if the rates at which we attract and retain paying players declines, if the average amount our players pay declines, including due to changes in game mechanics, competitive dynamics, or regulatory or platform constraints, or if we fail to retain and effectively monetize the relatively small number of players that comprise our most highly engaged player tiers, our business may be negatively impacted and our financial results may suffer.
+Added: Because a substantial portion of our revenue is derived from a relatively small number of highly engaged players, the loss or reduced spending of any of these players could have a disproportionate adverse effect on our business and results of operations.
+Added: A substantial portion of our loyalty rewards and certain key intellectual property are obtained from MGM, and changes in that relationship could materially and adversely affect our business and financial results.
+Added: Although we have a portfolio of entertainment, retail, technology, travel, leisure, and gaming brands across the globe providing rewards through our playAWARDS program, MGM historically has provided a substantial amount of such rewards, and the majority of the rewards redeemed through our playAWARDS program in recent periods (including the year ended December 31, 2025) have been offered by MGM.
+Added: Under the terms of our marketing agreement and rewards agreement with MGM, MGM has discretion over the types, quantities, timing and availability of rewards and whether to make any rewards available for a particular game, and MGM may discontinue any rewards previously made available.
+Added: The marketing agreement with MGM is subject to automatic renewal only if we meet specified performance criteria, and if we fail to meet those performance criteria, MGM could terminate both the marketing agreement and the rewards agreement.
+Added: If we fail to meet our required performance criteria under the marketing agreement, we could also lose certain licensed intellectual property rights under the marketing agreement that are used as creative assets in certain of our games.
+Added: Even absent termination or non-renewal, reductions in the scope, attractiveness, or economics of the rewards or licensed intellectual property made available by MGM could diminish the appeal of our games and loyalty offerings.
+Added: We may not be able to replace MGM-provided rewards or licensed intellectual property with alternatives on comparable terms, or at all, within a reasonable timeframe.
+Added: In the event that MGM offers fewer or less attractive rewards for our games or if we fail to achieve the required performance milestones and MGM decides not to renew our agreements, our business, player engagement, and financial results could be materially and adversely affected.
We rely on third-party platforms such as the Apple App Store, Google Play Store, Amazon Appstore, and Facebook to make our games available to players and collect revenues generated on such platforms, and we rely on third-party payment service providers to collect revenues generated on our own platforms.
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If we are unable to maintain a good relationship with such platform providers, if their terms and conditions or pricing change to our detriment, if we violate, or if a platform provider believes that we have violated, the terms and conditions of its platform, or if any of these platforms loses market share or falls out of favor, or is unavailable for a prolonged period of time, our business will suffer.
+Added: Because a substantial portion of our revenue and player acquisition is dependent on a limited number of platform providers, any adverse action, policy change, technical disruption, or enforcement decision affecting one or more of these platforms could have a disproportionate adverse impact on our business, financial condition, and results of operations.
We are subject to the standard and non-negotiated policies and terms of service/publisher agreements of third-party platforms, which govern the promotion, distribution, content, and operation generally of games on the platform.
Each platform provider has broad discretion to unilaterally change and interpret its terms of service and other policies with respect to us and other developers, and those changes may be unfavorable to us.
+Added: Platform providers may suspend, remove, or restrict our games or features, temporarily or permanently, with little or no advance notice, including based on their unilateral interpretation of their policies.
A platform provider may also change its fee structure, add fees associated with access to and use of its platform, alter how we are able to advertise on the platform, change how the personal information of its users is made available to application developers on the platform, limit the use of personal information for advertising purposes, or restrict how players can share information with their friends on the platform or across platforms.
−Removed: Any of these changes could be implemented with little or no advance notice, and we may be unable to take action avert or reduce the negative impacts such changes could impose on our business.
+Added: Platform providers may enforce their policies selectively, inconsistently, or retroactively, and we may have limited or no meaningful ability to challenge or appeal such enforcement decisions, Any platform level changes could be implemented with little or no advance notice, and we may be unable to take action avert or reduce the negative impacts such changes could impose on our business.
+Added: In many cases, the terms, policies, and enforcement practices of these platform providers are non-negotiable, and we have limited ability to influence their interpretation, application, or modification.
+Added: As a result, we may be required to comply with changes to platform rules, technical requirements, or business practices even if such changes adversely affect our games, monetization strategies, or operating results.
Our business could be harmed if:
• the platform providers discontinue or limit our access to their platforms;
+Added: • the platform providers suspend, delist, or remove our games or developer accounts, whether temporarily or permanently;
• governments or private parties, such as Internet providers, impose bandwidth restrictions, increase charges, or restrict or prohibit access to those platforms;
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• the platforms decline in popularity;
−Removed: • the platforms adopt changes or updates to their technology that impede integration with other software systems or otherwise require us to modify our technology or update our games in order to ensure players can continue to access our games and content with ease;
+Added: • the platforms adopt changes or updates to their operating systems, APIs, SDKs, privacy frameworks, or technical requirements that impede integration with other software systems or otherwise require us to modify our technology or update our games in order to ensure players can continue to access our games and content with ease;
• the platforms elect or are required to change how they label free-to-play games or take payment for in-game purchases;
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• the platforms change how the personal information of players is made available to developers or develop or expand their own competitive offerings;
+Added: • the platforms apply their policies, guidelines, or enforcement practices in a non-transparent, inconsistent, or discretionary manner, including without meaningful advance notice or effective appeal rights;
+Added: • the platforms impose penalties, warnings, blocks, or other sanctions that impair distribution or monetization without providing clear standards or appeal rights;
+Added: • the platforms modify how applications are discovered, ranked, featured, or recommended to users, which could reduce the visibility of our games, increase player acquisition costs, or negatively impact player engagement;
+Added: • the platforms adopt or enforce policies more restrictively than required by applicable law, including in response to perceived or anticipated regulatory risk;
+Added: • the platforms restrict, discourage, or disadvantage applications that promote or facilitate purchases outside of the platform’s proprietary payment systems, including through direct-to-consumer channels;or
• we are unable to comply with the platform providers’ terms of service.
+Added: Platform providers increasingly act as de facto regulators of digital content and monetization practices and may adopt policies or enforcement positions that go beyond or precede applicable legal requirements.
+Added: In response to actual or perceived regulatory risk, platform providers may impose restrictions, remove content, or require changes to our games or business practices even where such actions are not legally mandated.
+Added: Such measures could materially limit our ability to operate or monetize our games in certain jurisdictions.
In addition, third-party platforms also impose certain file size limitations, which limits our ability to create software with additional features that would result in a larger size than the platform providers would support.
−Removed: Aside from these file size
−Removed: limitations, a larger game file size could cause players to delete our games once the file size grows beyond the capacity of their devices’ storage limitations or could reduce the number of downloads of these games.
+Added: Aside from these file size limitations, a larger game file size could cause players to delete our games once the file size grows beyond the capacity of their devices’ storage limitations or could reduce the number of downloads of these games.
+Added: Larger file sizes may also negatively affect player discovery, conversion rates, and organic installs.
Changes in the respective terms of service or policy changes of third-party platforms may decrease the visibility or availability of our games, limit our distribution capabilities, prevent access to our existing games, reduce the amount of revenue we may recognize from in-game purchases, increase our costs to operate on these platforms, or result in the exclusion or limitation of our games or certain in-game features on such platforms.
Any such changes could adversely affect our business, financial condition, or results of operations.
+Added: Platform providers may take action with respect to specific titles, genres, features, or jurisdictions, including blocking or restricting access in certain regions while allowing continued operation elsewhere.
+Added: Even if such actions affect only a subset of our games or markets, they could materially harm player engagement, revenue, and growth prospects.
Obtaining and maintaining high ratings of our games on the platforms on which we operate are important as they help drive users to find our games.
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Any such decline may lead to loss of users and revenues, additional advertising and marketing costs, and reputation harm.
+Added: Platform providers may also remove, modify, or deprioritize ratings or reviews, or change how ratings are calculated or displayed, in ways that could adversely affect visibility and player acquisition.
+Added: We are also dependent on these platforms for user discovery, distribution, and ongoing access to our player base, and adverse changes to platform algorithms, promotional practices, or technical standards may materially reduce organic installs or engagement even if our games remain available on the platforms.
If our platform providers do not perform their obligations in accordance with our platform agreements, we could be adversely impacted.
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If any of our third-party service providers is unable to process payments, even for a short period of time, our business could be harmed.
+Added: Any actions by platform providers that limit our ability to communicate with players about alternative purchasing options, impose technical or policy restrictions on direct-to-consumer offerings, or otherwise disadvantage off-platform transactions, including through technical, contractual, disclosure, or user-interface restrictions, differential fees, or enforcement actions, could reduce the effectiveness of our direct-to-consumer initiatives and adversely affect our revenue mix and margins.
These platforms and our third-party online payment service providers may also experience security breaches or other issues with their functionalities.
1 unchanged sentence
As jurisdictions in which we operate and their regulatory bodies adopt or modify laws and regulations, our platform providers may adopt restrictive policies or take other adverse action against the Company and its games in connection with their interpretation and implementation of such laws and regulations.
−Removed: If the platform providers took such actions in jurisdictions that are significant to our operations, it could negatively impact our business.
+Added: Similar actions could be taken by platform providers in other jurisdictions or with respect to other titles, including jurisdictions or platforms that are more significant to our business, which could have a material adverse effect on our business, financial condition, and results of operations.
Additionally, if our platform providers were to develop competitive offerings, either on their own or in cooperation with one or more competitors, our growth prospects could be negatively impacted.
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With its expansive customer base and vast resources, Netflix could pose a material competitive threat to the Company’s business.
+Added: Platform providers may also use non-public data, platform insights, or preferential placement to advantage their own offerings or those of select partners.
Increased competition and success of other brands, genres, business models and games could result in, among other things, a loss of players, or negatively impact our ability to acquire new players cost-effectively, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: Because a substantial portion of our revenue is generated through a limited number of platform providers, any adverse change affecting one or more of these platforms could have a disproportionate impact on our business.
If any such events described above occur on a short-term or long-term basis, or if these third-party platforms and online payment service providers otherwise experience issues that impact the ability of players to download or access our games, access social features, or make in-game purchases, it could materially and adversely affect our brands and reputation, as well as our business, financial condition, and results of operations.
−Removed: We rely on third-party hosting and cloud computing providers to operate certain aspects of our business.
−Removed: In particular, a significant portion of our game traffic is hosted by Amazon Web Services, or AWS, and any failure, disruption or significant interruption in our network or hosting and cloud services could adversely impact our operations and harm our business.
+Added: We rely on third-party hosting and cloud computing providers, including Amazon Web Services, and any failure, disruption, or significant interruption in these services could adversely impact our operations and harm our business.
Our technology infrastructure is critical to the performance of our games, the satisfaction of our players, and our corporate functions.
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We own, operate, and maintain elements of this system, but significant elements of this system are operated by third parties that we do not control and which would require significant time and expense to replace.
+Added: In addition to hosting and compute services, we rely on third-party providers for data storage, content delivery, monitoring, and other infrastructure services, further increasing our dependence on external systems that we do not control.
We expect this dependence on third parties to continue.
+Added: A significant portion of our game traffic and computing infrastructure is hosted by a single cloud services provider, Amazon Web Services, or AWS.
+Added: AWS provides us with computing and storage capacity pursuant to an agreement that continues until terminated by either party.
+Added: The agreement provides access to AWS’s standard computing and storage services, subject to AWS’s then-current terms, service levels, and availability.
+Added: Any disruptions, delays, outages and other performance problems caused by AWS could significantly impact our business due to our many services and systems relying on the AWS services.
We have experienced, and may in the future experience, disruptions, outages, and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, and capacity constraints.
−Removed: If any such interruption is significant or prolonged, if a particular game is unavailable when players
−Removed: attempt to access it or navigation through a game is slower than they expect, players may stop playing the game and may be less likely to return to the game as often, if at all.
+Added: If any such interruption is significant or prolonged, if a particular game is unavailable when players attempt to access it or navigation through a game is slower than they expect, players may reduce engagement, stop playing the game, or be less likely to return, which could adversely affect monetization and retention.
A failure or significant interruption in our game service would harm our reputation and operations.
We expect to continue to make significant investments in our technology infrastructure to maintain and improve all aspects of player experience and game performance.
−Removed: To the extent that our disaster recovery systems are not adequate, or we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate increasing traffic, our business and results of operations may suffer.
−Removed: We do not maintain insurance policies covering losses relating to our network or information technology systems, other than losses caused by cybersecurity attacks for which we have limited insurance coverage, which may increase any potential harms that the business may suffer from systems failure or resulting business interruptions.
+Added: To the extent that our disaster recovery systems are not adequate or do not perform as expected in the event of a major outage, or we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate increasing traffic, our business and results of operations may suffer.
+Added: We do not maintain insurance coverage for all losses relating to our network or information technology systems, other than limited cybersecurity insurance, which may increase any potential harms that the business may suffer from systems failure or resulting business interruptions.
In addition, any changes in these third parties’ service levels may adversely affect our ability to meet the requirements of our players.
As our platform’s continuing and uninterrupted performance is critical to our success, sustained or repeated system failures would reduce the attractiveness of our offerings.
−Removed: It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand and the usage of our offerings increases.
+Added: It may become increasingly difficult to maintain and improve our performance, particularly during peak usage times or periods of rapid change in player activity, demand, or game usage patterns.
+Added: Cloud service providers may also be affected by regulatory actions, geopolitical events, widespread cyber incidents, or systemic outages that are outside of our control and could impair their ability to provide services reliably.
Any negative publicity arising from these interruptions, delays, outages, or other performance problems could adversely affect our business, financial condition, results of operations, or reputation.
Furthermore, in the event that any of our agreements with these third-party providers are terminated, we may experience significant costs or downtime in connection with the transfer to, or the addition of, new hosting or cloud computing providers.
−Removed: Although alternative providers could host our platform on a substantially similar basis, such transition could potentially be disruptive and we could incur significant costs in connection with such transition.
−Removed: In particular, a significant portion of our game traffic, data storage, data processing and other computing services and systems is hosted by AWS.
−Removed: AWS provides us with computing and storage capacity pursuant to an agreement that continues until terminated by either party.
−Removed: The agreement requires AWS to provide us their standard computing and storage capacity and related support in exchange for timely payment by us.
−Removed: Any disruptions, delays, outages and other performance problems caused by AWS could significantly impact our business due to our many services and systems relying on the AWS services.
−Removed: We have engaged, and expect to engage, third-party game development companies to develop and operate certain mobile games, including myVEGAS Bingo, POP!
−Removed: Slots, MGM Slots Live, and my Konami Slots, and if they fail to perform as expected, our business may suffer.
+Added: Although alternative providers may be able to host our platform on a substantially similar basis, we may not be able to transition services without significant disruption, delay, or increased cost.
+Added: We have engaged, and expect to engage, third-party game development companies to develop and operate certain of our mobile games, and if they fail to perform as expected, our business may suffer.
We currently, have in the past, and expect in the future to, engage third-party game development companies to develop and operate certain mobile games on our behalf.
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In each instance, we have been, and in the future intend to be, the publisher of our existing games as well as third-party developed or co-developed games when they are available to players through platforms such as the Apple App Store, Google Play Store, Amazon Appstore, and Facebook.
−Removed: However, in some cases much of the responsibility to develop and operate our games will be undertaken by the development company.
−Removed: Typically when we engage a third-party game development company, we will enter into a contract with them that defines their and our duties and responsibilities.
+Added: In some cases, a substantial portion of the responsibility to develop, operate, and maintain a game is undertaken by the third-party development company, Typically when we engage a third-party game development company, we will enter into a contract with them that defines their and our duties and responsibilities.
With a third-party game development company, we have limited control over the work performed by the development company and are therefore subject to risks that differ from, and might be greater than, those we are subject to when our own employees are developing and operating our games.
For example, limited control over work being performed could materially and adversely impact the timely development and completion of our games, and their publication could be delayed due to the development company’s failure to adhere to our milestones and roadmaps.
−Removed: We have in the past experienced this risk when one of our third-party game development companies failed to complete development milestones in accordance with our game development roadmap.
−Removed: If our third-party game development companies do not perform in accordance with our agreements with them, it could adversely affect the development of our games that are the subject of that agreement, including delaying their availability for launch and their performance once launched, which could materially and adversely impact our ability to meet our forecasts.
+Added: We have experienced instances in the past in which third-party development companies failed to complete development milestones in accordance with agreed timelines.
+Added: If our third-party game development companies do not perform in accordance with our agreements with them, it could adversely affect the development of our games that are the subject of that agreement, including delaying their availability for launch and their performance once launched, which could materially and adversely affect our operating results and our ability to achieve anticipated performance.
Once a co-developed game is launched, or in the event we engage a third party to operate an existing game, we will be reliant on the development company’s ability to maintain an adequate number of knowledgeable and experienced personnel to operate and maintain the co-developed game or existing game successfully and to develop and implement future game updates, patches and bug fixes, as well as provide ongoing support services.
−Removed: If the development companies fails to operate and maintain the co-developed game or existing game, it could adversely affect that game's performance and player satisfaction, and our business might suffer as a result.
−Removed: Further, if the game development companies breached our agreements
−Removed: with them, or unilaterally elected to discontinue providing services, we would have to find a substitute provider or replace the lost services internally, which could disrupt the operation of the games and result in dissatisfied players, increased expenses, lost revenues, and other adverse effects.
+Added: If a development company fails to operate and maintain the co-developed game or existing game, including through inadequate staffing, loss of key personnel, or competing priorities, it could adversely affect that game's performance and player satisfaction, and our business might suffer as a result.
+Added: Further, if the game development companies breached our agreements with them, or unilaterally elected to discontinue providing services, we would have to find a substitute provider or replace the lost services internally, which could disrupt the operation of the games and result in dissatisfied players, increased expenses, lost revenues, and other adverse effects.
+Added: We may not be able to identify or transition to a substitute provider, or internalize development and operational responsibilities, on commercially reasonable terms or without material disruption.
We do not own or have direct control of the source code of the third-party developed games, but we endeavor to have source code escrow agreements in place under which the source code and operation documentation of such co-developed games will be held in escrow.
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In such cases, we will seek to obtain licenses to use the intellectual property as integrated with and into the co-developed game in order to continue operating the game if our agreement with the co-developer terminates or expires and we wish to continue publishing the co-developed game.
−Removed: If we are unable to obtain such a license, or if the third-party game developer challenged our right to use its intellectual property or the manner in which we use such intellectual property, it could materially and adversely affect our ability to continue to publish the co-developed game.
−Removed: If we do not successfully invest in, establish and maintain awareness of our brands and games, or if we incur excessive expenses promoting and maintaining our brands or our games, our business, financial condition, results of operations, or reputation could be harmed.
+Added: If we are unable to obtain such a license, or if a third-party developer were to challenge our rights to use its intellectual property, or assert claims regarding the scope or manner of such use, it could materially and adversely affect our ability to continue to publish the co-developed game.
+Added: If we are unable to effectively invest in, maintain, and enhance awareness of our brands and games, or if our brand-related marketing expenditures are inefficient or excessive, our business, financial condition, results of operations, or reputation could be harmed.
We believe that establishing and maintaining our brands is critical to maintaining and creating favorable relationships with players, rewards partners, content licensors, and advertisers, as well as competing for key talent.
−Removed: Increasing awareness of our brands and recognition of our games is particularly important in connection with our strategic focus on developing games based on our own intellectual property and successfully cross-promoting our games.
−Removed: In addition, globalizing and extending our brands and recognition of our games requires significant investment and extensive management time to execute successfully.
−Removed: Although we make significant sales and marketing expenditures in connection with the launch of our games, these efforts may not succeed in increasing awareness of our brands or the new games.
−Removed: If we fail to increase and maintain brand awareness and consumer recognition of our games, our potential revenue could be limited, our costs could increase, and our business, financial condition, results of operations, or reputation could suffer.
+Added: Maintaining awareness of our brands and recognition of our games is particularly important to supporting engagement across our portfolio and enabling effective cross-promotion among our games.
+Added: In addition, maintaining and, where appropriate, extending recognition of our brands and games across markets requires significant investment and extensive management time to execute successfully.
+Added: Although we make significant sales and marketing expenditures, the effectiveness of such expenditures may diminish over time, including due to increased competition for player attention, changes in advertising platforms or algorithms, privacy restrictions, or rising player acquisition costs.
+Added: Sales and marketing expenditures in connection with the launch of our games may not succeed in increasing awareness of our brands or the new games.In addition, negative publicity, player dissatisfaction, platform actions, or regulatory scrutiny could harm our brands or reputation, even if unrelated to the quality of our games.If we fail to increase and maintain brand awareness and consumer recognition of our games, our potential revenue could be limited, our costs could increase, and our business, financial condition, results of operations, or reputation could suffer.
We strive to establish and maintain our brands by obtaining trademark rights, including for our games.
−Removed: However, if our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our competitive position, business, financial condition, or results of operations may be harmed.
−Removed: Our ability to acquire and maintain licenses to intellectual property may affect our revenue and profitability.
−Removed: Competition for these licenses may make them more expensive and increase our costs.
+Added: Protecting and enforcing our intellectual property rights can be costly and time-consuming, and we may be unable to prevent third parties from using similar marks or engaging in conduct that dilutes or harms our brands.
+Added: However, if our trademarks and trade names are not adequately protected, enforced or recognized in relevant jurisdictions, we may not be able to build name recognition in our markets of interest and our competitive position, business, financial condition, or results of operations may be harmed.
+Added: Our ability to acquire and maintain licenses to third-party intellectual property may affect our revenue, profitability, and competitive position.
Much of the intellectual property we use in our games is created by us, but we also rely on licenses or rights we receive to third-party intellectual property for use in our games or platform to enhance the experience of our players or otherwise operate our business.
−Removed: For example, we use licensed intellectual property from certain parties such as MGM, Tetris®, and Konami Gaming in our games and for marketing and promoting our games.
−Removed: These licenses typically limit our use of intellectual property to specific uses and for specific time periods, and include other contractual obligations, including the achievement of certain performance milestones with which we must comply in order for the license to remain in effect.
−Removed: Moreover, certain intellectual property rights may be licensed to us on a non-exclusive basis, and accordingly, the owners of such intellectual property are free to license such rights to third parties, including our competitors, on terms that may be superior to those offered to us, which could place us at a competitive disadvantage.
−Removed: Competition for these licenses is intense, and often results in one or more of increased advances, minimum payment guarantees, and royalties that we must pay to the licensor, which decreases our profitability.
−Removed: In the future, we may identify additional third-party intellectual property we may need or desire to license in order to engage in our business, including to develop or commercialize new games.
+Added: For example, we use licensed intellectual property from third parties in certain of our games and for marketing and promotional purposes, including well-known entertainment and gaming brands such as MGM, Tetris®, and Konami Gaming.
+Added: Such licenses often involve significant upfront payments, ongoing royalties, minimum guarantees, or other financial commitments that can increase our operating costs and reduce margins.
+Added: These licenses typically limit our use of intellectual property to specific uses and for specific time periods, and include other contractual obligations, including performance, distribution, or operational milestones with which we must comply to maintain the license.
+Added: Moreover, certain intellectual property rights may be licensed to us on a non-exclusive basis, and accordingly, the owners of such intellectual property are free to license such rights to third parties, including our competitors, on terms that may be superior to those offered to us or on a more favorable timeline, which could place us at a competitive disadvantage.
+Added: Competition for high-quality or well-known intellectual property licenses can be intense, and often results in one or more of increased advances, minimum payment guarantees, and royalties that we must pay to the licensor, which decreases our profitability.
+Added: In the future, we may identify additional third-party intellectual property we may need or desire to license in order to engage in our business, including to support existing games or potential future offerings.
However, such licenses may not be available on acceptable terms or at all.
−Removed: If we are unable to obtain and remain in compliance with the terms of these licenses or obtain additional licenses on reasonable economic terms, we may be required to discontinue or limit our use of our games or features therein that include or incorporate the licensed intellectual property, and our revenue and profitability may be adversely impacted.
−Removed: We also cannot be certain that our licensors are not infringing, misappropriating, or otherwise violating the intellectual property rights of others or that our licensors have sufficient rights to the intellectual property to grant us the
−Removed: applicable licenses.
−Removed: If we are unable to obtain or maintain rights to any of such in-licensed intellectual property because of claims of intellectual property infringement, misappropriation, or other violation claims brought by third parties against our licensors or against us, our ability to develop games containing such intellectual property could be severely limited and our business could be harmed.
−Removed: The perceived value of our virtual currency is highly dependent on how we manage the economies in our games.
+Added: If we are unable to obtain and remain in compliance with the terms of these licenses or obtain additional licenses on reasonable economic terms, we may be required to discontinue, modify, or limit certain games or features that include or incorporate the licensed intellectual property, and our revenue and profitability may be adversely impacted.
+Added: We also cannot be certain that our licensors are not infringing, misappropriating, or otherwise violating the intellectual property rights of others or that our licensors have sufficient rights to the intellectual property to grant us the applicable licenses.
+Added: In some cases, our agreements with licensors may provide limited or no indemnification for such claims.
+Added: If we are unable to obtain or maintain rights to any of such in-licensed intellectual property because of claims of intellectual property infringement, misappropriation, or other violation claims brought by third parties against our licensors or against us, our ability to develop, operate, or market games containing such intellectual property could be limited or delayed and our business could be harmed.
+Added: The perceived value of our virtual currency and the effectiveness of our pricing and monetization models are highly dependent on how we manage the economies in our games.
If we fail to manage our game economies properly, our business may suffer.
Our games are available to players for free, and historically we have derived substantially all of our revenues from the sale of in-game virtual currency when players make voluntary in-game purchases.
−Removed: Paying players choose to purchase virtual currency in our games because of its perceived value, which is dependent on the relative ease of obtaining equivalent virtual currency by simply playing our games.
+Added: Paying players choose to purchase virtual currency in our games because of its perceived value, which is dependent on the relative ease of obtaining equivalent
+Added: virtual currency by simply playing our games.
+Added: A substantial portion of our revenue depends on maintaining this perceived value among a relatively small number of highly engaged paying players.
The perceived value of our virtual currency can be impacted by various actions that we take in our games, including offering discounts for virtual currency, giving away virtual currency in promotions, or providing other non-paid methods of obtaining virtual currency.
Managing game economies is difficult, and relies on our assumptions and judgment.
−Removed: If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer and our players may be less likely to play our games and to purchase virtual currency from us in the future, which would cause our business, financial condition, and results of operations to suffer.
−Removed: Our ability to successfully attract in-game advertisers depends on our ability to design an attractive advertising model that retains players.
−Removed: While historically we have derived substantially all of our revenues from the sale of in-game virtual currency, our Tetris®-branded mobile game and Brainium games derive the majority of their revenues from the sale of in-game advertisements.
+Added: Imbalances in our virtual economies, including excessive inflation or deflation of virtual currency or rewards, may reduce player engagement, undermine monetization, or create perceptions of unfairness among players.
+Added: Once changes to a game economy are implemented, it may be difficult or impossible to fully reverse their effects or restore prior player behavior or spending patterns.
+Added: If we fail to manage our virtual economies properly or fail to promptly and successfully respond to any such disruption, our reputation may suffer, players may reduce spending or cease playing our games, and negative player sentiment could spread rapidly through social media, reviews, or community channels, which would cause our business, financial condition, and results of operations to suffer.
+Added: The effectiveness of our virtual economies is closely linked to player engagement and, in certain games, advertising monetization.
+Added: Changes that negatively affect engagement or perceptions of value may also reduce advertising impressions or rates, further amplifying the adverse impact on our revenue.
+Added: We regularly test and adjust pricing, offers, promotions, and reward structures in our games in an effort to optimize engagement and monetization.
+Added: These changes may not have the intended effect and could lead to reduced spending, increased player churn, or volatility in our revenue.
+Added: Player responses to pricing and monetization changes can be unpredictable, and negative reactions may occur even when changes are intended to improve the overall game experience.
+Added: Our pricing, promotional practices, and virtual currency mechanics are also subject to scrutiny by regulators and platform providers, including with respect to consumer protection, transparency, and fairness.
+Added: Regulatory or platform actions that restrict or require changes to pricing, promotions, or virtual currency mechanics could limit our ability to manage game economies effectively and adversely affect our revenue and results of operations.
+Added: Our ability to successfully attract in-game advertisers depends on the effectiveness of our advertising models and our ability to maintain player engagement.
+Added: While historically we have derived substantially all of our revenues from the sale of in-game virtual currency, certain of our games derive a significant portion of their revenues from in-game advertising.
If we are unable to attract and maintain a sufficient player base or otherwise fail to offer attractive in-game advertising models, advertisers may not be interested in purchasing such advertisements in our games, which could adversely affect our revenues from in-game advertising.
−Removed: In addition, if we include in-game advertising in our games that players view as excessive, such advertising may materially detract from players’ gaming experiences, thereby creating player dissatisfaction, which may cause us to lose players and revenues, and negatively affect the experience for players making purchases of virtual currency in our games.
+Added: We rely on third-party advertising networks, exchanges, and mediation platforms to source, serve, and optimize in-game advertisements, and changes to their terms, algorithms, pricing, or technical requirements could reduce fill rates, effective pricing, or advertiser demand.
+Added: Demand for in-game advertising is also subject to factors outside of our control, including changes in advertiser budgets, shifts in advertising spend across channels, macroeconomic conditions, and the performance or pricing models of advertising networks and exchanges.
+Added: In addition, advertising revenue is typically priced on a cost-per-impression or similar basis, and fluctuations in effective cost per mille (“eCPM”), including seasonal variations and changes in advertiser demand, inventory mix, or targeting limitations, can cause significant volatility in our advertising revenue from period to period, independent of player engagement levels.
+Added: Advertising practices also are subject to evolving platform policies, privacy regulations, and consumer protection standards, which may limit the types of ads we can display, how ads are targeted, or the data that can be used for advertising purposes, potentially reducing advertising effectiveness or revenue.
+Added: Advertising revenue may be more volatile and less predictable than revenue from in-game purchases, and a relatively small number of advertisers or advertising partners may account for a meaningful portion of our advertising revenue in certain periods.
+Added: If we include in-game advertising in our games that players view as excessive, intrusive, repetitive, or poorly integrated, such advertising may materially detract from players’ gaming experiences, thereby creating player dissatisfaction, which may cause us to lose players and revenues, and negatively affect the experience for players who make, or may otherwise make, purchases of virtual currency or engage with other monetization features.
Our games and other software applications, and our and our vendors' and other partners' information technology and other systems and platforms, have, on occasion, experienced failures, errors, defects, or disruptions.
−Removed: Although such events have not had a material impact in the past, future similar events could disrupt our business, impact our games and related software applications, affect our ability to scale our technical infrastructure, diminish our brand and reputation, subject us to liability, and adversely affect our operating results and growth prospects.
+Added: Such events could disrupt our business, impact our games and related software applications, affect our ability to scale our technical infrastructure, diminish our brand and reputation, subject us to liability, and adversely affect our operating results and growth prospects.
Our games may contain errors, bugs, flaws, corrupted data, defects, and other vulnerabilities, some of which may only become apparent after their launch, particularly as we launch new games and release new features to existing games under tight time constraints.
Furthermore, our development and testing processes may not detect errors and vulnerabilities in our games prior to their release.
−Removed: These defects may only become apparent after we launch a new game or publish an update to an existing game, particularly as we launch new games or updates and rapidly release new features to existing games under tight time constraints.
−Removed: For example, these errors could prevent a player from making in-game purchases, which could harm our business.
+Added: These defects may only become apparent after we launch a new game or publish an update to an existing game, particularly as we launch new games or updates and rapidly release new features to existing games under
+Added: tight time constraints.
+Added: For example, these errors could prevent a player from making in-game purchases or disrupt advertising delivery, reward fulfillment, or other promotional or monetization features, which could harm our business.
These errors could also be exploited by cheating programs and other forms of misappropriation, be leveraged by nefarious actors to expose personal data, or create other issues or problems harming the overall game-playing experience for our players.
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However, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business.
−Removed: We cannot assure you that the measures we take to detect and prevent or hinder cybersecurity attacks or other security or data breaches, to protect our systems, data and player information, and to prevent outages, data loss, and fraud, including a disaster recovery strategy for server, equipment, or systems failure and the use of third parties for certain cybersecurity services, will provide sufficient security or be adequate
−Removed: for our operations.
−Removed: Our vendors and other partners are also subject to the foregoing risks, and we do not have any control over them.
+Added: We cannot assure you that the measures we take to detect and prevent or hinder cybersecurity attacks or other security or data breaches, to protect our systems, data and player information, and to prevent outages, data loss, and fraud, including a disaster recovery strategy for server, equipment, or systems failure and the use of third parties for certain cybersecurity services, will provide sufficient security or be adequate for our operations.
+Added: Our vendors and other partners, including cloud hosting providers, data center operators, content delivery networks, and other infrastructure or service providers on which our games and platforms depend, are also subject to the foregoing risks, and we do not have any control over them.
We have experienced, and may in the future experience, system disruptions, outages, and other performance problems, including when releasing new software versions or bug fixes, due to a variety of factors, including infrastructure changes, human or software errors, and capacity constraints.
Such disruptions have not had a material impact to date;
−Removed: however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our or third parties’ computer systems and technological infrastructure, including the data contained therein or transmitted thereby, could result in a wide range of negative outcomes, including violations of applicable privacy laws which can result in significant fines, governmental investigations and enforcement actions, legal and financial exposure, contractual liability, and damage to our reputation, each of which could materially adversely affect our business, financial condition, results of operations, and prospects.
+Added: however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our or third parties’ computer systems and technological infrastructure, including the data contained therein or transmitted thereby, could result in a wide range of negative outcomes, including loss of data integrity, system availability, or operational continuity, which could indirectly expose us to regulatory scrutiny, governmental investigations and enforcement actions, legal and financial exposure, contractual liability, and damage to our reputation, each of which could materially adversely affect our business, financial condition, results of operations, and prospects.
Programming errors, defects, and data corruption could also disrupt our operations, cause us to violate applicable data privacy laws, adversely affect the experience of our players, harm our reputation, cause our players to stop playing our games, divert our resources, and delay market acceptance of our games, any of which could result in legal liability to us or harm our business, financial condition, results of operations, and prospects.
+Added: Any significant interruption in the availability of our games or platforms, whether due to internal system failures, third-party outages, or external events, could prevent players from accessing our games, making in-game purchases, or participating in live or time-sensitive features.
+Added: Even short-term disruptions may negatively affect player trust, engagement, and spending behavior.
+Added: We rely on a limited number of third-party infrastructure providers for hosting, data storage, and content delivery.
+Added: Disruptions, outages, or capacity constraints affecting these providers could impair our ability to operate our games at scale, and we may have limited ability to quickly transition to alternative providers without service degradation or increased cost.
+Added: Because our games operate in real time and serve a large number of players simultaneously, technical failures or disruptions may escalate rapidly and have a disproportionate impact on our operations, financial performance, and reputation.
+Added: The frequent deployment of software updates, patches, and new features inherent in live game operations increases the risk of introducing unintended errors or performance issues.
+Added: Even updates intended to improve stability or security could negatively affect game performance, player experience, or monetization if not implemented successfully.
If our player base and engagement continue to grow, and the number and types of games and features we offer continue to grow and evolve, we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy our players’ needs and operate our business.
Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the quality of our games or other operations.
−Removed: In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, which may only become evident after we have started to fully use the underlying equipment or software, which could further degrade the player experience or increase our costs.
+Added: These efforts may require significant capital expenditures or operating expense increases and may not yield the anticipated performance or reliability benefits.
+Added: In addition, there may be issues related to this infrastructure that are not
+Added: identified during the testing phases of design and implementation, which may only become evident after we have started to fully use the underlying equipment or software, which could further degrade the player experience or increase our costs.
As such, we could fail to continue to effectively scale and grow our technical infrastructure to accommodate increased demands.
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We believe that if our players have a negative experience with our games, or if our brand or reputation is negatively affected, players may be less inclined to continue or to engage with us.
−Removed: As such, a failure or significant interruption in our service would harm our reputation, business, and operating results.
+Added: As such, a failure or significant interruption in our service could harm our reputation, reduce player engagement and monetization, and materially adversely affect our business and operating results.
Our success depends on the security and integrity of the games we offer, and security breaches or other disruptions could compromise our information or the information of our players and expose us to liability, which would cause our business and reputation to suffer.
−Removed: We believe that our success depends in large part on providing secure games to our players.
+Added: We believe that our success depends in large part on providing secure, reliable and continuously available games to our players.
Our business sometimes involves the collection, storage, processing and transmission of players’ proprietary, confidential and personal information.
We also maintain certain other proprietary and confidential information relating to our business and personal information of our personnel.
−Removed: Despite our security measures, our games may be vulnerable to attacks by hackers, players, vendors, or others, or to breaches due to malfeasance or other disruptions.
+Added: Despite our security measures, our games may be vulnerable to attacks by hackers, fraudsters, players, vendors, or others, including through ransomware, distributed denial-of-service attacks, social engineering, credential-stuffing, or other techniques, or to breaches due to malfeasance or other disruptions.
Any such security breach or incident could result in unauthorized access to, misuse of, or unauthorized acquisition of, our or our players’ data, the loss, corruption or alteration of this data, interruptions in our operations, or damage to our equipment or systems or those of our players or third-party platforms.
−Removed: Any such occurrence could expose us to claims, regulatory investigations, litigation, (including class actions), fines and potential liability., negative reputational impacts that cause us to lose existing or future customers, and/or significant costs relating to incident response, system restoration or remediation, or future compliance.
+Added: We rely on third-party service providers, including cloud hosting providers, analytics providers, and platform partners, and any security failure or disruption involving these third parties could adversely affect our systems and data.
+Added: Any such occurrence could expose us to claims, regulatory investigations, litigation (including class actions), fines and potential liability, negative reputational impacts, loss of player trust or engagement, diversion of management attention, and increased operating costs, including potentially significant costs relating to incident response, system restoration or remediation, or future compliance.
Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition.
+Added: The threat landscape for cybersecurity attacks is rapidly evolving, and the techniques used by attackers are becoming increasingly sophisticated.
+Added: Our security measures may be insufficient to prevent all incidents, and we may not be able to anticipate or respond effectively to all emerging threats, Security incidents, system failures, or other disruptions could impair our ability to operate our games, process in-game transactions, or provide customer support.
+Added: Even temporary interruptions in service availability could negatively affect player engagement, monetization, and brand perception, and could result in lost revenue or contractual penalties.
+Added: Security vulnerabilities may also be exploited to engage in fraud, cheating, or manipulation of game mechanics or virtual economies.
+Added: Such activities could undermine the integrity of our games, result in unfair player experiences, reduce engagement, and require significant resources to detect and remediate.
An increasing number of online services have disclosed security breaches, some of which have involved sophisticated and highly targeted attacks on portions of their services.
2 unchanged sentences
Data security breaches and other data security incidents may also result from non-technical means, such as actions by employees, contractors, or other service providers.
−Removed: Any compromise of our security could result in a violation of applicable privacy laws and regulations and could result in governmental investigations, enforcement actions, and legal and financial exposure, including potential costs or liabilities that may not be covered by our insurance.
+Added: Regulators or other third parties may initiate investigations or enforcement actions based on suspected or alleged security weaknesses, even if no actual breach is ultimately confirmed.
+Added: Any compromise of our security could result in a violation of applicable privacy laws and regulations and could result in governmental investigations, enforcement actions, and legal and financial exposure, including potential costs or liabilities that may not be covered by our insurance or that exceed available coverage limits.
Any such security compromise could also result in damage to our reputation and a loss of confidence in our security measures.
Any of these effects could have a material adverse impact on our business or results of operations,
−Removed: If the use of mobile devices as game platforms and the proliferation of mobile devices generally do not continue to increase, our business could be adversely affected.
−Removed: The number of people using mobile Internet-enabled devices has increased dramatically over time and we expect that this trend will continue.
−Removed: However, the mobile market, particularly the market for mobile games, may not grow in the way we anticipate.
+Added: Responding to actual or perceived security incidents may require us to devote significant resources to investigation, remediation, system upgrades, customer communications, legal compliance, and coordination with regulators and platform partners.
+Added: These efforts could be costly and disruptive and may divert management attention from strategic initiatives.
+Added: If the use of mobile devices as game platforms does not continue to grow or if player engagement on mobile devices declines or shifts to other platforms, our business could be adversely affected.
+Added: The number of people using mobile Internet-enabled devices has increased dramatically over time and although this trend has continued in recent years, it may not persist or may evolve in ways that are unfavorable to us.
+Added: In addition, even if mobile device usage continues to grow, players may spend less time playing mobile games due to increased competition for attention from other forms of digital entertainment, social media, streaming services, or other mobile applications.
Our future success is substantially dependent upon the continued growth of the market for mobile games.
−Removed: In addition, we do not currently offer our games on all mobile devices.
−Removed: If the mobile devices on which our games are available decline in popularity or become obsolete faster than anticipated, we could experience a decline in revenue and may not achieve the anticipated return on our development efforts.
+Added: In addition, we do not currently offer our games on all mobile devices and we may be required to devote significant development resources to support new operating systems, device specifications, screen formats, or technical standards introduced by device manufacturers or platform providers.
+Added: Because a substantial portion of our revenue is generated through mobile platforms, any adverse trend affecting mobile gaming could have a disproportionate impact on our business.
+Added: If the mobile devices on which our games are available decline in popularity or become obsolete faster than anticipated, we could experience a decline in revenue, including through reduced in-game purchases, advertising demand, or changes in player spending behavior on mobile devices, and may not achieve the anticipated return on our development efforts.
Any such declines in the growth of the mobile market or in the use of mobile devices for games could harm our business, financial condition, or results of operations.
−Removed: While we have achieved profitability in the past, we also have a history of net losses and our revenue and operating margins may decline.
−Removed: We also may incur substantial net losses in the future and may not sustain profitability.
−Removed: Our operating and net income has historically fluctuated and we believe our operating margin could decrease as a result of declining revenue and/or increasing costs resulting from the risks discussed in this Annual Report on Form 10-K or in connection with any merger and acquisition activity that we may undertake.
−Removed: We expect to continue to expend substantial financial and other resources on game development, our technology stack, game engines, game technology and tools, player acquisition, the expansion of our network, international expansion, and marketing.
−Removed: Our operating costs will increase and our operating margins may decline if we do not effectively manage costs, launch new products on schedule that monetize successfully, and enhance our games so that these games continue to monetize successfully.
−Removed: In addition, weak economic conditions or other factors could cause our revenues to contract, requiring us to implement significant additional cost cutting measures, including a decrease in sales and marketing and paid player acquisition, which could harm our long-term prospects.
−Removed: If our revenue does not increase to offset any additional expenses, if we fail to manage or experience unexpected increases in operating expenses, or if we are required to take additional charges related to impairments or restructurings, our financial results and results of operations may suffer and we may not achieve or maintain profitability.
−Removed: We intend to grow our business through strategic acquisitions, investments, and joint ventures that involve numerous risks and uncertainties.
−Removed: We intend to grow our business through strategic transactions, including acquisitions, investments, and joint ventures, that involve numerous risks and uncertainties.
−Removed: We have previously closed several such transactions, including the acquisitions of Brainium and Pixode, and the license rights for Tetris®-branded mobile games, and are currently in, and in the future expect to continue to be in, various stages of seeking, evaluating, and pursuing additional strategic transactions both in the U.S.
+Added: Players may increasingly engage with games through alternative platforms, including consoles, PCs, cloud-based gaming services, or subscription-based offerings, which could reduce demand for mobile games and adversely affect our growth prospects.
+Added: In addition, rapid changes in mobile device hardware, form factors, or operating systems could require us to redesign or re-optimize our games, increase development costs, or limit compatibility with certain devices, which could delay launches or reduce player engagement.
+Added: Changes in mobile advertising ecosystems, including tracking limitations, changes in ad formats, or reduced advertiser demand for mobile inventory, could reduce our ability to monetize mobile gameplay through advertising even if overall mobile usage remains strong.
+Added: While we have achieved profitability in the past, our revenue and operating margins may decline, and we may not be able to sustain profitability.
+Added: Our operating and net income have historically fluctuated, and our operating margins may decline in future periods as a result of declining revenue and/or increasing costs resulting from the risks discussed in this Annual Report on Form 10-K or in connection with any merger and acquisition activity, including integration costs or performance shortfalls associated with acquired businesses.
+Added: We expect to continue to expend substantial financial and other resources on game development, our technology stack, game engines, game technology and tools, player acquisition, the expansion and maintenance of our network, live operations, and marketing initiatives.
+Added: Our operating costs will increase and our operating margins may decline if we do not effectively manage costs, launch new products on schedule that monetize successfully or if changes in player behavior, competitive dynamics, or platform policies adversely affect monetization performance, or if we fail to enhance our games so that these games continue to monetize successfully.
+Added: In addition, weak economic conditions or other factors could cause our revenues to contract, which could require us to implement additional cost containment or restructuring measures, including reductions in sales and marketing or paid player acquisition, which could harm our long-term prospects.
+Added: If our revenue does not increase to offset any additional expenses, if we fail to manage or experience unexpected increases in operating expenses, or if we are required to take additional charges related to impairments, restructurings, asset write-downs, or other non-cash or cash charges, our financial condition, results of operations, and cash flows could be adversely affected, and we may not achieve or sustain profitability.
+Added: We may pursue selective strategic acquisitions, investments, and joint ventures, which involve numerous risks and uncertainties.
+Added: From time to time, we evaluate strategic transactions, including acquisitions, investments, and joint ventures, that involve numerous risks and uncertainties.
+Added: Many of these processes do not result in completed transactions and may require substantial management time and professional fees without producing a consummated deal.
+Added: We have previously closed several such transactions, including the acquisitions of Brainium and Pixode, and the license rights for Tetris®-branded mobile games, and we expect to continue to evaluate potential strategic transactions both in the U.S.
and in non-U.S.
1 unchanged sentence
These transactions often require unique approaches to integration due to, among other reasons, the structure of the transactions, the locations, and cultural differences among the other company’s teams and ours, and have required and will continue to require significant attention from our management team.
−Removed: If we are unable to obtain the anticipated benefits from these transactions, or if we encounter difficulties in integrating any acquired operations with our business, our financial condition and results of operations could be materially harmed.
+Added: Even for smaller or less complex transactions, integration challenges may arise.
+Added: If we are unable to obtain the anticipated benefits from these transactions, or if we
+Added: encounter difficulties in integrating any acquired operations with our business, our financial condition and results of operations could be materially harmed.
Challenges and risks from such acquisitions, investments, and joint ventures include:
6 unchanged sentences
• diversion of our management’s attention;
+Added: • substantial internal and external costs associated with evaluating potential transactions that are not completed, including management time, legal, accounting, financial advisory, and diligence expenses, with no corresponding operational or financial benefit;
• declining employee morale and retention issues resulting from changes in compensation, or changes in management, reporting relationships, or future prospects;
5 unchanged sentences
• the difficulty in accurately forecasting and accounting for the financial impact of an acquisition transaction, including accounting charges and integrating and reporting results for acquired companies that have not historically followed U.S.
−Removed: • the fact that we may be required to pay contingent consideration in excess of the initial fair value, and contingent consideration may become payable at a time when we do not have sufficient cash available to pay such consideration;
+Added: • the fact that we may be required to pay contingent consideration in excess of the initial fair value, including contingent consideration arrangements that may be tied to post-closing performance milestones, and contingent consideration may become payable at a time when we do not have sufficient cash available to pay such consideration;
• the fees and costs of legal, accounting, and other professional advisors engaged by us for such acquisitions, which may be substantial;
7 unchanged sentences
The benefits of an acquisition, investment, or joint venture may also take considerable time to develop, and we cannot be certain that any particular transaction will produce the intended benefits, which could adversely affect our business, financial condition, or results of operations.
−Removed: Our ability to grow through future acquisitions, investments, and joint ventures will depend on the availability of suitable candidates at an acceptable cost, our ability to compete effectively to attract these
−Removed: candidates, and the availability of financing to complete larger transactions.
+Added: In addition, pursuing strategic transactions may divert management attention and resources away from executing on our core operational and strategic priorities, particularly during periods of restructuring, portfolio optimization, or market transition.
+Added: Our ability to grow through future acquisitions, investments, and joint ventures will depend on the availability of suitable candidates at an acceptable cost, our ability to compete effectively to attract these candidates, and the availability of financing, including cash resources, debt capacity, or equity financing, to complete larger transactions.
In addition, we may encounter challenges in evaluating future acquisitions, investments, and joint ventures and integrating personnel, business practices, and company cultures from acquired companies.
Acquisitions, investments, and joint ventures could result in potential dilutive issuances of equity securities, use of significant cash balances or incurrence of debt (and increased interest expense), contingent liabilities or amortization expenses related to intangible assets, or write-offs of goodwill or intangible assets, which could adversely affect our results of operations and dilute the economic and voting rights of our stockholders.
−Removed: In addition, if we divest any businesses, these divestitures would similarly require significant investment of time and resources, may disrupt our business, distract management from other responsibilities, and may result in losses on disposal or continued financial involvement in the divested businesses, including through indemnification, guarantee, or other financial arrangements, for a period of time following the divestitures, which could adversely affect our financial results.
−Removed: Our international operations are, and our strategy to expand internationally will be, subject to increased challenges and risks.
−Removed: Continuing to expand our business to attract players in countries outside of the U.S.
−Removed: is an important element of our business strategy.
−Removed: An important part of targeting international markets is developing offerings that are localized and customized for the players in those markets.
−Removed: While we have international game studios in Hong Kong, Israel, Serbia, Singapore, Vietnam, Mexico and Chile we expect to continue to expand our international operations in the future by opening new international game studio locations and expanding our offerings in new languages.
−Removed: Our ability to expand our business and to attract players and talented employees in other international markets we may enter will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, economics, legal systems, alternative dispute systems, regulatory systems, and commercial infrastructures.
−Removed: Expanding our international focus may subject us to risks that we have not faced before or increase risks that we currently face, including risks associated with:
−Removed: • inability to offer certain games in certain foreign countries;
−Removed: • recruiting and retaining talented and capable management and employees in foreign countries;
−Removed: • challenges caused by distance, language, and cultural differences;
−Removed: • developing and customizing games and other offerings that appeal to the tastes and preferences of players in international markets;
−Removed: • competition from local game makers with intellectual property rights and significant market share in those markets and with a better understanding of player preferences;
−Removed: • obtaining, utilizing, protecting, defending, and enforcing our intellectual property rights;
−Removed: • negotiating agreements with local distribution platforms that are sufficiently economically beneficial to us and protective of our rights;
−Removed: • the inability to extend proprietary rights in our brand, content, or technology into new jurisdictions;
−Removed: • implementing alternative payment methods for virtual currency in a manner that complies with local laws and practices and protects us from fraud;
−Removed: • compliance with applicable foreign laws and regulations, including privacy laws and laws relating to content and consumer protection;
−Removed: • compliance with anti-bribery laws and anti-corruption laws, including the Foreign Corrupt Practices Act (the "FCPA");
−Removed: • credit risk and higher levels of payment fraud;
−Removed: • currency exchange rate fluctuations;
−Removed: • protectionist laws and business practices that favor local businesses in some countries;
−Removed: • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the U.S.
−Removed: or the foreign jurisdictions in which we operate;
−Removed: • political, economic, and social instability;
−Removed: • public health crises, such as the COVID-19 pandemic and other future health epidemics or contagious disease outbreaks, which can result in varying impacts to our employees, players, vendors, rewards partners, and commercial partners internationally;
−Removed: • higher costs associated with doing business internationally;
−Removed: • limitations on, and costs related to, the repatriation of funds;
−Removed: • compliance with applicable sanctions regimes regarding business dealings or other business relationships with or involving certain designated persons or countries;
−Removed: • export or import regulations;
−Removed: • trade and tariff restrictions.
−Removed: Certain of these laws also contain provisions that require accurate record keeping and further require companies to devise and maintain an adequate system of internal accounting controls.
−Removed: Although we have policies and controls in place that are designed to ensure compliance with these laws, if those controls are ineffective or an employee or intermediary fails to comply with the applicable regulations and policies or if the design of those policies and controls is incomplete or inadequate, we may be subject to criminal and civil sanctions and other penalties.
−Removed: Any such violation could disrupt our business and adversely affect our reputation, results of operations, cash flows and financial condition.
−Removed: In addition, as we operate and sell internationally, we are subject to the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties and other business entities for the purpose of obtaining or retaining business.
−Removed: While we have attempted to implement safeguards to discourage these practices by our employees, consultants and agents, violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which would negatively affect our business, results of operations and financial condition.
−Removed: Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day management of a growing and increasingly geographically diverse company.
−Removed: We may not realize the operating efficiencies, competitive advantages or financial results that we anticipate from our investments in foreign jurisdictions.
−Removed: In addition, our international business operations could be interrupted and negatively affected by terrorist activity, political unrest or other economic or political uncertainties.
−Removed: Moreover, foreign jurisdictions could impose tariffs, quotas, trade barriers and other similar restrictions on our international sales.
−Removed: If we are unable to manage the complexity of our global operations successfully, our business, financial condition, and operating results could be adversely affected.
−Removed: Additionally, our ability to successfully gain market acceptance in any particular market is uncertain, and the distraction of our senior management team could harm our business, financial condition, or results of operations.
+Added: In addition, if we divest any businesses or pursue the sale or separation of significant portions of our operations, including divestitures undertaken as part of strategic realignment, portfolio optimization or cost-reduction initiatives, these divestitures would similarly require significant investment of time and resources, may be complex to execute, may take longer than anticipated, or may not be completed on terms favorable to us or at all, may disrupt our business including through the loss of scale efficiencies, shared services, technology platforms, personnel, or revenue streams, may result in stranded costs or dis-synergies, may distract management from other responsibilities, and may result in losses on disposal or continued financial involvement in the divested businesses, including through indemnification, transition services arrangements, ongoing commercial relationships, shared infrastructure, guarantee, or other financial or operational arrangements, for a period of time following the divestitures, which could adversely affect our financial results.
+Added: Divestitures could also result in significant accounting charges, including impairment losses, restructuring charges, or discontinued operations accounting, and could adversely affect period-to-period comparability of our financial results.
+Added: Our business could be negative impacted by future pandemics, health epidemics or contagious disease outbreaks.
+Added: Our operations could be adversely affected by global health crises, such as pandemics or epidemics, including any resurgence of COVID‑19 or similar infectious diseases.
+Added: Past containment and mitigation measures, such as social distancing, travel restrictions, and other governmental orders, significantly disrupted global economies, supply chains, and labor availability, which materially affected our business operations and financial performance.
+Added: Future public health events could
+Added: again disrupt our operations, reduce customer demand, or adversely impact our results of operations and overall financial condition.
+Added: Our international operations are subject to increased challenges and risks.
+Added: Our international operations subject us to a variety of risks and challenges that could adversely affect our business, financial condition, and results of operations.
+Added: We currently operate game studios and conduct business activities across multiple countries outside the United States, which requires us to manage operations in diverse regulatory, legal, cultural, economic, and labor environments.
+Added: Operating internationally increases the complexity of our business and exposes us to risks associated with differing local laws and regulations, employment practices, tax regimes, currencies, political and economic conditions, and business customs, as well as challenges related to managing a geographically dispersed workforce.
+Added: These factors can require significant management attention and resources and may increase our operating costs or limit our ability to operate efficiently and effectively across our international footprint.
+Added: Operating and managing our business across multiple foreign jurisdictions subjects us to a variety of risks, including risks associated with:
+Added: • recruiting, retaining, and managing skilled management and employees in foreign jurisdictions, including compliance with local employment laws and practices;
+Added: • challenges arising from geographic distance, time zone differences, language barriers, and cultural differences;
+Added: • localizing game content, live operations, and player engagement strategies to reflect differing player preferences and market dynamics;
+Added: • competition from local and regional game developers that may have stronger brand recognition, established intellectual property rights, or a greater understanding of local player behavior;
+Added: • obtaining, protecting, defending, and enforcing our intellectual property rights in foreign jurisdictions;
+Added: • negotiating and maintaining agreements with local distribution platforms and service providers on terms that are economically favorable to us and adequately protect our rights;
+Added: • limitations on our ability to obtain or enforce proprietary rights in our brands, content, or technology in certain jurisdictions;
+Added: • implementing and supporting payment methods that comply with local laws and commercial practices while managing fraud risk and credit exposure;
+Added: • compliance with foreign laws and regulations, including those relating to data privacy and protection, cybersecurity, content standards, consumer protection, and advertising;
+Added: • compliance with anti-bribery and anti-corruption laws, including the U.S.
+Added: Foreign Corrupt Practices Act (“FCPA”) and similar laws in other jurisdictions;
+Added: • higher levels of payment fraud, chargebacks, or credit risk in certain markets;
+Added: • fluctuations in foreign currency exchange rates, which may adversely affect our reported results of operations and cash flows;
+Added: • protectionist laws, regulations, or business practices that favor local competitors;
+Added: • potential double taxation of international earnings and adverse tax consequences resulting from changes in U.S.
+Added: or foreign tax laws;
+Added: • political, economic, or social instability in countries where we operate;
+Added: • public health crises, such as the COVID-19 pandemic or other future epidemics or contagious disease outbreaks, which may adversely affect our employees, players, vendors, rewards partners, and other commercial partners;
+Added: • higher costs associated with operating internationally, including audit, legal, compliance, labor, and infrastructure costs;
+Added: • restrictions on, or increased costs associated with, the repatriation of funds;
+Added: • compliance with applicable sanctions regimes, export and import controls, and trade or tariff restrictions;
+Added: • limitations on our ability to offer certain games or features in particular countries due to local laws, regulations, or platform requirements;.
+Added: Certain of these laws and regulations require accurate recordkeeping and the maintenance of adequate internal accounting controls.
+Added: While we have implemented policies, procedures, and controls designed to promote compliance with applicable laws and regulations, including the FCPA, these controls may not be effective in all circumstances.
+Added: If an employee, contractor, intermediary, or business partner fails to comply with applicable laws or our internal policies, or if our controls are inadequate or improperly designed, we could be subject to civil or criminal penalties, fines, sanctions, or reputational harm, any of which could adversely affect our business, results of operations, cash flows, and financial condition.
+Added: In addition, managing international operations involves operational and organizational complexity, including coordinating activities across multiple jurisdictions and regulatory regimes and overseeing a geographically dispersed workforce.
+Added: We may not achieve the efficiencies, cost savings, or operating performance improvements we expect from our international operations.
+Added: Our international business could also be disrupted by political unrest, terrorism, economic instability, or other geopolitical events, as well as by the imposition of tariffs, quotas, trade barriers, or similar restrictions by foreign governments.
+Added: If we are unable to manage the complexity, cost structure, and compliance requirements of our international operations effectively, our business, financial condition, and results of operations could be adversely affected.
Our business is subject to a variety of U.S.
and foreign laws, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business.
−Removed: We are subject to a variety of laws in the U.S.
−Removed: and abroad that affect our business, including state and federal laws regarding consumer protection, electronic marketing, data protection and privacy, competition, taxation, intellectual property, export, and national security, which are continuously evolving and developing.
+Added: We are subject to a variety of U.S.
+Added: and foreign laws that affect our business, including laws relating to gambling and gaming, consumer protection, unfair or deceptive trade practices, electronic marketing, data protection and privacy, competition, taxation, intellectual property, export controls, and national security.
+Added: Many of these laws are evolving, subject to differing interpretations, and in certain jurisdictions remain unsettled as applied to social casino-style games and virtual currency models.
The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the U.S.
1 unchanged sentence
It is also likely that as our business grows and evolves and our games are played in a greater number of countries, we will become subject to laws and regulations in additional jurisdictions or other jurisdictions may claim that we are required to comply with their laws and regulations.
−Removed: There are ongoing academic, political, and regulatory discussions in the U.S., Europe, Australia, and other jurisdictions regarding whether social casino ap plications should be subject to a higher level or different type of regulation than other social game applications to protect consumers, in particular minors and persons susceptible to addiction to social casino games, and, if so, what this regulation should include.
−Removed: For example, at the end of August 2020, a court approved a settlement of class action litigation relating to alleged violations by Big Fish Games, Inc., the operator of an online social
−Removed: casino game, of a specific anti-gambling law in the State of Washington, in an aggregate amount equal to $155.0 million.
−Removed: In addition, since 2020 there have been numerous cases filed against social casino game developers, and third party platform providers, alleging that social casino games violate various states' gambling laws.
−Removed: For example, in September 2024, a court ruled that two slot-theme games operated by High Five Games constituted illegal gambling under Washington law.
−Removed: As a result, the company was ordered to pay $24.9 million in February 2025.
−Removed: In January 2025, the Washington State Gambling Commission issued a public memo in which it asserted that games of chance involving virtual currency are likely to be classified as illegal gambling under Washington law.
−Removed: It also encouraged companies offering virtual casino-style games to Washington residents to review their games and ensure compliance with state gambling regulations.
−Removed: We have been subject to lawsuits in Alabama, Tennessee, Kentucky and Washington, alleging that our social casino-themed games constitute illegal gambling under applicable state laws and seeking to recover amounts paid by the residents of the applicable state in connection with such games.
−Removed: In addition, we have received demands for arbitration alleging that our games constitute illegal gambling under applicable state law.
+Added: A substantial portion of our revenue is derived from social casino-themed games, and adverse interpretations or enforcement actions relating to such games could disproportionately impact our business.
+Added: Regulatory scrutiny of social casino-style games has increased in recent years amid ongoing academic, political, and regulatory discussions in the United States, Europe, Australia, and other jurisdictions regarding whether such applications should be subject to a higher level or different type of regulation than other social game applications, particularly to address concerns relating to consumer protection, minors, and individuals susceptible to addiction.
+Added: Certain plaintiffs and regulators have asserted that social casino games involving the purchase of virtual currency used to participate in games of chance may constitute illegal gambling under certain state laws, particularly in Washington State.
+Added: Courts have previously held that virtual currency in certain social casino games may constitute a “thing of value” under Washington law, and there have been numerous private lawsuits filed since 2020 against social casino developers and, in some cases, third-party platform providers alleging violations of state gambling loss recovery statutes.
+Added: For example, in 2020, Big Fish Games, Inc.
+Added: settled a Washington class action alleging violations of state anti-gambling laws for $155.0 million, and in 2024 a Washington court ruled that certain slot-themed games operated by High Five Games constituted illegal gambling under Washington law, resulting in a monetary award in 2025.
+Added: In addition, in January 2025, the Washington State Gambling Commission issued a public memorandum asserting that games of chance involving virtual currency are likely to be classified as illegal gambling under
+Added: Washington law and encouraging companies offering virtual casino-style games to Washington residents to review their offerings for compliance.
+Added: More recently, in February 2026, the Washington State Attorney General filed a lawsuit against certain social casino operators alleging violations of Washington’s Gambling Act and Consumer Protection Act based on their operation of virtual casino-style games involving virtual currency and seeking injunctive relief and recovery of amounts allegedly lost by Washington residents.
+Added: These developments reflect an evolving and increasingly active enforcement environment and may increase the likelihood of regulatory investigations, enforcement actions, or additional civil litigation against companies operating social casino-style games, including us.
+Added: In certain jurisdictions, gambling loss recovery statutes permit private plaintiffs to seek recovery of amounts lost in connection with alleged illegal gambling activities, which can create exposure based on historical operations, even where no prior regulatory action has been taken.
+Added: We have been, and may in the future be, subject to lawsuits, arbitrations, or regulatory inquiries alleging that our social casino-themed games violate state gambling or consumer protection laws and seeking restitution, damages, penalties, or injunctive relief.
+Added: For example, we have been subject to lawsuits in Alabama, Tennessee, Kentucky and Washington, alleging that our social casino-themed games constitute illegal gambling under applicable state laws.
+Added: In addition, we have received various demands for arbitration alleging that our games constitute illegal gambling under applicable state law.
These demands generally attempt to recover amounts spent by third parties on the Company’s games by relying on state gambling loss recovery statutes and/or by seeking to have the applicable Terms of Service declared invalid.
See a full description of Legal Proceedings in Note 17— Commitments and Contingencies of the Financial Statements.
−Removed: We cannot predict the likelihood, timing, scope, or terms of any actions taken by an regulatory body, nor can we predict the timing or outcome of any litigation or arbitration proceedings.
−Removed: While we believe our games operate differently from games implicated in the Big Fish Games class action litigation, if new social casino regulations are imposed, or if anti-gambling laws or other regulations are interpreted to apply to our social casino games, certain, or all, of our casino-themed games may become subject to the rules and regulations and we may be exposed to civil and criminal penalties, fines, and other liabilities, which could be material and could harm our business or financial condition.
−Removed: Recent regulatory developments, such as the Washington State Gambling Commission's January 2025 public memo described above, indicate growing regulatory scrutiny in this area.
−Removed: Any costs incurred as a result of these potential liabilities, including defense costs, could harm our business, financial condition, or results of operations.
−Removed: It is possible that a number of laws and regulations may be adopted or construed to apply to us in the U.S.
−Removed: and elsewhere that could restrict the online and mobile industries, including player privacy, advertising, taxation, content suitability, copyright, distribution, and antitrust.
+Added: We cannot predict the likelihood, timing, scope, or outcome of any regulatory investigation, enforcement action, or private litigation.
+Added: If courts or regulators were to determine that our games violate applicable gambling or consumer protection laws, we could be required to modify or discontinue certain games in particular jurisdictions, obtain licenses or regulatory approvals, pay restitution, civil penalties, damages, or enter into settlements, including amounts calculated based on historical player spending, which could be significant.
+Added: Any such outcome could materially and adversely affect our business, financial condition, results of operations, or cash flows.
+Added: Because gambling and consumer protection laws vary significantly by jurisdiction and are often interpreted by courts on a state-by-state basis, it is possible that certain jurisdictions may determine that our games are permissible while others may not, resulting in a patchwork of regulatory outcomes that could require us to tailor, restrict, or discontinue our offerings in particular markets.
+Added: New or expanded laws and regulations, or new interpretations of existing laws, may be adopted in the U.S.
+Added: or abroad that restrict or regulate social casino-style games, virtual currency models, in-game purchases, marketing practices, age-gating, responsible gaming disclosures, or consumer protection practices.
+Added: Such laws could require us to obtain licenses, implement additional compliance controls, modify our monetization mechanics, restrict access in certain jurisdictions, or incur additional compliance costs.
+Added: Increased regulation could reduce player engagement, increase operating costs, or limit our ability to operate in certain markets.
Furthermore, the growth and development of electronic commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours conducting business through the Internet and mobile devices.
−Removed: We anticipate that scrutiny and regulation of our industry will increase and we will be required to devote legal and other resources to addressing such regulation.
−Removed: For example, existing laws or new laws regarding the marketing of in-game purchases, labeling of free-to-play games, regulation of currency, banking institutions, unclaimed property, or money transmission may be interpreted to cover our games and the virtual currency, goods, or payments that we receive.
+Added: Existing laws or new laws regarding the marketing of in-game purchases, labeling of free-to-play games, regulation of currency, banking institutions, unclaimed property, or money transmission may be interpreted to cover our games and the virtual currency, goods, or payments that we receive.
If that were to occur, we may be required to seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our operating costs.
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or elsewhere regarding these activities may lessen the growth of social game services and impair our business, financial condition, or results of operations.
−Removed: We may be subject to future litigation in the operation of our business.
−Removed: An adverse outcome in one or more proceedings could adversely affect our business.
−Removed: We may be involved in claims, suits, government investigations, and proceedings arising in the ordinary course of our business, including actions with respect to intellectual property claims, privacy, data protection, law enforcement matters, tax matters, labor and employment claims, commercial and acquisition-related claims, class action lawsuits, and other matters.
−Removed: Such claims, suits, government investigations, and proceedings are inherently uncertain and their results cannot be predicted with certainty.
−Removed: Regardless of their outcomes, such legal proceedings can have an adverse impact on us because of legal costs, diversion of management and other personnel, and other factors.
−Removed: It is possible that a resolution of one or more such proceedings could result in liability, penalties, or sanctions, as well as judgments, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our business practices, products or technologies, which could in the future materially and adversely affect our business, financial condition, or results of operations.
+Added: We are subject to claims, investigations, and litigation that could adversely affect our business.
+Added: We may be involved in claims, suits, arbitrations, and government investigations arising in the ordinary course of our business, including matters relating to gambling and gaming laws, consumer protection, intellectual property, privacy and data protection, employment, tax, commercial disputes, and other matters.
+Added: Such proceedings are inherently uncertain and may result in significant legal costs, diversion of management time, monetary damages, penalties, injunctive relief, or changes to our business practices.
+Added: Even if we ultimately prevail, the defense of such matters may be costly and time-consuming and could adversely affect our reputation and business.
+Added: The legal and regulatory treatment of games that incorporate sweepstakes-based promotional mechanics is evolving, uncertain, and increasingly restrictive in certain jurisdictions, which could materially and adversely affect our business.
+Added: We operate games that incorporate sweepstakes-based promotional mechanics, including casino-style gameplay paired with promotional sweepstakes structures.
+Added: The legal and regulatory framework governing sweepstakes promotions in the United States is complex, varies significantly by state, and is often unsettled as applied to modern digital and mobile gaming products.
+Added: State laws, regulations, and judicial interpretations governing sweepstakes, lotteries, and gambling frequently overlap and may be applied inconsistently or unpredictably.
+Added: As a result, regulators, legislators, courts, or other authorities may determine that certain sweepstakes-based promotional mechanics constitute illegal gambling, an unlawful lottery, or otherwise violate applicable law, even if those mechanics are designed to comply with existing sweepstakes exemptions.
+Added: In particular, regulators or courts could determine that the manner in which sweepstakes-based promotional mechanics are integrated into casino-style gameplay changes the legal characterization of those offerings, including by recharacterizing them as gambling or lottery activities rather than lawful promotional sweepstakes.
+Added: State attorneys general, gaming regulators, and other enforcement authorities have increasingly scrutinized online sweepstakes casino-style offerings and similar products, and in some cases have taken enforcement action, initiated investigations, or asserted that such offerings violate state law.
+Added: In addition, legislatures in certain states have enacted, or considered enacting, laws that specifically restrict or prohibit sweepstakes casino-style mechanics or digital promotions that simulate gambling, including legislation enacted or enforcement actions announced in states such as California and New York, as well as proposed or pending bills and policy initiatives in a number of other states.
+Added: These developments reflect a broader trend toward heightened regulatory and legislative attention to sweepstakes-based gaming models and create increased legal uncertainty for our business.
+Added: If any state, regulator, or court were to determine that our sweepstakes-based promotional mechanics, or any aspect of their structure, marketing, or implementation, violate applicable law, we could be required to modify, suspend, or discontinue affected games or features in that jurisdiction, potentially on short notice.
+Added: We could also be subject to civil or criminal penalties, fines, injunctions, disgorgement or restitution demands, consumer claims, reputational harm, or limitations on our ability to offer similar promotional mechanics in other jurisdictions.
+Added: Even where we believe our offerings comply with applicable law, responding to regulatory inquiries, investigations, or enforcement actions could require substantial management attention and expense and could materially adversely affect our business, financial condition, and results of operations.
+Added: In addition, third-party platform providers, payment processors, advertising networks, or other business partners may independently determine that sweepstakes-based promotional mechanics are inconsistent with their policies or risk tolerance, which could result in the suspension, removal, or restriction of our games or related payment processing capabilities.
+Added: In addition, some proposed or enacted legislation targeting sweepstakes-based gaming models has been drafted broadly to address “dual-currency,” “multi-currency,” or similar promotional mechanics involving virtual currencies or digital points that may be redeemed or exchanged for items of value.
+Added: While such measures are often directed at sweepstakes-style casino offerings, the scope of certain legislative proposals could be interpreted to apply to other gaming products that utilize loyalty points, virtual currencies, or promotional reward systems.
+Added: As a result, features of our games or loyalty programs that involve the accumulation or redemption of digital points for real-world rewards could potentially be affected by legislation or regulatory interpretations intended to address other business models.
+Added: If laws or regulations governing dual-currency or similar promotional mechanics were interpreted broadly or enacted in forms that capture aspects of our products or loyalty programs, we could be required to modify, suspend, or discontinue certain features or offerings in affected jurisdictions.
+Added: The evolving regulatory environment also creates the risk of abrupt, unanticipated, and potentially uneconomic market exits or product modifications.
+Added: We may deploy marketing and advertising spend to acquire players in a particular jurisdiction, only to later determine, or be required, to suspend or terminate sweepstakes-based promotional features in that jurisdiction due to changes in law, regulatory interpretation, or enforcement posture.
+Added: In such circumstances, we may be unable to recoup our player acquisition investments, and the loss of access to acquired players could negatively impact revenue, lifetime value assumptions, and return on advertising spend.
+Added: Because the regulatory and legislative landscape governing sweepstakes-based promotional mechanics is rapidly evolving, we may be required to continually adjust the design, terms, disclosures, eligibility requirements, or geographic availability of these features and may be required to implement enhanced compliance measures, including age verification, geolocation controls, identity verification, anti-money laundering monitoring, and state-specific rule variations.
+Added: Any such changes could reduce player engagement, increase compliance and development costs, limit growth opportunities, or materially adversely affect our business, financial condition, and results of operations.
+Added: If we are required to segregate sweepstakes-based offerings from our traditional social casino games, modify our virtual currency systems, or materially alter player flows, such changes could adversely affect player experience, monetization, and overall portfolio performance.
+Added: Our reliance on third-party platforms, payment providers, and other service partners exposes us to additional risks related to sweepstakes-based promotional mechanics that could materially adversely affect our business.
+Added: We rely on a variety of third-party platforms and service providers to distribute, operate, monetize, and support games that incorporate sweepstakes-based promotional mechanics.
+Added: These third parties include app distribution platforms, payment processors, banking partners, hosting providers, game content providers, geolocation and identity service providers, advertising networks, and other commercial partners.
+Added: Many of these third parties maintain their own policies, risk tolerance frameworks, and compliance standards regarding sweepstakes, gambling, and gambling-adjacent products, which may be more restrictive than applicable law or may change over time.
+Added: In some cases, these third parties may classify sweepstakes-based promotional mechanics as gambling or gambling-adjacent activity for purposes of their internal compliance frameworks, regardless of the legal characterization of such mechanics under applicable law.
+Added: As regulatory scrutiny of sweepstakes-based gaming models increases, these third parties may independently decide to restrict services, impose additional requirements, limit supported jurisdictions, increase fees, delay approvals, or exit sweepstakes-related activity altogether.
+Added: Banking partners, card networks, and payment processors may also impose enhanced underwriting standards, monitoring requirements, reserve requirements, or transaction restrictions in connection with sweepstakes-based activity, which could increase our costs, delay product rollouts, or limit our ability to process player transactions.
+Added: Such actions may be taken based on perceived regulatory risk, evolving internal policies, or anticipated changes in law, even if our sweepstakes-based promotional mechanics are lawful in the relevant jurisdiction.
+Added: We typically have limited ability to influence these decisions, which may be implemented with limited advance notice and without a formal regulatory determination of non-compliance.
+Added: If app distribution platforms, payment providers, or other key service partners were to restrict or discontinue support for sweepstakes-based promotional mechanics, or impose materially more burdensome terms, our ability to operate, scale, or monetize affected games could be significantly impaired.
+Added: These actions could require us to suspend or modify sweepstakes-based features in certain jurisdictions, disrupt player access, delay product updates, or reduce monetization opportunities, even absent any formal determination that our offerings violate applicable law.
+Added: In addition, adverse policy decisions by third parties relating to sweepstakes-based mechanics could affect our broader portfolio if such partners apply restrictive interpretations across all of our titles, including those that do not incorporate sweepstakes-based features.
+Added: In addition, actions taken by third parties may exacerbate the risk of abrupt and uneconomic market exits.
+Added: For example, we may invest in player acquisition, product localization, and marketing in a particular jurisdiction, only to later lose access to payment processing, distribution channels, or critical compliance-related services necessary to support sweepstakes-based promotional mechanics in that jurisdiction.
+Added: In such cases, we may be unable to recover marketing investments or retain acquired players, which could adversely affect revenue, margins, and return on advertising spend.
+Added: Because our business model depends in part on the continued willingness of third-party platforms and service providers to support sweepstakes-based promotional mechanics, adverse changes in their policies, practices, underwriting standards, or risk assessments, whether driven by regulation, enforcement trends, or internal considerations, could materially adversely affect our business, financial condition, and results of operations.
Failure to obtain, maintain, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition.
We regard the protection of our trade secrets, software, trademarks, service marks, trade dress, domain names, patents, and other intellectual property rights as critical to our success.
−Removed: We strive to protect our intellectual property rights by
−Removed: relying on a combination of federal, state, and common law trademark, copyright, patent, and trade secret protection laws, as well as contractual restrictions and business practices.
+Added: Our intellectual property includes not only registered rights, but also proprietary game mechanics, progression systems, balancing algorithms, live-operations tools, analytics models, and data-driven methodologies that are difficult to protect through registration and may be particularly susceptible to misappropriation or independent development by competitors.
+Added: We strive to protect our intellectual property rights by relying on a combination of federal, state, and common law trademark, copyright, patent, and trade secret protection laws, as well as contractual restrictions and business practices.
We enter into proprietary information and invention assignment agreements with our employees and contractors and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information.
While these agreements will give us contractual remedies upon any unauthorized use or disclosure of our proprietary business information or intellectual property, we may not always be able to effectively monitor or prevent such unauthorized use or disclosure or misappropriation of our proprietary information or intellectual property or deter independent development of similar technologies by others.
+Added: Our reliance on employees, contractors, and third-party development partners increases the risk that confidential information, trade secrets, or know-how may be inadvertently disclosed, intentionally misappropriated, or independently recreated
+Added: following personnel turnover or termination of commercial relationships.
+Added: In the highly competitive mobile and social gaming industry, competitors may be able to quickly replicate gameplay features, monetization mechanics, or user experience elements without violating our intellectual property rights, which could erode our competitive advantage even if no infringement has occurred.
Enforcing a claim that a party illegally disclosed or misappropriated our proprietary information is difficult, expensive, and time-consuming, and the outcome is unpredictable, and therefore, we may not be able to obtain adequate remedies.
−Removed: In addition, some courts inside and outside the U.S.
−Removed: are less willing or unwilling to protect trade secrets.
+Added: In addition, the laws and enforcement mechanisms relating to intellectual property protection vary significantly by jurisdiction, and some courts inside and outside the United States may be less willing or able to protect trade secrets, proprietary technology, or other intellectual property rights.
+Added: Because our games and software are distributed through third-party platforms and operate in client-server environments, portions of our code, assets, and game logic may be more susceptible to reverse engineering, unauthorized copying, or exploitation than proprietary software that is not publicly distributed.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us, which could harm our competitive position, business, financial condition, results of operations, and prospects.
+Added: These risks relate primarily to our ability to protect and enforce our own intellectual property rights;
+Added: separate risks relating to allegations that we infringe the intellectual property rights of others are discussed below.
We own registered trademarks and issued patents, and have filed, and may continue in the future to file, trademark and patent applications to protect certain of our innovations and intellectual property.
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Moreover, our failure to develop and properly manage new innovations and other technology could hurt our market position and business opportunities.
−Removed: While our software and other proprietary technology may be protected under copyright law, we have chosen not to register any copyrights in these works, and instead, primarily rely on protecting our software as a trade secret.
−Removed: In order to bring a copyright infringement lawsuit in the U.S., the applicable copyright must be registered.
−Removed: Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited.
+Added: While our software and other proprietary technology may be protected under copyright law, we have historically chosen not to register copyrights for certain works and instead primarily rely on trade secret protection and contractual safeguards.
+Added: As a result, in some circumstances, the remedies and damages available to us for unauthorized use of our software may be limited.
Furthermore, our intellectual property and other proprietary rights may be challenged, knowingly or unknowingly infringed, misappropriated, circumvented, declared generic, or determined to be infringing on or dilutive of third-party intellectual property rights, and we may not be able to prevent infringement or misappropriation or other violation of our intellectual property and other proprietary rights without incurring substantial expense.
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We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.
−Removed: Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios.
+Added: Some of our competitors, particularly larger or better-capitalized gaming companies, may be able to sustain the costs of intellectual property litigation or enforcement efforts more effectively than we can, potentially pressuring us to settle disputes on unfavorable terms or refrain from pursuing meritorious claims.
Uncertainties resulting from the initiation and continuation of intellectual property proceedings could harm our ability to compete in the marketplace.
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Any of the foregoing could harm our competitive position, business, financial condition, results of operations and prospects.
−Removed: Any inability to meaningfully enforce our intellectual property rights could harm our ability to compete and reduce demand for our games.
+Added: Strategic transactions, including acquisitions, divestitures, or licensing arrangements, may increase the complexity of our intellectual property portfolio and expose us to additional risks relating to ownership, scope, enforceability, or
+Added: infringement of intellectual property rights, including risks associated with legacy claims, unclear chain of title, or limitations on use following a transaction.
+Added: Any failure to meaningfully obtain, maintain, protect, or enforce our intellectual property rights could impair our ability to compete effectively and reduce demand for our games.
Moreover, in any lawsuit we bring to enforce our intellectual property rights, a court may refuse to stop the other party from using the technology at issue on grounds that our intellectual property rights do not cover the technology in question.
Further, in such proceedings, the defendant could counterclaim that our intellectual property is invalid or unenforceable and the court may agree, in which case we could lose valuable intellectual property rights.
−Removed: litigation of this nature, regardless of outcome or merit, could result in substantial costs, adverse publicity, and diversion of management and technical resources, any of which could adversely affect our business, financial condition, or results of operations.
+Added: Any litigation of this nature, regardless of outcome or merit, could result in substantial costs, adverse publicity, and diversion of management and technical resources, any of which could adversely affect our business, financial condition, or results of operations.
If we fail to maintain, protect, and enhance our intellectual property rights, our business, financial condition, or results of operations may be harmed.
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Our commercial success depends in part on our ability to operate without infringing, misappropriating, or otherwise violating the intellectual property rights of others.
+Added: The mobile and social gaming industry is characterized by a high volume of intellectual property claims, including claims involving gameplay mechanics, user interfaces, monetization features, and branded content, and such claims are often asserted by competitors and non-practicing entities.
We have faced, and may in the future face, allegations that we have infringed, misappropriated, or otherwise violated the trademarks, copyrights, patents, and other intellectual property rights of third parties, including from our competitors and non-practicing entities.
−Removed: We may also be subject to claims that our employees, consultants, or other advisors have wrongfully used or disclosed alleged trade secrets of their former employers or claims asserting ownership of what we regard as our intellectual property.
+Added: We may also be subject to claims that our employees, consultants, or other advisors have wrongfully used or disclosed alleged trade secrets or confidential information of their former employers, or that such parties assert ownership interests in what we regard as our intellectual property.
Intellectual property litigation may be protracted and expensive, and the results are difficult to predict.
As the result of any court judgment or settlement, we may be obligated to cancel the launch of a new game, stop offering a game or certain features of a game in a particular geographic region or worldwide, pay significant royalties, settlement costs, or damages (including potential treble damages and attorneys’ fees if we are found to have willfully infringed intellectual property rights), obtain licenses (which may not be available on acceptable terms or at all), modify our games and features, or develop substitutes.
−Removed: Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us.
+Added: In addition, we could be required to remove or disable content from third-party platforms, implement geo-blocking measures, or modify distribution of affected games or features in specific jurisdictions, which could materially reduce player engagement and revenue.
+Added: Even if we were able to obtain a license, it could be non-exclusive or subject to restrictive terms, thereby giving our competitors and other third parties access to the same technologies or content licensed to us.
Furthermore, even if intellectual property disputes do not result in litigation, the time and resources necessary to resolve them could harm our business, results of operations, financial condition, and reputation.
−Removed: Our games utilize third-party open source software components, which may pose particular risks to our proprietary software, technologies, and games in a manner that could negatively affect our business.
+Added: Our games utilize third-party open source software components, which may pose particular risks to our proprietary software, technologies, and games and could negatively affect our business, financial condition, or results of operations.
We use open source software in our game development and expect to continue to use open source software in the future.
−Removed: Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification, or other contractual protections regarding infringement claims or the quality of the open source software code.
+Added: Our use of open source software is often subject to complex and evolving license terms, and our ability to comply with those terms depends on accurate identification, tracking, and management of open source components across our codebase.
+Added: Use and distribution of open source software may entail greater risks than use of third-party commercial software, because open source licensors generally do not provide support, warranties, indemnification, or other contractual protections, including protections relating to intellectual property infringement, cybersecurity vulnerabilities, or software performance.
To the extent that our games depend upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our games, delay new releases, result in a failure of our games, and injure our reputation.
For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks and, as a result, make our systems more vulnerable to data breaches.
+Added: Such vulnerabilities could require us to devote significant resources to investigation, remediation, patching, disclosure, and incident response, and could expose us to regulatory scrutiny, contractual liability, or reputational harm.
In addition, the public availability of such software may make it easier for others to compromise our platform and games.
−Removed: Moreover, some open source software licenses require users who distribute open source software as part of their proprietary software to publicly disclose all or part of the source code to such software or make available any derivative works or modifications of the open source code on unfavorable terms or at no cost.
−Removed: If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release or license the source code of our proprietary software to the public, and from time to time, we may face claims from third parties that incorporate open source software into their products, claiming ownership of, or demanding release of, the source code of the open source software or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license.
−Removed: The terms of various open source licenses have not been interpreted by courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our use of the open source software.
−Removed: We monitor our use of open source software and try to use open source software in a manner that will not require the disclosure of the source code to our proprietary software or prevent us from charging fees to our players for use of our proprietary software.
−Removed: However, we cannot guarantee that these efforts will be successful, and thus there is a risk that the use of such open source software may ultimately result in litigation, preclude us from charging fees for the use of certain of our proprietary software, require us to replace certain code used in our games, pay damages, settlement fees, or a royalty to use some open source software, make the source code of our games publicly available, or discontinue certain games.
−Removed: Any of the foregoing would have a negative effect on our business, financial condition, or results of operations.
+Added: Moreover, some open source software licenses impose obligations that may be triggered by distribution, modification, or combination of open source software with proprietary software to publicly disclose all or part of the source code to such software or make available any derivative works or modifications of the open source code on unfavorable terms or at no cost.
+Added: If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release or license the source code of our proprietary software to the public, and from time to time, we may face claims from third parties (including claims that may be without merit) that incorporate open source
+Added: software into their products, claiming ownership of, or demanding release of, the source code of the open source software or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license.
+Added: The terms of various open source licenses have not been interpreted by courts and interpretations, where they exist, may vary across jurisdictions or change over time, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our use of the open source software.
+Added: We monitor our use of open source software and seek to use such software in a manner that is intended to avoid obligations to disclose proprietary source code or otherwise limit our ability to commercialize our games;
+Added: however, such efforts may not be effective in all circumstances.
+Added: Accordingly, the use of such open source software may result in litigation;
+Added: require us to pay damages, settlement fees, or royalties;
+Added: limit or preclude our ability to charge fees for certain proprietary software;
+Added: require us to replace or modify code used in our games;
+Added: delay game launches or updates;
+Added: require the removal of features or content;
+Added: disrupt live operations;
+Added: trigger platform enforcement actions;
+Added: require us to make portions of our source code publicly available;
+Added: or force us to discontinue certain games.
+Added: Any of the foregoing could materially adversely affect our business, financial condition, results of operations, or prospects.
We are subject to laws and regulations concerning data privacy, information security, data protection, and consumer protection, and these laws and regulations are continually evolving.
Our actual or perceived failure to comply with these laws and regulations could harm our business.
−Removed: We receive, store, process, use, and share data, some of which contains personal information and other data relating to our players, employees and business contacts, and we enable our players to share their personal information with each
−Removed: other and with third parties, including on the Internet and mobile platforms.
+Added: We receive, store, process, use, and share data, some of which contains personal information and other data relating to our players, employees and business contacts, and we enable our players to share their personal information with each other and with third parties, including on the Internet and mobile platforms.
There are numerous federal, state, and local laws around the world regarding privacy and the storing, sharing, use, processing, disclosure, and protection of personal information, the scopes of which are changing, subject to differing interpretations, and may be inconsistent between jurisdictions or conflict with other rules.
+Added: In addition, heightened regulatory scrutiny of digital business models that rely on in-game purchases, targeted advertising, and virtual currency mechanics has increased the likelihood of investigations, enforcement actions, and civil claims in this area.
In the European Economic Area, or EEA, we are subject to the European Union’s General Data Protection Regulation, or GDPR, which became effective in May 2018, and from January 1, 2021, we are also subject to the UK GDPR and UK Data Protection Act 2018, which retains the GDPR in UK national law.
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In particular, European Union privacy supervisory authorities have focused on compliance with requirements relating to the processing of children’s personal data and ensuring that services offered to children are age appropriate, and we may be subject to regulatory scrutiny and subsequent enforcement actions if we are found to be processing children’s data given the nature of our services.
+Added: The GDPR and similar laws require that we establish a valid legal basis for processing personal data, including for targeted advertising, profiling, and analytics activities.
+Added: Regulatory authorities may disagree with our assessment of the appropriate legal basis for certain processing activities, which could require us to modify our practices or limit certain data uses.
We are subject to European Union rules with respect to cross-border transfers of personal data out of the EEA and the UK.
Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA and the UK to the U.S.
−Removed: On July 16, 2020, the Court of Justice of the European Union ("CJEU") invalidated the EU-US Privacy Shield Framework, or Privacy Shield, under which personal data could be transferred from the EEA to U.S.
−Removed: entities, such as ourselves, who had self-certified under the Privacy Shield scheme.
−Removed: While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances.
−Removed: That program was subsequently replaced by the EU-U.S.
−Removed: Data Privacy Framework adopted July 17, 2023.
−Removed: In addition, after the UK left the EU, the UK enacted the UK GDPR, which, together with the amended UK Data Protection Act of 2018, retains the GDPR in UK national law, but also creates complexity and uncertainty regarding transfers of personal information between the UK and the EU, which could further limit our ability to use and share personal data and require localized changes to our operating model.
+Added: We rely on approved transfer mechanisms, including the EU-U.S.
+Added: Data Privacy Framework and standard contractual clauses, for certain cross-border data transfers.
+Added: Regulatory guidance and enforcement relating to international data transfers continue to evolve, and supervisory authorities may determine that additional safeguards are required.
+Added: If we are unable to lawfully transfer personal data across jurisdictions in which we operate, we may be required to implement costly localization measures, modify our service offerings, or suspend certain data flows.
These recent and ongoing developments will require us to continually review and amend the legal mechanisms by which we make and/or receive personal data transfers from the EEA and UK to the U.S.
−Removed: As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses and other mechanisms cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints, and regulatory investigations or fines, or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
+Added: As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses and other mechanisms cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints, and regulatory investigations or fines, or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the
+Added: geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
In addition, various government and consumer agencies have called for new regulation and changes in industry practices and are continuing to review the need for greater regulation for the collection of information concerning consumer behavior on the Internet, including regulation aimed at restricting certain targeted advertising practices.
+Added: Regulators in the United States, European Union, and other jurisdictions have increased scrutiny of so-called “dark patterns,” addictive design features, manipulative user interface practices, and the marketing of in-game purchases.
+Added: Enforcement in this area may require modifications to user flows, monetization mechanics, disclosures, or consent processes, which could impact player engagement or revenue.
+Added: In addition, certain jurisdictions regulate automated decision-making and profiling activities, which may impact our ability to personalize content, promotions, or pricing.
In the U.S., there are numerous federal and state privacy and data protection laws and regulations governing the collection, use, disclosure, protection, and other processing of personal information, including federal and state data privacy laws, data breach notification laws, and consumer protection laws.
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The CCPA and CPRA could subject us to additional compliance costs as well as potential fines, individual claims and commercial liabilities.
+Added: In addition, numerous other U.S.
+Added: states have enacted comprehensive consumer privacy statutes that create additional compliance obligations, including opt-out rights for targeted advertising and profiling, data minimization requirements, and enhanced disclosure obligations.
+Added: The patchwork of state-level requirements increases compliance complexity and risk of inconsistent interpretations.
+Added: Certain of these laws also provide for private rights of action, statutory damages, or class action remedies, which may increase litigation risk.
+Added: Furthermore, certain privacy laws impose data minimization and storage limitation requirements that may restrict the duration or scope of our data retention practices, potentially affecting analytics, personalization, and marketing effectiveness.
There currently are a number of additional proposals related to data privacy or security pending before federal, state, and foreign legislative and regulatory bodies, and a number of U.S.
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The FTC has taken action against other gaming companies relating to children’s’ privacy, including against Epic Games, the maker of the popular game Fortnite, pursuant to which Epic Games agreed to pay a $275 million fine for alleged violations of COPPA as well as take other corrective actions.
−Removed: While none of our games are directed at children under 13 years of age, if COPPA were to apply to us, failure to comply with COPPA may increase our costs, subject us to expensive and distracting government investigations and could result in substantial fines.
+Added: Although our social casino games are not directed at children under 13 years of age, regulators may evaluate whether certain game features, themes, or marketing practices could appeal to minors.
+Added: If COPPA were to apply to us, failure to comply with COPPA may increase our costs, subject us to expensive and distracting government investigations and could result in substantial fines.
Although we have taken measures to identify which of our games are subject to COPPA due to their child-appealing nature and to comply with COPPA with respect to those games, if COPPA were to apply to us in a manner other than we have assessed or prepared for, our actual or alleged failure to comply with COPPA may increase our costs, subject us to expensive and distracting lawsuits or government investigations, could result in substantial fines or civil damages and could cause us to temporarily or permanently discontinue certain games or certain features and functions in games.
While our social casino games do not target children under 18 years of age as their primary audience, the United Kingdom in 2020 enacted the “Age Appropriate Design Code” (commonly referred to as the “Children’s Code”), a statutory code of practice pursuant to the United Kingdom Data Protection Act 2018, which became enforceable on September 2, 2021.
−Removed: The code requires online services, including our games that are likely to be accessed by children under 18, to put the best interests of the child’s privacy first in the design, development and data-related behavior of the game.
+Added: The code requires online services, including our games that are likely to be accessed by children under 18, to put the best interests of the child’s privacy first in the design, development and data-related behavior of the
The UK government is also separately consulting on legislation in relation to user safety online.
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These may result in substantial additional costs and may necessitate changes to our business practices which may compromise our growth strategy, adversely affect our ability to attract, monetize or retain players, and otherwise adversely affect our business, reputation, legal exposures, financial condition and results of operations.
+Added: Failure to comply with child-specific data protection or online safety requirements could result in regulatory investigations, significant fines, mandated product changes, or restrictions on our ability to offer certain features in affected jurisdictions.
In addition, in some cases, we are dependent upon our platform providers to solicit, collect and provide us with information regarding our players that is necessary for compliance with these various types of regulations.
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These platform providers may dictate rules, conduct or technical features that do not properly comply with federal, state, local and foreign laws, regulations and regulatory codes and guidelines governing data privacy, data protection and security, including with respect to the collection, storage, use, processing, transmission, sharing and protection of personal information and other consumer data.
−Removed: In addition, these platforms may dictate rules, conduct or technical features relating to the collection, storage, use, transmission, sharing and protection of personal information and other consumer data, which may result in substantial costs and may necessitate changes to our business practices, which in turn may compromise our growth strategy, adversely affect our ability to attract, monetize or retain players, and otherwise adversely affect our business, reputation, legal exposures, financial condition and results of operations.
−Removed: Any failure or perceived failure to comply with these platform-dictated rules, conduct or technical features may result in platform-led investigations or enforcement actions, litigation, or public statements against us, which in turn could result in significant liability or temporary or permanent suspension of our business activities with these platforms, cause our players to lose trust in us, and otherwise compromise our growth strategy, adversely affect our ability to attract, monetize or retain players, and otherwise adversely affect our business, reputation, legal exposures, financial condition and results of operations.
+Added: We remain responsible for our compliance obligations even where platform providers control certain data flows or user interface elements.
+Added: If platform practices are inconsistent with applicable laws, or if we are unable to obtain necessary information from such platforms to meet regulatory requirements, we may be exposed to enforcement risk.
+Added: Any failure or perceived failure to comply with these platform-dictated rules, conduct or technical features may result in platform-led investigations or enforcement actions, litigation, or public statements against us, which in turn could result in significant liability, suspension of our business activities on such platforms, reputational harm, and adverse effects on our business, financial condition, and results of operations.
Player interaction with our games is subject to our privacy policy and terms of service.
If we fail to comply with our posted privacy policy or terms of service or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our financial condition and harm our business.
−Removed: regulators, the media or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, and negatively impact our financial condition and damage our business.
+Added: If regulators, the media or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, and negatively impact our financial condition and damage our business.
In the area of information security and data protection, many jurisdictions have passed laws requiring notification when there is a security breach involving personal data or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement.
Our security measures and standards may not be sufficient to protect personal information and we cannot guarantee that our security measures will prevent security breaches.
+Added: Sophisticated threat actors, ransomware groups, and nation-state affiliated actors continue to target digital entertainment and consumer technology companies.
+Added: A significant cybersecurity incident could result in regulatory reporting obligations, contractual liabilities, and litigation in multiple jurisdictions.
A security breach that compromises personal information could harm our reputation and result in a loss of player and/or employee confidence in our games and ultimately in a loss of players, which could adversely affect our business and impact our financial condition.
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These risks could also subject us to liability under applicable security breach-related laws and regulations and could result in additional compliance costs, costs related to regulatory inquiries and investigations, and an inability to conduct our business.
−Removed: In addition, Brazil’s passage of the Lei Geral de Protecao de Dados Pessoais, or LGPD, became effective September 2020 and created new privacy rights for consumers residing in Brazil.
+Added: Other jurisdictions, including Brazil (LGPD), Canada, India, and certain Asia-Pacific countries, have adopted or proposed comprehensive data protection laws, further increasing global compliance complexity.
Compliance with the GDPR, LGPD, CCPA, CPRA, and similar legal requirements has required us to devote significant operational resources and incur significant expenses.
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Additionally, if third parties we work with such as our players or vendors violate applicable laws or our policies, such violations may also put personal information at risk and expose us to potential liability and reputational harm.
−Removed: Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry, or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities.
−Removed: Any of the foregoing could have an adverse effect on our business, financial condition, or results of operations.
−Removed: Our business depends on our ability to collect and use data to deliver relevant content and marketing materials, and any limitation on the collection and use of this data could cause us to lose revenue.
−Removed: When our players use our games, we may collect both personal and non-personal data about our players.
+Added: Regulatory investigations or enforcement actions may also result in mandated audits, monitoring obligations, or restrictions on future data processing activities.
+Added: Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, cash flows, or reputation.
+Added: Our business depends on our ability to collect, use, and share data to deliver relevant content, marketing, and analytics, and limitations on data collection or use could reduce our revenue and impair our business.
+Added: When our players use our games, we may collect both personal and non-personal data about our players, including gameplay behavior, device identifiers, attribution data, and engagement metrics that we use to support game design, personalization, live operations, fraud prevention, analytics, and marketing.
We use some of this data to provide a better experience for our players by delivering relevant content and marketing materials.
Our players may decide not to allow us to collect some or all of this data or may limit our use of this data.
−Removed: Any limitation on our ability to collect data about our players and game interactions would likely make it more difficult for us to deliver targeted
−Removed: content and marketing materials to our players.
+Added: Any limitation on our ability to collect, use, or share data about our players and game interactions would likely make it more difficult to personalize gameplay experiences, optimize live operations, measure marketing effectiveness, deliver targeted content or advertising, and efficiently acquire or retain players.
+Added: We also rely on third-party platforms, analytics providers, attribution vendors, advertising networks, and mediation partners to collect, process, and interpret certain player data, and any limitations, changes, or inaccuracies in these third-party tools or data flows could impair our decision-making and monetization effectiveness.
Interruptions, failures or defects in our data collection, analysis and storage systems, as well as privacy concerns, increasing public scrutiny, and regulatory restrictions regarding the collection of data, could also limit our ability to aggregate and analyze player data.
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We are also subject to evolving EU and UK privacy laws on cookies and similar technologies and eMarketing.
−Removed: In the EU and the UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive were expected to be replaced by an EU regulation known as the ePrivacy Regulation which would have significantly increased fines for non-compliance.
−Removed: However, as of February 11, 2025, the European Commission withdrew the ePrivacy Regulation.
+Added: In the EU and the UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and the regulatory framework governing cookies, tracking technologies, and electronic marketing in the European Union and the United Kingdom remains complex, fragmented across jurisdictions, and subject to evolving regulatory guidance, court decisions, and enforcement practices.
In the EU and the UK, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing.
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If regulators start to enforce the strict approach endorsed in recent guidance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs, and subject us to additional liabilities.
−Removed: Regulation of cookies and similar technologies, and any decline in the use of cookies or similar online tracking technologies as a means to identify and potentially target players, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand our players.
+Added: Regulation of cookies and similar technologies, and any decline in the use of cookies or similar online tracking technologies as a means to identify and potentially target players, may lead to broader restrictions and
+Added: impairments on our marketing and personalization activities and may negatively impact our efforts to understand our players.
+Added: Increased enforcement activity, divergent interpretations across jurisdictions, or changes in regulatory expectations could require us to redesign consent mechanisms, limit data collection, restrict personalization or targeting, or materially reduce the effectiveness of our marketing and analytics activities.
Additionally, Internet-connected devices and operating systems controlled by third parties increasingly contain features that allow device users to disable functionality that allows for the delivery of advertising on their devices, including through Apple’s Identifier for Advertising, or IDFA, or Google’s Advertising ID, or AAID, for Android devices.
Device and browser manufacturers may include or expand these features as part of their standard device specifications.
−Removed: Advertising identifiers are frequently used as a means to deliver targeted advertising to devices.
+Added: Advertising identifiers and similar device-level signals are frequently used to support targeted advertising, attribution, fraud detection, frequency capping, and measurement of player acquisition and engagement.
If players elect to utilize the opt-out mechanisms in greater numbers, our ability to deliver effective advertisements would suffer, which could adversely affect our revenues from in-game advertising.
−Removed: We 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.
+Added: Platform providers may further restrict access to, or eliminate, advertising identifiers or similar tracking technologies, or impose additional consent, disclosure, or technical requirements, in each case at their sole discretion and with limited notice, which could further reduce data availability and impair our ability to monetize, analyze, and grow our player base.
+Added: Any sustained reduction in the availability, accuracy, or usefulness of player data could increase player acquisition costs, reduce advertising revenue, impair our ability to optimize game economies and live operations, and negatively affect our revenue growth, margins, and operating results.
+Added: We rely on assumptions and estimates to calculate certain of our key operating and engagement metrics, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
Certain of our key metrics, including Daily Active Users, or DAU, Monthly Active Users, or MAU, Average Daily Revenue per DAU, or ARPDAU, Daily Paying Users, or DPU, and Daily Payer Conversion, as well as metrics relating to our playAWARDS loyalty program, are calculated using data tracked by our internal analytics systems based on tracking activity of player accounts.
The analytics systems and the resulting data have not been independently verified.
−Removed: While these numbers are based on what we believe to be reasonable calculations for the applicable period of measurement, there are inherent challenges in measuring usage and player engagement across our player base and our recently acquired operations, and factors relating to player activity and systems may impact these numbers.
+Added: These metrics are not based on standardized industry methodologies, and our definitions, assumptions, and calculation methods may differ from those used by other companies, which may limit comparability across the industry.
+Added: While these numbers are based on what we believe to be reasonable calculations for the applicable period of measurement, there are inherent challenges in accurately measuring usage and player engagement across our player base and operations, including the use of multiple devices or accounts by individual players, changes in platform policies or tracking capabilities, system limitations, data latency, fraud or bot activity, and differences in how activity is recorded across games, platforms, or third-party tools.
+Added: In addition, portions of the data used to calculate our metrics are derived from, or influenced by, third-party platforms, analytics providers, attribution vendors, advertising networks, and operating systems, over which we have limited control, and changes or inaccuracies in such third-party data sources could adversely affect the accuracy or consistency of our metrics.
Our rewards partners, content licensors, advertisers, and investors rely on our key metrics as a representation of our performance.
+Added: Analysts, investors, and regulators may also rely on these metrics in evaluating our business, growth prospects, and operating performance.
We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy.
−Removed: If we determine that we can no longer calculate any of our key metrics with a sufficient degree of accuracy, and we cannot find an adequate replacement for the metric, our business, financial condition, or results of operations may be harmed.
−Removed: In addition, if rewards partners, content licensors, or advertisers do not perceive our player metrics to be accurate representations of our user base or player engagement, or if we discover material inaccuracies in our user metrics, our reputation may be harmed and rewards partners, content licensors, or advertisers may be less willing to allocate their resources, intellectual property, or budgets to our games, which could negatively affect our business, financial condition, or results of operations.
+Added: If we determine that we can no longer calculate any of our key metrics with a sufficient degree of accuracy, if we revise or restate previously reported metrics, or if we cannot find an adequate replacement metric, our business, financial condition, or results of operations may be harmed.
+Added: In addition, if rewards partners, content licensors, or advertisers do not perceive our player metrics to be accurate representations of our user base or player engagement, or if we discover material inaccuracies in our user metrics, our reputation may be harmed and rewards partners, content licensors, or advertisers may be less willing to allocate their resources, intellectual property, or budgets to our games, which could negatively affect our business, financial condition, results of operations, and our ability to attract and retain partners, advertisers, and players.
+Added: Any failure to maintain effective internal controls, systems, or processes related to the collection, validation, and reporting of player data could further increase the risk of inaccuracies in our metrics.
Companies 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 our player base.
−Removed: Our players generally need to access the Internet and, in particular, platforms such as Facebook, Apple, Google, Amazon, and our website to play our games.
+Added: Our players generally need to access the Internet and, in particular, platforms and services such as those operated by Facebook, Apple, Google, Amazon, and our website to play our games.
Substantially all of our games rely on data transferred over the Internet, including wireless Internet, and accordingly stable and timely Internet access is necessary to provide a satisfactory player experience to the players of our games.
−Removed: Companies and governmental agencies could block access to any platform, our website, mobile applications, or the Internet generally, or could limit the speed of data transmissions, for a number of reasons such as security or confidentiality concerns or regulatory reasons, or they may adopt policies that prohibit employees from
−Removed: accessing Facebook, Apple, Google, Amazon, and our website or any other social platform.
−Removed: In addition, telecommunications companies may implement certain measures, such as increased cost or restrictions based on the type or amount of data transmitted, that would impact players’ ability to access our games.
−Removed: If companies or governmental entities block or limit such access or otherwise adopt policies restricting players from playing our games, our business could be negatively impacted and could lead to the loss or slower growth of our player base.
+Added: Companies and governmental agencies could block access to any platform, our website, mobile applications, or the Internet generally, or could limit the speed of data transmissions, for a number of reasons, including security, content, privacy, commercial, or regulatory concerns, or they may adopt policies that prohibit employees or users from accessing Facebook, Apple, Google, Amazon, our website, or other online platforms.
+Added: In addition, telecommunications companies may implement certain measures, such as increased costs, data caps, throttling or
+Added: restrictions based on the type or amount of data transmitted that would impact players’ ability to access our games.
+Added: If companies or governmental entities block or limit such access or otherwise adopt policies restricting players from playing our games, our business could be negatively impacted, including through reduced player engagement, loss of players, or slower growth of our player base.
Our business depends on the growth and maintenance of wireless communications infrastructure.
Our success depends on the continued growth and maintenance of wireless communications infrastructure in the United States and internationally.
−Removed: This includes deployment and maintenance of reliable next-generation digital networks with the speed, data capacity and security necessary to provide reliable wireless communications services.
−Removed: Wireless communications infrastructure may be unable to support the demands placed on it if the number of subscribers continues to increase, or if existing or future subscribers increase their bandwidth requirements.
−Removed: Wireless communications have experienced a variety of outages and other delays as a result of infrastructure and equipment failures and could face outages and delays in the future.
+Added: This includes deployment and maintenance of reliable digital and next-generation networks with the speed, data capacity, latency and security necessary to provide reliable wireless communications services.
+Added: Wireless communications infrastructure may be unable to support the demands placed on it if the increases, if usage patterns change, or if existing or future subscribers increase their bandwidth or performance requirements.
+Added: Wireless communications have experienced a variety of outages and other delays as a result of infrastructure, software, or equipment failures, network congestion, or maintenance activities and could face outages and delays in the future.
These outages and delays could reduce the level of wireless communications usage as well as our ability to distribute our games successfully.
−Removed: In addition, changes by a wireless carrier to network infrastructure may interfere with downloads of our games and may cause players to lose functionality in our games that they have already downloaded.
+Added: In addition, changes by a wireless carrier to network infrastructure may interfere with downloads, updates, or live features of our games and may cause players to lose functionality in games they have already downloaded.
This could harm our reputation, business, financial condition and results of operations.
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Any such access, disclosure, or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption of our operations and the services we provide to players, damage to our reputation, and a loss of confidence in our products and services, which could adversely affect our business.
−Removed: Cybersecurity attacks and malicious activity, including breaches, computer malware and ransomware, computer hacking, and insider threats, have become more prevalent in our industry.
+Added: Cybersecurity attacks and malicious activity, including breaches,malware, ransomware, hacking, insider threats, or other malicious activity, have become prevalent in our industry and could adversely affect our business, financial condition, results of operations, or reputation.
Any cybersecurity breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions, loss or corruption of data, software, hardware, or other computer equipment, or the inadvertent transmission of computer viruses or other unauthorized access to our systems caused by employee error, malfeasance, or other disruptions could adversely affect our business, financial condition, results of operations, or reputation.
−Removed: Our information technology has been and in the future may be subject to cybersecurity attacks, viruses, malicious software, break-ins, theft, computer hacking, employee error or malfeasance or other security breaches.
−Removed: While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
−Removed: Hackers and data thieves, state-sponsored threat actors, criminal actors, hacktivists and others are increasingly sophisticated and operate large-scale and complex automated attacks through a variety of vectors such as social engineering/phishing, company insiders, suppliers or providers, and as a result of human or technological errors, including misconfigurations, bugs, or other vulnerabilities in software and hardware.
+Added: While to date we have not experienced a cybersecurity incident that has had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
+Added: Hackers and data thieves, state-sponsored threat actors, criminal organizations, hacktivists, and other malicious actors are increasingly sophisticated and operate large-scale and complex automated attacks through a variety of vectors such as social engineering/phishing, company insiders, suppliers or providers, and as a result of human or technological errors, including misconfigurations, bugs, or other vulnerabilities in software and hardware.
Experienced computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise sensitive personal, proprietary or confidential information, create system disruptions or cause shutdowns.
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Our systems and the data stored on those systems may also be vulnerable to security incidents or security attacks, acts of vandalism or theft, coordinated attacks by activist entities, misplaced or lost data, human errors, or other similar events that could negatively affect our systems and the data stored on those systems, and the data of our business partners.
−Removed: Further, third parties, such as hosted solution providers, that provide services to us could also be a source of security risks in the event of a failure of their own security systems and infrastructure.
−Removed: Cybersecurity attacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools – including artificial intelligence – that circumvent security controls, evade detection and remove forensic evidence.
+Added: Further, third parties, such as hosted solution providers, that provide services to us could also be a source of security risks in the event of a failure of their own security systems and infrastructure, and we may have limited visibility into, or control over, their security controls and incident response practices.
+Added: Cybersecurity attacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools – including artificial intelligence and automation – that circumvent security controls, evade detection and remove forensic evidence.
As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our security systems and infrastructure and the protection of our confidential information and our business.
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our results of operations.
−Removed: Although we have insurance coverage for protecting against cybersecurity attacks, it may not be sufficient to cover all possible claims stemming from security breaches, cybersecurity attacks and other types of unlawful activity, or any resulting disruptions from such events, and we may suffer losses that could have a material adverse effect on our business.
+Added: Although we have insurance coverage for protecting against cybersecurity attacks, it may not be sufficient to cover all losses, claims, or liabilities arising from cybersecurity incidents, or any resulting disruptions from such events, and we may suffer losses that could have a material adverse effect on our business.
We could also be negatively impacted by existing and proposed laws and regulations in the United States, Israel, the European Union, and other jurisdictions in which we operate, as well as government policies and practices related to cybersecurity, data privacy, data localization and data protection.
−Removed: Furthermore, the platforms on which we distribute games may encourage, or require, compliance with certain security standards, such as the voluntary cybersecurity framework released by the National Institute of Standards and Technology, or NIST, which consists of controls designed to identify and manage cybersecurity risks, and we could be negatively impacted to the extent we are unable to comply with such standards.
+Added: Furthermore, the platforms on which we distribute our games may encourage or require compliance with certain security standards, such as voluntary or industry-recognized cybersecurity frameworks released by the National Institute of Standards and Technology (“NIST”), which include controls designed to identify and manage cybersecurity risks.
+Added: To the extent we are unable to comply with such standards or similar requirements imposed by platform providers, our ability to distribute or maintain our games on those platforms could be adversely affected.
In addition, we store sensitive information, including personal information about our employees, and our games involve the storage and transmission of players’ personal information on equipment, networks, and corporate systems run by us or managed by third parties, including Amazon, Apple, Facebook, Google, and Microsoft.
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The costs of compliance with these laws and regulations, including the GDPR, the CCPA, and the CPRA, have increased and may increase in the future.
−Removed: Our corporate systems, third-party systems, and security measures have been subject to a breach and may be breached in the future due to the actions of outside parties, employee error, malfeasance, a combination of these, or otherwise, and, as a result, an unauthorized party may obtain access to, or compromise the integrity of, our data, our employees’ data, our players’ data, or any third-party data we may possess.
−Removed: Any such data security breach could require us to comply with various breach notification laws, create significant exposure for us, including under applicable data privacy laws and regulations such as the GDPR, the CCPA, and the CPRA, in particular if we have failed to take appropriate security measures, may affect our ability to operate, and may expose us to litigation, remediation and investigation costs, increased costs for security measures, loss of revenue, damage to our reputation and potential liability, each of which could be material.
+Added: Our corporate systems, third-party systems, and security measures may be breached in the future due to the actions of outside parties, employee error, malfeasance, a combination of these, or otherwise, and, as a result, an unauthorized party may obtain access to, or compromise the integrity of, our data, our employees’ data, our players’ data, or any third-party data we may possess.
+Added: Any such data security breach could require us to comply with breach notification laws and other regulatory obligations, expose us to significant liability under applicable data privacy laws and regulations (including the GDPR, the CCPA, and the CPRA), particularly if we are found to have failed to implement appropriate security measures, and result in litigation, investigation and remediation costs, increased security expenditures, loss of revenue, operational disruption, and reputational harm.
+Added: Significant cybersecurity incidents could also impair our ability to operate our games, disrupt live operations, delay game launches or updates, or require us to temporarily suspend certain features or services.
+Added: Any of the foregoing could be material and adversely affect our business, financial condition, or results of operations.
Changes in tax laws or tax rulings could materially affect our effective tax rates, financial position, and results of operations.
−Removed: The tax regimes we are subject to or operate under are unsettled and may be subject to significant change.
+Added: The tax regimes to which we are subject in the United States and internationally are complex, evolving, and subject to significant change and interpretation.
Changes in tax laws or changes in interpretations of existing laws could cause us to be subject to additional income-based taxes and non-income based taxes (such as payroll, sales, use, value-added, digital services, excise, net worth, property, and goods and services taxes), which in turn could materially affect our financial position and results of operations.
−Removed: For example, in December 2017, the U.S.
−Removed: federal government enacted the Tax Cuts and Jobs Act, or the 2017 Tax Act.
−Removed: The 2017 Tax Act, which is set to expire at the end of 2025, significantly changed the existing U.S.
−Removed: corporate income tax laws by, among other things, lowering the corporate tax rate, implementing a partially territorial tax system, and imposing a one-time deemed repatriation toll tax on cumulative undistributed foreign earnings.
−Removed: Many of the provisions of the 2017 Tax Act are highly complex and may be subject to further interpretive guidance from the Internal Revenue Service, or IRS, or others.
−Removed: Some of the provisions of the 2017 Tax Act may be changed by Congress and may face future challenges by the World Trade Organization, or WTO, such as the favorable tax treatment for foreign-derived intangible income claimed by us.
−Removed: Although we cannot predict the nature or outcome of such future interpretive guidance, or actions by Congress or WTO, they could adversely impact the consolidated results of our operations and financial position.
−Removed: In addition, many countries in the EU, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could impact our tax obligations.
−Removed: Any significant changes to our future effective tax rate may materially and adversely affect our business, financial condition, results of operations, or cash flows.
+Added: Tax Cuts and Jobs Act of 2017 (“TCJA”) significantly revised U.S.
+Added: corporate income tax laws, including through the adoption of a partially territorial tax system and the introduction of provisions affecting the taxation of foreign earnings.
+Added: Certain provisions of the TCJA are scheduled to expire, phase out, or otherwise change beginning in 2025, and Congress may enact additional tax legislation that could increase U.S.
+Added: corporate tax rates or otherwise materially alter the taxation of domestic and foreign income.
+Added: The interpretation and implementation of existing U.S.
+Added: tax law, including provisions enacted under the TCJA, remain subject to administrative guidance and judicial interpretation.
+Added: Any changes to U.S.
+Added: federal tax law or its interpretation could adversely affect our effective tax rate, cash flows, and financial results.
+Added: In addition, many countries in the EU and other jurisdictions have enacted or are in the process of implementing new tax regimes, including the Organization for Economic Cooperation and Development’s (“OECD”) global minimum tax framework (commonly referred to as “Pillar Two”), which is intended to impose a minimum effective tax rate on multinational enterprises.
+Added: The adoption and implementation of such rules, including related domestic legislation, could increase our effective tax rate, impose additional compliance burdens, or otherwise adversely affect our financial position and results of operations.
+Added: Certain jurisdictions have also enacted or proposed digital services taxes, gross receipts taxes, or similar measures that target revenues derived from digital platforms, online advertising, or cross-border digital activities.
+Added: The application of such taxes to our business, including potential retroactive application or overlapping taxation across jurisdictions, could increase our tax liabilities and compliance costs.
+Added: Any significant changes to applicable tax laws, interpretations, or enforcement practices, or to our future effective tax rate, could materially and adversely affect our business, financial condition, results of operations, or cash flows.
We could be required to collect additional sales, value-added, or similar taxes or be subject to other tax liabilities that may increase the costs of our players to engage with our games and adversely affect our results of operations.
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While we generally are not responsible for taxes generated on games accessed and operated through third-party platforms, we are responsible for collecting and remitting applicable sales, value-added, or other similar taxes for revenue generated on games accessed and operated on our own platforms.
−Removed: Historically, we paid taxes on revenue generated from games accessed on our own platforms in U.S.
−Removed: states where we had a sufficient physical presence or “nexus” based on the location of our U.S.
−Removed: offices and servers.
−Removed: However, there is uncertainty as to what constitutes sufficient physical presence or nexus for a U.S.
−Removed: state to levy taxes, fees, and surcharges for sales made over the Internet.
−Removed: Furthermore, an increasing number of states have considered or adopted laws that impose sales tax collection obligations on out-of-state companies.
−Removed: This is also the case in respect of the EU, where value-added taxes may be imposed on non-EU companies
−Removed: making digital sales to consumers within the EU.
−Removed: In addition, the U.S.
−Removed: Supreme Court ruled in South Dakota v.
−Removed: Wayfair, Inc., or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the customer’s state.
−Removed: In response to Wayfair, or otherwise, state and local governments have adopted and begun to enforce, laws requiring us to calculate, collect, and remit sales taxes in their jurisdictions.
−Removed: Similarly, many foreign jurisdictions have considered or adopted laws that impose value-added, digital services, or similar indirect taxes on companies despite not having a physical presence in the foreign jurisdiction.
−Removed: A successful assertion by one or more states, or other countries or jurisdictions, requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently collect some taxes, could result in substantial liabilities, including taxes on past sales as well as penalties and interest.
+Added: Historically, sales and similar indirect tax obligations in the United States were generally tied to physical presence or “nexus” within a state.
+Added: However, U.S.
+Added: states have increasingly adopted economic nexus standards and marketplace facilitator rules that require remote sellers and digital businesses to collect and remit sales and use taxes based on revenue thresholds or transaction volume, regardless of physical presence.
+Added: As a result, we are required to collect and remit sales and use taxes in a growing number of jurisdictions, and similar standards may be adopted or expanded in additional jurisdictions in the future.
+Added: Similarly, in the European Union and other international jurisdictions, value-added tax (“VAT”), goods and services tax (“GST”), digital services tax, and similar indirect tax regimes have been expanded to apply to non-resident digital service providers, including businesses offering downloadable content, in-game purchases, or advertising services to consumers within those jurisdictions.
+Added: In addition, many foreign jurisdictions have considered or adopted laws that impose value-added, digital services, or similar indirect taxes on companies despite not having a physical presence in the foreign jurisdiction.
+Added: Tax authorities may assert that we have additional tax collection or remittance obligations in jurisdictions where we have not historically collected indirect taxes, including on a retroactive basis.
+Added: A successful assertion by one or more states, countries, or other jurisdictions requiring us to collect taxes where we presently do not do so, or to collect additional taxes in jurisdictions in which we already collect some taxes, could result in substantial liabilities, including taxes on past sales, as well as penalties and interest.
We continually monitor the ever-evolving tax landscape in the jurisdictions in which we operate and those jurisdictions where our players reside.
−Removed: The requirement to collect sales, value-added, or similar indirect taxes by foreign, state, or local governments for sellers that do not have a physical presence in the jurisdiction could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors, or decrease our future sales, which may materially and adversely affect our business, and results of operations.
+Added: The imposition of new or increased indirect taxes could increase the cost to players of engaging with our games or purchasing virtual goods, which may reduce player spending, negatively impact demand for our offerings, or require us to adjust pricing in ways that adversely affect our margins.The requirement to collect and remit sales, VAT, GST, digital services, or similar indirect taxes may create significant administrative burdens, increase compliance costs, require systems modifications, expose us to audit risk, and potentially place us at a competitive disadvantage if similar obligations are not imposed consistently across our industry.
+Added: Any of the foregoing could materially and adversely affect our business, financial condition, or results of operations.
We may have exposure to greater than anticipated tax liabilities.
−Removed: Our income tax obligations are based in part on our corporate operating structure and intercompany arrangements.
+Added: Our income tax obligations are based, in part, on our corporate operating structure,intercompany arrangements, and the allocation of income and expenses among jurisdictions.
The tax laws applicable to our business, including the laws of the U.S.
−Removed: and other jurisdictions, are subject to interpretation, and certain jurisdictions are aggressively interpreting their laws in new ways in an effort to raise additional tax revenue.
+Added: and other jurisdictions, are subject to interpretation, and certain jurisdictions may interpret or apply their tax laws in new or more expansive ways in an effort to raise additional tax revenue.
Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws.
−Removed: However, the taxing authorities of the jurisdictions in which we operate may challenge our methodologies for intercompany arrangements, which could impact our worldwide effective tax rate and harm our financial position and results of operations.
−Removed: In addition, changes to our corporate structure and intercompany agreements, including through acquisitions, could impact our worldwide effective tax rate and harm our financial position and results of operation.
+Added: However, the taxing authorities of the jurisdictions in which we operate may challenge our transfer pricing policies, intercompany arrangements, or allocation methodologies, which could result in additional tax liabilities, penalties, and interest, increase our worldwide effective tax rate, and adversely affect our financial position and results of operations.
+Added: In addition, changes to our corporate structure or intercompany agreements, including as a result of acquisitions, divestitures, or internal reorganizations, could increase our worldwide effective tax rate and adversely affect our financial position and results of operation.
Our ability to utilize our research credit carryforwards and certain other tax attributes may have been limited by “ownership changes” and may be further limited.
−Removed: Our ability to utilize our research credit carryforwards to offset potential future income taxes that would otherwise be due is dependent upon our generation of future income tax liabilities before the expiration dates of the research credit carryforwards, and we cannot predict with certainty when, or whether, we will generate sufficient income tax liabilities to use all of our research credit carryforwards.
−Removed: Under Section 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period), the corporation’s ability to use its research credit carryforwards and other pre-change tax attributes to offset its post-change income taxes may be limited.
−Removed: We may have experienced, and we may in the future experience, ownership changes, either as a result of the Acies Merger or other changes in our stock ownership (some of which are not within our control).
−Removed: As a result, if we incur income tax liability, our ability to use our pre-change research credit carryforwards to offset U.S.
−Removed: federal income taxes may be subject to limitations under Section 383, which could potentially result in increased future tax liability to us.
−Removed: In addition, at the state level, there may be periods during which the use of research credit carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
+Added: Our ability to utilize our research credit carryforwards to offset future income taxes depends on our ability to generate sufficient taxable income before the expiration of such credits, and we cannot predict with certainty when, or whether, we will generate sufficient taxable income to fully utilize these carryforwards.
+Added: Under Section 383 of the Internal Revenue Code of 1986, as amended, and similar state law provisions, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change in equity ownership, by value, over a rolling three-year period), its ability to use research credit carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
+Added: We may have experienced, and may in the future experience, ownership changes, including as a result of the Acies Merger or other changes in our stock ownership (some of which outside our control).
+Added: As a result, if we generate taxable income, our ability to use pre-change research credit carryforwards to offset U.S.
+Added: federal income taxes may be subject to limitations under Section 383, which could result in increased future tax liabilities.
+Added: In addition, at the state level, the use of research credit carryforwards may be suspended or otherwise limited in certain jurisdictions or periods, which could accelerate or permanently increase state income tax liabilities.
Risks Related to Managing Our Business Operations in Israel
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Accordingly, political, economic, and military conditions in Israel and the surrounding region could directly affect our business and operations.
−Removed: In October 2023, Hamas conducted a series of coordinated attacks from the Gaza Strip against the Israeli people, resulting in the outbreak of war between the State of Israel and Hamas.
−Removed: In addition, Israel is engaged in ongoing hostilities with Hezbollah in Lebanon.
−Removed: Any armed conflict or other hostilities involving Israel, or the interruption or curtailment of trade within Israel or between Israel and other countries, could adversely affect our business operations.
−Removed: In addition, political uprisings in various countries in the Middle East in recent years have affected the political stability of those countries and have led to a decline in the regional security situation.
−Removed: Such instability could also lead to
−Removed: deterioration in the political and trade relationships that exist between Israel and these countries.
+Added: Israel and the surrounding region have experienced heightened geopolitical tensions and periods of armed conflict, and the security environment may continue to evolve, including through broader regional escalation.
+Added: Such developments have included, and may in the future include, armed conflict, missile and drone attacks, terrorism, civil unrest, cyberattacks, and other hostilities involving Israel and neighboring countries or non-state actors, and could further expand to involve additional nations, including regional or global powers, or result in broader military engagement.
+Added: These events could adversely affect our business and operations, including through disruptions to our Israel-based studio operations, employee availability and productivity, communications, energy, utility, or other critical infrastructure interruptions, constraints on travel, supply chain disruptions, temporary closure of airspace, limitations on commercial flights, disruptions to public transportation, or increased security and business continuity costs.
+Added: In addition, the region has experienced, and may continue to experience, political instability, armed conflict, terrorist activity, cyberattacks, and other hostilities that may adversely affect Israel’s security environment and economic conditions, including volatility in local financial markets, disruptions in banking operations, or limitations on capital flows.
+Added: Such instability could also lead to deterioration in the political and trade relationships that exist between Israel and other countries in the region.
Any armed conflicts, terrorist activities, or political instability involving Israel or other countries in the region could adversely affect our business operations.
1 unchanged sentence
Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, and policy changes or enactments in Israel or other countries in the region could negatively impact our business.
−Removed: The relationship between the United States and Israel could be subject to fluctuation and periodic tension.
+Added: Geopolitical developments could affect Israel’s relationships with the United States and other countries, including through changes in diplomatic relations, travel advisories, sanctions regimes, trade restrictions, or other governmental actions.
Changes in political conditions in Israel and changes in the state of U.S.
relations with Israel are difficult to predict and could adversely affect our operations.
−Removed: Parties with whom we do business may be disinclined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary to meet with our business partners.
−Removed: In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.
−Removed: Our insurance may not cover losses that we incur as a result of the security situation in Israel or for any resulting disruption in our business operations.
−Removed: Although the Israeli government has in the past covered the reinstatement value of direct damages that were caused by terrorist attacks or acts of war, we cannot be assured that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for any damages we incur.
+Added: Parties with whom we do business may be disinclined to travel to Israel during periods of heightened security risk or regional instability, forcing us to make alternative arrangements when necessary to meet with our business partners.
+Added: In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements or other doctrines or contractual provisions relating to impossibility, impracticability, or frustration of purpose.
+Added: Our insurance may not cover losses that we incur as a result of the armed conflict, terrorism, cyberattacks, or other hostilities involving or affecting Israel or for any resulting disruption in our business operations.
+Added: The Israeli government has in the past provided compensation or other relief for certain direct damages arising from hostilities, but we cannot assure you that any such programs will continue, will apply to us, or will be sufficient to cover our losses.
In addition, the Israeli government may cease providing such coverage in the future, or it may limit the amount or scope of coverage provided, and as a result any such coverage may be insufficient to cover potential damages we may incur.
Any losses or damages incurred by us could have a material adverse effect on our business.
−Removed: Any armed conflicts, political instability, terrorism, cybersecurity attacks or any other hostilities involving, or threatening Israel could negatively affect business conditions generally and harm our results of operations.
+Added: Any armed conflicts, political instability, terrorism, or any other hostilities involving, or threatening Israel could negatively affect business conditions generally and harm our results of operations.
Our operations may be disrupted because of the activation of Israeli citizens for military service.
1 unchanged sentence
Some of our employees in Israel are obliged to perform military reserve duty and, in certain emergency circumstances, such employees may be called to immediate and unlimited active duty.
−Removed: As a result of Israel’s October 7, 2023 declaration of a state of war and activation of Article 8 of the Reserve Service Law (2008), a number of our employees in Israel were activated for military duty and we expect that additional employees could be activated if the war continues or expands.
+Added: In periods of heightened regional conflict or security risk, Israeli authorities may call up reservists for military service, potentially on short notice and for extended periods, including through repeated or rolling mobilizations over an extended timeframe.
+Added: If such call-ups occur, a portion of our employees and service providers in Israel may be required to perform military service, which could reduce our operational capacity, delay product development, require relocation of personnel, increased remote work arrangements under suboptimal conditions, disrupt live game operations, and adversely affect our business continuity.
Any major escalation in hostilities in the region could result in a portion of our employees and service providers in Israel being called up to perform military duty for an extended period.
Our operations could be disrupted by such call-ups.
−Removed: While we have implemented business continuity measures to address the military call-ups, any resulting disruption could materially adversely affect our business operations, financial condition, and results of operations.
+Added: While we have implemented
+Added: business continuity measures designed to mitigate the effects of employee absences and other disruptions, these measures may not be sufficient, and any resulting disruption could materially adversely affect our business operations, financial condition, and results of operations.
+Added: In addition, broader conflict-related disruptions—such as impacts to transportation, communications infrastructure, or third-party service providers—could compound the operational effects of employee call-ups.
We incur operating expenses that are denominated in currencies other than the US Dollar, including expenses denominated in New Israeli Shekels, and as a result our financial condition and results of operations may be harmed by currency exchange rate fluctuations.
2 unchanged sentences
Dollar and our revenues and expenses are reported in U.S.
−Removed: Dollars, we regularly incur operating expenses that are denominated in currencies other than the U.S.
−Removed: A significant portion of our headcount related expenses, consisting principally of salaries and related personnel expenses, as well as leases and certain other operating expenses, are denominated in New Israeli Shekels, or NIS.
+Added: Dollars, we regularly incur operating expenses that are denominated in other currencies.
+Added: A significant portion of our headcount-related expenses, principally salaries and related personnel expenses, as well as leases and certain other operating expenses, are denominated in New Israeli Shekels, or NIS.
We also incur operating expenses denominated in the Hong Kong Dollar, Euro, Serbian Dinar, Vietnamese Dong, Singaporean Dollar, Mexican Peso, and Chilean Peso.
−Removed: As a result, fluctuations in the exchange rates of the NIS and other foreign currencies relative to the U.S.
−Removed: Dollar have an influence on our operating expenses, which are all reported in U.S.
+Added: As a result, fluctuations in the exchange rates of the NIS, including fluctuations resulting from geopolitical instability, armed conflict, or economic disruption in Israel, and other foreign currencies relative to the U.S.
+Added: Dollar affect our operating expenses, which are reported in U.S.
Dollars regardless of the currency in which they are incurred.
−Removed: From time to time, we may enter into currency hedging arrangements to decrease the risk of financial exposure from fluctuations in the exchange rate of foreign currencies relative to the U.S.
−Removed: Such arrangements may not be sufficient to fully protect us, and our operating results and financial condition could be adversely impacted by currency exchange rate fluctuations notwithstanding any risk mitigation measures we might employ from time to time.
+Added: From time to time, we may enter into currency hedging arrangements to reduce our exposure to exchange rate fluctuations.
+Added: Such arrangements may not be sufficient to protect us, and our operating results and financial condition may be adversely affected by currency exchange rate fluctuations notwithstanding any mitigation measures we employ.
+Added: Significant or sustained devaluation of the NIS relative to the U.S.
+Added: Dollar could increase our operating costs when translated into U.S.
+Added: Dollars and adversely affect our results of operations.
General Risk Factors
Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition, results of operations, or prospects.
−Removed: Our financial performance is subject to U.S.
−Removed: economic conditions and their impact on levels of spending by players, our rewards partners, and our advertisers.
−Removed: Economic recessions have had, and may continue to have, far-reaching adverse consequences across many industries, including the gaming industries, which may adversely affect our business and financial condition.
−Removed: In the past decade, the U.S.
−Removed: economy experienced tepid growth following the financial crisis in 2008 and 2009 and experienced a recession in 2020 due to the impact of the COVID-19 pandemic as well as international trade and monetary policy and other changes.
−Removed: economy experiences another recession or any of the relevant regional or local economies suffers a prolonged downturn, our business, financial condition, results of operations, or prospects may be adversely affected.
−Removed: In addition, changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including fluctuation in stock markets resulting from, among other things, trends in the economy as a whole, inflation, unemployment, consumer debt levels, geopolitical events, and other challenges impacting the global economy, including public health emergencies, disruption of supply chains, and military hostilities, may adversely affect consumer confidence or cause a reduction to our players’ disposable income or our rewards partners’ budgets resulting in fewer or less desirable rewards to be offered to our players.
−Removed: In addition, the impact of inflation on our operating expenses may decrease profitability.
+Added: Our financial performance is subject to global and regional economic conditions and their impact on levels of spending by players, our rewards partners, and our advertisers.
+Added: Economic recessions have had, and may continue to have, far-reaching adverse consequences across many industries, including the interactive entertainment industry.
+Added: economy experiences a recession or any of the relevant regional or local economies suffers a prolonged downturn, including through reductions in discretionary consumer spending on in-game purchases or digital entertainment, our business, financial condition, results of operations, or prospects may be adversely affected.
+Added: In addition, changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including volatility in financial markets, trends in the economy as a whole, inflation, unemployment, consumer debt levels, geopolitical events, and other challenges impacting the global economy, including pandemics or other public health crises, disruption of supply chains, and military hostilities, may adversely affect consumer confidence or reduce our players’ disposable income, our rewards partners’ budgets, or advertisers’ spending, resulting in fewer or less desirable rewards to be offered to our players.
+Added: In addition, inflationary pressures may increase our operating expenses and reduce profitability.
+Added: Rising interest rates or constrained capital markets could also limit our access to financing on favorable terms.
Any one of these changes could materially and adversely affect our business, financial condition, results of operations, or prospects.
−Removed: Our results of operations may fluctuate due to various factors and, therefore, our periodic operating results will not be guarantees of future performance.
−Removed: Our financial results and operating metrics have fluctuated in the past and we expect such results to fluctuate in the future.
−Removed: These fluctuations may be due to a variety of factors, some of which are outside of our control and may not fully reflect the underlying performance of our business.
−Removed: Our financial results and operations in any given period may be influenced by numerous factors, many of which we are unable to predict or are outside of our control.
−Removed: Player engagement with our games may decline or fluctuate as a result of a number of factors, including the popularity of the underlying games, the player’s level of satisfaction with our games, our ability to improve and innovate games and to attract new rewards partners, outages and disruptions of online services, the services offered by our competitors, our marketing and advertising efforts, or declines in player activity generally as a result of economic downturns, among others.
−Removed: Any decline or fluctuation in the recurring portion of our business may have a negative impact on our business, financial condition, results of operations, or prospects.
+Added: Our results of operations may fluctuate due to various factors and, accordingly, our periodic operating results should not be relied upon as indicative of future performance.
+Added: Our financial results and operating metrics have fluctuated in the past and we expect such results to fluctuate in the future, particularly on a quarterly basis.
+Added: These fluctuations may be due to a variety of factors, many of which are outside of our control and may not fully reflect the underlying performance or long-term prospects of our business.
+Added: Our financial results in any given period may be influenced by numerous factors, many of which are difficult to predict or outside of our control.
+Added: Player engagement with our games may decline or fluctuate as a result of a number of factors, including the popularity of the underlying games, the players' level of satisfaction with our games, our ability to improve and innovate games and to attract new rewards partners, outages and disruptions of online services, the services offered by our competitors, our marketing and advertising efforts, the timing and success of new game launches, content
+Added: updates, or feature releases, seasonality, or declines in player activity generally as a result of economic downturns, among others.
+Added: Any decline or volatility in the recurring portion of our business could adversely affect our business, financial condition, results of operations, or prospects.
Our reported financial results may be affected by changes in accounting principles generally accepted in the U.S.
−Removed: Generally accepted accounting principles in the U.S., or GAAP, are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles.
−Removed: A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.
−Removed: Any difficulties in implementing any future changes to accounting principles could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.
−Removed: Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.
+Added: Generally accepted accounting principles in the U.S., or GAAP, are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC and other regulatory bodies.
+Added: Changes in these principles or interpretations, including the issuance of new accounting standards or guidance, could have a significant effect on our reported financial results and may require retrospective application to prior periods.
+Added: Difficulties in implementing any future changes to accounting principles could cause us to fail to meet our financial reporting obligations, which could result in regulatory scrutiny or enforcement actions and adversely affect investor confidence.
+Added: Securities analysts may not publish favorable research or reports about our business or may publish no information at all, or may provide limited or inconsistent coverage, which could cause our stock price or trading volume to decline.
Our stock price and trading volume may be heavily influenced by the way analysts and investors interpret our financial information and other disclosures.
+Added: We currently have limited analyst coverage, and there can be no assurance that additional analysts will initiate coverage of our company.
If securities or industry analysts do not publish research or reports about our business, delay publishing reports about our business, or publish negative reports about our business, regardless of accuracy, the trading price and trading volume of our Class A common stock could decline.
−Removed: The trading market for shares of our Class A common stock may be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business.
+Added: The trading market for shares of our Class A common stock is influenced in part by research and reports that industry or financial analysts publish about us and our business.
We do not control these analysts.
−Removed: The analysts who publish information about us may have had relatively little experience with us, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
−Removed: In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue
−Removed: an adverse opinion regarding our stock price, the trading price of our Class A common stock could decline.
−Removed: If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.
−Removed: Even if we are actively covered by analysts, we do not have any control over the analysts or the measures that analysts or investors may rely upon to forecast our future results.
−Removed: Overreliance by analysts or investors on any particular metric to forecast our future results may lead to forecasts that differ significantly from our own.
+Added: The analysts who publish information about us may have limited experience covering our company or our industry, which could affect their ability to accurately forecast our results and which could increase the likelihood that our reported results differ from their estimates.
+Added: In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, the trading price of our Class A common stock could decline.
+Added: If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could reduce investor awareness of, or liquidity in, our stock and cause our stock price or trading volume to decline.
+Added: Even if we are actively covered by analysts, we do not control the assumptions, models or metrics that analysts or investors may rely upon to forecast our future results.
+Added: Overreliance by analysts or investors on any particular metric or assumptions may results in forecasts that differ significantly from our internal expectations, which could contribute to stock price volatility following earnings announcements or other disclosures.
We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all.
2 unchanged sentences
Accordingly, we may need to engage in equity or debt financings to secure additional funds.
+Added: Our ability to incur additional indebtedness or engage in certain financing transactions may also be limited by the terms of our debt arrangements then in effect.
If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock.
−Removed: In June 2021, we entered into the Credit Agreement, which subjects us to certain operational and financial covenants.
−Removed: Any additional debt financing that we secure in the future could involve offering additional security interests and undertaking restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
−Removed: Additionally, current economic and political conditions, including inflation and higher interest rates, have disrupted capital markets, and if we seek to access additional capital or increase our borrowing, there can be no assurance that debt or equity financing may be available to us on favorable terms, if at all.
+Added: In June 2021, we entered into the Credit Agreement that provides for a revolving credit facility and subjects us to certain operational and financial covenants, including limitations on additional indebtedness and certain other corporate actions.
+Added: The Credit Agreement is scheduled to expire on June 24, 2026.
+Added: We have not drawn on the revolving credit facility since its inception;
+Added: however, there can be no assurance that we will not require access to additional liquidity in the future.
+Added: Upon expiration of the Credit Agreement, we might not replace the facility with a new credit arrangement, and, if we do not do so, we would not have access to revolving credit availability.
+Added: In such event, we would be required to rely solely on our existing cash resources and cash flows from operations to fund our operations and strategic initiatives.
+Added: If our cash resources or operating cash flows are insufficient to meet our needs, we may be required to seek alternative sources of capital, which may not be available on acceptable terms, if at all.
+Added: Any additional debt financing that we secure in the future could involve offering additional security interests and undertaking restrictive covenants relating to our capital raising activities and other financial and operational matters, which
+Added: may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
+Added: Additionally, current economic and political conditions, including inflation and higher interest rates, have contributed to volatility and tightening in capital markets, and if we seek to access additional capital or increase our borrowing, there can be no assurance that debt or equity financing would be available to us on favorable terms, or at all.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business, financial condition, or results of operations may be harmed.
Our investments may become impaired by deterioration of the financial markets.
−Removed: Our investment portfolio consist primarily of short-term investments of our available cash.
−Removed: These funds have been invested with a goal of preserving our access to capital, and the investments generally consist of highly liquid, short-term instruments such as money market funds, corporate debt securities, U.S.
+Added: Our investment portfolio consists primarily of short-term investments of our available cash.
+Added: These funds have been invested with the objective of preserving capital and maintaining liquidity, and the investments generally consist of highly liquid, short-term instruments such as money market funds, corporate debt securities, U.S.
government and government agency debt securities, mutual funds, certificates of deposit, and time deposits.
We follow an investment policy and set of guidelines to monitor and help mitigate our exposure to interest rate and credit risk, which guidelines include credit quality and concentration standards to help manage investment risk.
−Removed: Volatility in the global financial markets can negatively impact the value of our investments.
−Removed: Although we intend to manage our investment portfolio for a low risk of material impairment, we cannot predict future market conditions, market liquidity or credit availability, and can provide no assurance that our investment portfolio will remain materially unimpaired.
+Added: Volatility in the global financial markets, including changes in interest rates, credit spreads, and market liquidity, can negatively impact the value of our investments.
+Added: Declines in the fair value of our investments could result in unrealized losses recorded in accumulated other comprehensive income or, if determined to be other-than-temporary, charges to earnings.
+Added: Although we intend to manage our investment portfolio to limit exposure to material impairment and losses, we cannot predict future market conditions, market liquidity or credit availability, including risk of issuer default or counterparty failure, and can provide no assurance that our investment portfolio will not experience material impairment or realized losses.
The requirements of being a public company may strain our resources and divert management’s attention, and the increases in legal, accounting and compliance expenses may be greater than we anticipate.
−Removed: We are a public company, and as such (and particularly after we are no longer an “emerging growth company”) we incur significant legal, accounting, and other expenses that we did not incur as a private company.
−Removed: We are subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the U.S.
−Removed: Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and the listing standards of the Nasdaq, including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls.
+Added: We are a public company, and as such we incur significant legal, accounting, and other expenses associated with operated as a public company.
+Added: We are subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations of the SEC and the listing standards of Nasdaq, including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls.
Compliance with these rules and regulations can be burdensome.
Our management and other personnel need to devote a substantial amount of time to these compliance initiatives.
−Removed: Moreover, these rules and regulations have increased, and will continue to increase, our historical legal and financial compliance costs and will make some activities more time-consuming and costly.
−Removed: In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which will increase when we are no longer an “emerging growth company.” We will need to hire additional accounting and financial staff, and engage outside consultants, all with appropriate public company experience and technical accounting knowledge and maintain an internal audit function, which will increase our operating expenses.
−Removed: Moreover, we could incur additional compensation costs in the event that we decide to pay cash compensation closer to that of other publicly listed companies, which would increase
−Removed: our general and administrative expenses and could materially and adversely affect our profitability.
−Removed: We are evaluating these rules and regulations, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
−Removed: We may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices, or internal control over financial reporting required of public companies.
+Added: Moreover, these rules and regulations have increased and will continue to increase our legal, accounting, and compliance costs.
+Added: In particular, we incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, including management's assessment and independent auditor's attestation.
+Added: We may need to hire additional accounting and financial staff, and engage outside consultants, all with appropriate public company experience and technical accounting knowledge and, where appropriate, maintain and enhance an internal audit function, which could increase our operating expenses.
+Added: Moreover, we may be required to incur additional compensation costs to attract and retain qualified personnel with appropriate public company experience, which would increase our general and administrative expenses and could materially and adversely affect our profitability.
+Added: While we continue to assess and manage these obligations, we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
+Added: As our business evolves, we may not always have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices, or internal control over financial reporting required of public companies.
Our management will need to continually assess our staffing and training procedures to improve our internal control over financial reporting.
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The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company may require costs greater than expected.
−Removed: It is possible that we will be required to expand our employee base and hire additional employees to continue to support our operations as a public company which will increase our operating costs in future periods.
−Removed: We are currently an “emerging growth company” and a "smaller reporting company" within the meaning of the Securities Act and have taken advantage of certain exemptions from disclosure requirements, which could make our securities less attractive to investors and may make it more difficult to compare our performance to the performance of other public companies.
−Removed: We are currently an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act.
−Removed: We also currently qualify as a "smaller reporting company" which makes us eligible for certain reduced reporting requirements.
−Removed: As such, we are eligible for and have taken advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, and we intend to continue to take advantage of such exemptions for as long as we continue to be an emerging growth company, including, but not limited to:
−Removed: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
−Removed: As a result, our stockholders may not have access to certain information they may deem important.
−Removed: We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year in which the market value of our Class A common stock that are held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (2) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year (as indexed for inflation), (3) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period, or (4) the last day of the fiscal year following the fifth anniversary of the date of the first sale of Acies Class A ordinary shares.
−Removed: Investors may find our securities less attractive because we have relied on these exemptions.
−Removed: If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
−Removed: Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
−Removed: The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
−Removed: We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
−Removed: This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
−Removed: We are not currently subject to the auditor attestation requirement of Section 404(b) of the Sarbanes-Oxley Act.
−Removed: However, when we lose our emerging growth company status and become subject to the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, we may not be able to complete our evaluation, testing, and any required remediation in a timely fashion.
−Removed: In addition, our current controls and any new controls that we develop may become inadequate because of poor design and changes in our business, including increased complexity resulting from our international operations and our contemplated international expansion.
−Removed: Any failure to implement and maintain effective
−Removed: internal controls over financial reporting could adversely affect the results of assessments by our independent registered public accounting firm and its attestation reports.
−Removed: If we are unable to certify the effectiveness of our internal controls, or if our internal controls have one or more material weaknesses, we may not detect errors timely, our financial statements could be misstated, we could be subject to regulatory scrutiny and a loss of confidence by stakeholders, which could harm our business and adversely affect the trading price of our Class A common stock.
−Removed: Our workforce and operations have grown substantially since our inception.
−Removed: If we are unable to effectively manage our workforce, our financial performance and future prospects will be adversely affected.
−Removed: Since our inception, we have experienced growth in the U.S.
−Removed: and internationally.
−Removed: This expansion increases the complexity of our business and has placed, and will continue to place, significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions.
−Removed: We may not be able to manage our expanded business operations, which could damage our reputation and negatively affect our operating results.
−Removed: Properly managing our workforce requires us to continue to hire, train, and manage qualified employees and staff, including engineers, operations personnel, finance and accounting staff, and sales and marketing staff, and to improve and maintain our technology.
−Removed: If our new hires perform poorly, if we are unsuccessful in hiring, training, managing, and integrating these new employees and staff, or if we are not successful in retaining our existing employees and staff, our business may be harmed.
−Removed: Moreover, in order to optimize our organizational structure, we have implemented reductions in force and may in the future implement other reductions in force.
−Removed: Any reduction in force may yield unintended consequences and costs, such as attrition beyond the intended reduction in force, the distraction of employees, and reduced employee morale.
+Added: We may be required to expand our employee base to support our ongoing public company reporting, compliance, and internal control obligations, which would increase our operating costs in future periods.
+Added: We qualify as a smaller reporting company and are subject to accelerated filer requirements, which may affect investor perceptions and increase our compliance costs.
+Added: We qualify as a “smaller reporting company” as defined under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
+Added: As a smaller reporting company, we are eligible to take advantage of certain reduced disclosure requirements applicable to public companies, including scaled disclosure in our annual and quarterly
+Added: reports and reduced disclosure regarding executive compensation and certain other information in our proxy statements.
+Added: As a result, our stockholders may not have access to the same level of information that is available to stockholders of companies that do not qualify as smaller reporting companies, which may make our securities less attractive to investors, potentially resulting in increased stock price volatility or reduced trading liquidity, and may make it more difficult to compare our performance to that of other public companies.
+Added: Although we ceased to qualify as an “emerging growth company” as of December 31, 2025, we remain subject to the reporting and compliance requirements applicable to accelerated filers.
+Added: As an accelerated filer, we are required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, which requires our independent registered public accounting firm to attest to and report on the effectiveness of our internal control over financial reporting.
+Added: Compliance with these requirements increases our costs, requires significant management time and attention, and places additional demands on our internal control environment.
+Added: Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.
+Added: However, internal controls can only provide reasonable assurance and may not prevent or detect all errors or misstatements.
+Added: If we are unable to maintain effective internal control over financial reporting, or if one or more material weaknesses are identified in the future, management may be unable to conclude that our internal controls are effective, and our independent registered public accounting firm may be unable to issue an unqualified attestation report.
+Added: Any such circumstances could result in material misstatements in our financial statements, subject us to regulatory scrutiny, damage investor confidence, and adversely affect the trading price of our Class A common stock.
+Added: In addition, if our public float, revenues, or other circumstances change such that we no longer qualify as a smaller reporting company or our filer status otherwise changes under SEC rules, the scope and nature of our disclosure, reporting, and compliance obligations could change.
+Added: Any such changes could further increase our compliance costs, affect investor perceptions, and impact the comparability of our financial statements to those of other public companies.
+Added: If we are unable to effectively manage our workforce and organizational structure, including changes to our operations, our financial performance and future prospects could be adversely affected.
+Added: Our operations in the U.S.
+Added: and internationally increase the complexity of our business.
+Added: This operational complexity has placed, and will continue to place, significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions.
+Added: We may not be able to manage our business operations effectively, which could damage our reputation and negatively affect our operating results.
+Added: Properly managing our workforce requires us to effectively hire, train, retain, redeploy, and, where appropriate, reduce our employee and contractor base, including engineers, operations personnel, finance and accounting staff, and sales and marketing staff, and to improve and maintain our technology.
+Added: If our new hires perform poorly, if we are unsuccessful in integrating and supporting our employees effectively, our business may be harmed.
+Added: From time to time, in order to align our cost structure with our strategic priorities, we may implement workforce reductions, reorganizations, or other operational changes.
+Added: Any reduction in force may yield unintended consequences and costs, including delays in product development, disruption of live game operations, loss of institutional knowledge, reduced operational efficiency, and increased execution risk.
Any reduction in force also could adversely affect our reputation as an employer, which could make it more difficult for us to hire new employees in the future and increase the risk that we may not achieve the anticipated benefits from the reduction in force.
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Our failure to upgrade our technology or network infrastructure effectively to support our business operations could result in unanticipated disruptions.
−Removed: To manage the growth of our operations and personnel and improve the technology that supports our business operations, as well as our financial and management systems, disclosure controls and procedures, and internal controls over financial reporting, we will be required to commit substantial financial, operational, and technical resources.
+Added: To manage changes in our operations and personnel and and to maintain and enhance the technology that supports our business operations, as well as our financial and management systems, disclosure controls and procedures, and internal control over financial reporting, we will be required to commit substantial financial, operational, and technical resources.
Our current and planned personnel, systems, procedures, and controls may not be adequate to support our future operations.
−Removed: If we are unable to expand our operations and hire additional qualified personnel in an efficient manner, or if our operational technology is insufficient to reliably service our games, we could potentially face difficulties in retaining players, which would adversely affect our business, financial condition, and operating results.
−Removed: Our organizational structure is complex and will continue to grow as we add additional employees.
−Removed: We will need to scale our operational, financial, and management controls as well as our reporting systems and procedures to support the growth of our organizational structure.
−Removed: We will require capital and management resources to grow and mature in these areas.
−Removed: If we are unable to effectively manage the growth of our business, the quality of our games may suffer, and we may be unable to address competitive challenges, which would adversely affect our business, operations, and financial condition.
−Removed: Continued growth and success will depend on the performance of our current and future employees, including certain key employees.
−Removed: Recruitment and retention of these individuals is vital to growing our business and meeting our business plans.
−Removed: The loss of any of our key executives or other key employees could harm our business.
+Added: If we are unable to appropriately scale, restructure, or support our operations and personnel in an efficient manner, or if our operational technology is insufficient to reliably service our games, we could potentially face difficulties in retaining players, which would adversely affect our business, financial condition, and operating results.
+Added: Our organizational structure is complex and may change over time as we adjust our workforce and operational footprint.
+Added: We will need to maintain and, where appropriate, adjust our operational, financial, and management controls as well as our reporting systems and procedures to support our organizational structure, including changes thereto.
+Added: We will require capital and management resources to support and strengthen these areas.
+Added: If we are unable to effectively manage changes to our business and organizational structure, including workforce transitions and operational realignment, the quality of our games may suffer, and we may be unable to address competitive challenges, which would adversely affect our business, operations, and financial condition.
+Added: Our success depends on the performance and retention of our employees, including certain key employees.
+Added: The loss of key executives or other key employees could harm our business.
Our ability to compete and grow depends in large part on the efforts and talents of our employees and executives.
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Pascal is critical to our vision, strategic direction, culture, products, and technology, and the continued retention of our entire senior management team is important to the success of our operating plan.
−Removed: We do not have employment agreements with members of our senior management team, all of whom are "at-will" employees, and we do not maintain key man insurance for members of our senior management team.
−Removed: The loss of any member
−Removed: of our senior management team could cause disruption and harm our business, financial condition, results of operations, or reputation.
+Added: We do not have long-term employment agreements with members of our senior management team, all of whom are "at-will" employees, and we do not maintain key man insurance for members of our senior management team.
+Added: The loss of any member of our senior management team could cause disruption and harm our business, financial condition, results of operations, or reputation.
In addition, our ability to execute our strategy depends on our continued ability to identify, hire, develop, motivate, and retain highly skilled employees, particularly in the competitive fields of game design, product management, engineering, and data science.
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Furthermore, we have observed labor shortages, increased competition for talent, and a rise in employee attrition.
−Removed: We will continue to devote increased efforts to maintaining the collaborative culture of the corporate headquarters and each of our domestic and international game studios through the use of videoconferencing and other online communication and sharing tools, and to monitoring the health, safety, morale, and productivity of our employees, including new employees, as we evaluate the impacts of this challenging situation on our business and employees.
+Added: We must continue to maintain effective communication, collaboration, and alignment across our domestic and international teams, including during periods of organizational change, to preserve employee morale, productivity, and operational continuity.
We believe that two critical components of our success and our ability to retain our best people are our culture and our competitive compensation practices.
−Removed: As we continue to operate as a public company, we may find it difficult to maintain our entrepreneurial, execution-focused culture.
−Removed: In addition, any volatility in our operating results and the trading price of our Class A common stock may cause our employee base to be more vulnerable to be targeted for recruitment by competitors.
+Added: Operating as a public company and managing organizational change may make it more difficult to maintain our entrepreneurial, execution-focused culture.
+Added: In addition, any volatility in our operating results and the trading price of our Class A common stock may may increase the likelihood that our employees are targeted for recruitment by competitors.
While we believe we compete favorably, competition for highly skilled employees is intense.
If we are unable to identify, hire, and retain our senior management team and our key employees, our business, financial condition, or results of operations could be harmed.
−Removed: Moreover, if our team fails to work together effectively to execute our plans and strategies on a timely basis, our business, financial condition, or results of operations could be harmed.
+Added: Moreover, if our teams fail to work together effectively to execute our strategic initiatives in a timely manner, our business, financial condition, or results of operations could be harmed.
Any restructuring actions and cost reduction initiatives that we have undertaken or may undertake in the future may not deliver the expected results and these actions may adversely affect our business.
−Removed: We have implemented restructurings in the past and may implement restructurings in the future for purpose of reducing costs, streamlining operations, and improving cost efficiencies to better align our operating expenses with our revenue.
−Removed: Such restructurings may include reducing our headcount, rationalizing our product pipeline, reducing marketing and technology expenditures, and downsizing or closing certain game studios.
−Removed: We plan to continue to manage costs to better and more efficiently manage our business.
−Removed: Our restructuring plans and other such efforts could result in disruptions to our operations and adversely affect our business, financial condition, or results of operations.
−Removed: We actively monitor our costs, however, if we do not fully realize or maintain the anticipated benefits of any restructuring actions and cost reduction initiatives, our business, financial condition, or results of operations could be adversely affected, and additional restructuring actions and cost reduction initiatives may be necessary.
−Removed: In addition, we cannot be sure that such actions and initiatives will be as successful in reducing our overall expenses as expected or that additional costs will not offset any such reductions.
+Added: We have implemented restructurings in the past and may implement additional restructurings in the future to reduce costs, streamline operations, and align our operating expenses with our revenue and strategic priorities.
+Added: Such restructurings may include reducing our headcount, rationalizing our product pipeline, reducing marketing and technology expenditures, downsizing or closing certain game studios, consolidating functions, exiting certain markets, or divesting non-core assets.
+Added: Restructuring actions may result in disruptions to our operations, including delays in product development, disruption of live game operations, loss of key personnel or institutional knowledge, reduced operational flexibility, and increased execution risk, any of which could adversely affect our business, financial condition, or results of operations.
+Added: If we do not fully realize or sustain the anticipated benefits of any restructuring actions and cost reduction initiatives, our business, financial condition, or results of operations could be adversely affected, and we may need to undertake additional restructuring measures.
+Added: In addition, the anticipated cost savings may be offset by restructuring charges, transition costs, retention payments, consulting expenses, facility exit costs, or other unforeseen expenses.
If our operating costs are higher than we expect or if we do not maintain adequate control of our costs and expenses, our operating results will suffer.
−Removed: In addition, any cost reduction measures could negatively impact our business, financial condition, or results of operations including but not limited to, delaying the introduction of new games, features, or content, delaying introduction of new technology, impacting our ability to react nimbly to game or technology issues, or impacting employee retention and morale.
−Removed: Our systems and operations are vulnerable to damage or interruption from natural disasters, power losses, telecommunications failures, cybersecurity attacks, terrorist attacks, acts of war, human errors, break-ins and similar events.
−Removed: We have in the past and may continue to experience disruption as a result of catastrophic events.
−Removed: The occurrence of a catastrophic event may result in our inability to continue business operations and may result in system interruptions, reputational harm, delays in application development, lengthy interruptions in our services, breaches of data security and loss of critical data, such as player, customer and billing data, as well as intellectual property rights, software, or other relevant data regarding operations, and there can be no assurances that our insurance policies will provide coverage for any resulting losses, which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: In addition, cost reduction measures could negatively impact our business by delaying the introduction of new games, features, or content, impairing our ability to invest in technology, reducing our ability to respond quickly to game performance or technology issues, or adversely affecting employee retention and morale.
+Added: In addition, the anticipated cost savings from any restructuring actions may not directly or fully translate into a corresponding reduction in our overall operating expenses.
+Added: A portion of any expected savings may be redeployed to fund strategic initiatives, invest in product development, support core franchises, or enhance technology and infrastructure.
+Added: result, our overall operating expenses may not decline by the full amount of any announced cost reductions.
+Added: Furthermore, restructuring initiatives typically require time to implement, and any associated cost savings may be realized gradually over several quarters.
+Added: Our estimates of anticipated savings and timing are subject to assumptions and execution risks, and actual results may differ materially from our expectations.
+Added: Our systems and operations are vulnerable to damage or interruption from natural disasters, power losses, telecommunications failures, cybersecurity attacks, terrorist attacks, acts of war, civil unrest, geopolitical instability, pandemics or other public health crises, supply chain disruptions, human errors, break-ins and similar events.
+Added: We have in the past and may in the future experience disruption as a result of catastrophic events.
+Added: The occurrence of a catastrophic event could impair our ability to operate our business and may result in system interruptions, reputational harm, delays in game development, prolonged service outages, disruption of live operations, breaches of data security, or loss of critical data, including player, customer, billing, and proprietary information.
+Added: Our operations depend on cloud-based infrastructure and third-party service providers, and any disruption to their systems could adversely affect our ability to deliver our games and services.
+Added: Although we maintain business continuity and disaster recovery plans and insurance coverage, such measures may not be sufficient to prevent material disruption or fully offset resulting losses.
+Added: Certain of our development and operational personnel are located in regions that have experienced military conflict or geopolitical instability, which may increase the risk of disruption to our business.
Our insurance may not provide adequate levels of coverage against claims.
−Removed: We believe that we maintain insurance customary for businesses of our size and type.
−Removed: However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure.
−Removed: Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis.
−Removed: Such losses could adversely affect our business prospects, results of operations, cash flows, and financial condition.
+Added: We maintain insurance coverage that we believe is customary for businesses of our size and industry.
+Added: However, certain types of losses, including losses arising from cybersecurity incidents, intellectual property disputes, employment-related claims, regulatory investigations, business interruption, or geopolitical events, may be uninsured, uninsurable, or not economically reasonable to insure.
+Added: In addition, any loss we incur could exceed applicable policy limits, may be subject to significant deductibles or exclusions, or may not be covered due to disputes over policy interpretation, and insurance proceeds may not be recovered in a timely manner, if at all.
+Added: Any underinsured losses could adversely affect our business, financial condition, results of operations, cash flows, or reputation.
Because we are a “controlled company” within the meaning of the Nasdaq rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies.
−Removed: So long as more than 50% of the voting power for the election of directors is held by an individual, a group or another company, we will qualify as a “controlled company” within the meaning of the Nasdaq corporate governance standards.
+Added: So long as more than 50% of the voting power for the election of directors is held by a group, we qualify as a “controlled company” within the meaning of the Nasdaq corporate governance standards.
As of December 31, 2025, the Founder Group controlled more than 70% of the combined voting power of our outstanding capital stock.
−Removed: As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards and are not subject to the requirements that would otherwise require us to have:
+Added: As a result, the Founder Group has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors, amendments to our certificate of incorporation and bylaws, and the approval of significant corporate transactions.
+Added: Accordingly, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards and are not subject to the requirements that would otherwise require us to have:
(i) a majority of independent directors;
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and (iv) director nominees selected, or recommended for the Board of Directors selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors.
−Removed: As of the date of this Annual Report on Form 10-K, we do not utilize any of these exemptions, however, should we later choose to do so, you may not have the same protections afforded to stockholders of companies that are subject to all of these corporate governance requirements.
−Removed: The Founder Group may have its interest in us diluted due to future equity issuances or its own actions in selling shares of our Class B common stock, in each case, which could result in a loss of the “controlled company” exemption under the Nasdaq listing rules.
−Removed: We would then be required to comply with those provisions of the Nasdaq listing requirements.
−Removed: If we fail to continue to meet the listing standards of Nasdaq, our common stock may be delisted, which could have a material adverse effect on the price and liquidity of our common stock.
−Removed: Our common stock is currently listed on the Nasdaq Global Market.
−Removed: Nasdaq has requirements that a company must meet in order to remain listed on Nasdaq.
−Removed: In particular, Nasdaq rules require us to maintain a minimum bid price of $1.00 per share of our common stock (the “Bid Price Requirement”).
−Removed: If the closing bid price of our common stock falls below $1.00 per share for 30 consecutive trading days or we do not meet other listing requirements, we would fail to be in compliance with Nasdaq listing standards.
−Removed: There can be no assurance that we will continue to meet the Bid Price Requirement or any other Nasdaq continued listing requirement in the future.
−Removed: If we fail to satisfy Nasdaq continued listing requirements, the Nasdaq Global Market may take steps to delist our Class A common stock.
−Removed: Such a delisting would likely have a negative effect on the price of our Class A common stock and would significantly impair the ability of shareholders to purchase or sell shares.
−Removed: In the event of a delisting, there can be no assurance that any action taken by the Company to restore compliance with applicable listing requirements would allow the Company’s Class A common stock to become listed again, stabilize the market price or improve the liquidity of the Class A common stock, or prevent future non-compliance with applicable listing requirements.
−Removed: The dual class structure of our common stock has the effect of concentrating voting power with Andrew Pascal, our Chairman and Chief Executive Officer, which limits an investor’s ability to influence the outcome of important transactions, including a change in control.
+Added: As of the date of this Annual Report on Form 10-K, we do not rely on any of these exemptions.
+Added: However, we may elect to rely on one or more of these exemptions in the future, in which case our stockholders may not have the same corporate governance protections afforded to stockholders of companies that are subject to all of these requirements.
+Added: The Founder Group's ownership interest could be diluted as a result of future equity issuances or sales of shares of our Class B common stock, which could cause us to cease to qualify as a “controlled company” under the Nasdaq listing rules.
+Added: If we cease to qualify as a controlled company, we would be required to comply with the applicable Nasdaq corporate governance requirements within the prescribed transition periods.
+Added: If we fail to meet the listing standards of Nasdaq, our Class A common stock may be delisted, which could have a material adverse effect on the price and liquidity of our Class A common stock.
+Added: Our Class A common stock is currently listed on the Nasdaq Global Market, which requires us to satisfy certain continued listing standards, including a minimum bid price of $1.00 per share.
+Added: On November 5, 2025, we received a notice from the Listing Qualifications Department of Nasdaq indicating that we were not in compliance with Nasdaq Listing Rule 5450(a)(1) because the closing bid price of our Class A common stock had been below $1.00 per share for 30 consecutive business days.
+Added: In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, ending on May
+Added: 4, 2026, to regain compliance by having the closing bid price of our Class A common stock meet or exceed $1.00 per share for a minimum of ten consecutive business days, or such longer period as Nasdaq may require.
+Added: If we do not regain compliance during this initial compliance period, we may be eligible for an additional compliance period if we satisfy the applicable listing and quantitative requirements for a transfer to the Nasdaq Capital Market.
+Added: However, there can be no assurance that we will be eligible for such additional time, that we will regain compliance with the minimum bid price requirement, or that we will otherwise continue to satisfy Nasdaq’s continued listing standards.
+Added: If we fail to regain compliance with the minimum bid price requirement or any other applicable Nasdaq listing requirement, Nasdaq may delist our Class A common stock.
+Added: A delisting would likely result in a significant decline in the market price of our Class A common stock, substantially reduce its liquidity, and impair investors’ ability to buy or sell our shares.
+Added: Delisting could also negatively affect our ability to raise additional capital, limit analyst coverage of our company, reduce our visibility in the public markets, and cause certain institutional investors or stockholders to reduce or eliminate their holdings of our securities.
+Added: Although we may consider various available options to regain compliance with Nasdaq listing standards, there can be no assurance that any such actions would be successful or that compliance could be maintained in the future.
+Added: If our Class A common stock were delisted from Nasdaq and we were unable to list our securities on another national securities exchange, our securities could be quoted on an over-the-counter market.
+Added: In that event, trading in our securities could become more limited, less efficient, and more volatile.
+Added: In addition, our Class A common stock could be deemed a “penny stock” under applicable SEC rules, which would subject broker-dealers to more stringent regulatory requirements and could further reduce trading activity, market liquidity, and investor interest.
+Added: Any of these events could materially adversely affect the market price of our securities and the ability of investors to realize value from their investment.
+Added: The dual class structure of our common stock has the effect of concentrating voting power with Andrew Pascal, our Chairman and Chief Executive Officer, which limits investors' ability to influence the outcome of important matters, including a change in control.
Shares of our Class B common stock are entitled to twenty (20) votes per share, while shares of our Class A common stock are entitled to one (1) vote per share.
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Accordingly, as of December 31, 2025, the Founder Group, including Mr.
−Removed: Pascal, beneficially owned or controlled more than 70% of the combined voting power of our outstanding common stock, and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments to our organizational documents and any merger, consolidation, sales of all or substantially all of our assets or other major corporate transactions.
−Removed: Pascal may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.
−Removed: This concentrated control may have the effect of delaying, preventing, or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and may ultimately affect the market price of shares of our Class A common stock.
+Added: Pascal, beneficially owned or controlled more than 70% of the combined voting power of our outstanding common stock and has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors, amendments to our organizational documents, and approval of any merger, consolidation, sale of all or substantially all of our assets, or other significant corporate transactions.
+Added: Pascal may have interests that differ from those of other stockholders and may vote in a manner that other stockholders to not support or that may be adverse to their interests.
+Added: This concentrated control may have the effect of discouraging, delaying, preventing, or deterring a merger, acquisition, or other change in control of our company that other stockholders may consider favorable, may deprive stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and may adversely affect the market price, liquidity or valuation of shares of our Class A common stock.
We cannot predict the impact our dual class structure may have on the stock price of our Class A common stock.
−Removed: We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences.
−Removed: For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes.
−Removed: Under these policies, our dual class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-
−Removed: traded funds, and other investment vehicles that attempt to passively track those indices will not be investing in our stock.
−Removed: It is unclear what effect, if any, these policies will have on the valuations of publicly traded companies excluded from such indices, but it is possible that they may depress valuations, as compared to similar companies that are included.
−Removed: As a result, the market price of shares of our Class A common stock could be adversely affected.
+Added: We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock, reduced liquidity, negative publicity, or other adverse consequences.
+Added: Certain index providers have adopted policies that restrict or prohibit the inclusion of companies with multiple-class share structures in certain of their indexes.
+Added: Under these policies, our dual class capital structure may make us ineligible for inclusion in certain indices, and mutual funds, exchange-traded funds, and other investment vehicles that seek to track those indices may be precluded from investing in our stock.
+Added: These policies may reduce demand for our Class A common stock relative to comparable companies that are included in such indices and could adversely affect the market price, trading volume, or valuation of our Class A common stock.
We may issue preferred stock or additional common stock, including under the 2021 Plan and 2021 Employee Stock Purchase Plan.
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• may adversely affect prevailing market prices for our Class A common stock.
−Removed: Legal proceedings in connection with the Acies Merger, the outcomes of which are uncertain, could divert management’s attention and adversely affect our daily operations.
−Removed: On April 6, 2022, a class action lawsuit was filed in the United Stated District Court, Northern District of California, by a purported Company shareholder in connection with alleged federal securities law violations:
−Removed: PLAYSTUDIOS, Inc.
−Removed: (the “Felipe Complaint”).
−Removed: On July 15, 2022, the lawsuit was transferred to the United States District Court of Nevada, Southern District.
−Removed: On October 4, 2022, the plaintiffs filed an amendment to the Felipe Complaint.
−Removed: The Felipe Complaint names the Company, several current and former board members of the Company, board members and officers of Acies Acquisition Corp., and Andrew Pascal, the Company’s Chairman and CEO, as defendants.
−Removed: The Felipe Complaint alleges misrepresentations and omissions regarding the state of the Company’s development of the Kingdom Boss game and its financial projections and future prospects in the S-4 Registration Statement filed by Acies that was declared effective on May 25, 2021, the Proxy Statement filed by Acies on May 25, 2021, and other public statements that touted Old PLAYSTUDIOS’ financial performance and operations, including statements made on earnings calls and the Amended S-1 Registration Statement filed by the Company that was declared effective on July 30, 2021.
−Removed: The Felipe Complaint alleges that the misrepresentations and omissions resulted in stock price drops of 13% on August 12, 2021, and 5% on February 25, 2022, following (i) the Company’s release of financial results for the second quarter of 2021, ended on June 30, 2021, and (ii) the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and issuance of a press release summarizing financial results for the fourth quarter and year ended December 31, 2021, respectively.
−Removed: The Felipe Complaint seeks an award of damages for an unspecified amount.
−Removed: On January 20, 2025, the parties reached an agreement in principle to settle the matter.
−Removed: The settlement is subject to the parties’ negotiation of a formal stipulation of settlement and all related documentation, which is currently in process.
−Removed: The settlement also will be subject to preliminary and final approval by the federal district court in which the case is pending.
−Removed: The matter will not be fully resolved until such approvals are issued, the case is dismissed, and judgment is entered by the court.
−Removed: Defending the Felipe Complaint and any such additional lawsuits could require us incur significant costs and draw the attention of the management team away from the daily operations of our business.
−Removed: Further, the defense or settlement of any lawsuit or claim may adversely affect our business, financial condition, results of operations, and cash flows.
−Removed: Warrants may be exercised for our Class A common stock, and Earnout Shares and Sponsor Shares may become issuable or vest, each of which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
−Removed: Outstanding Warrants to purchase an aggregate of 10,996,631 shares of our Class A common stock became exercisable in accordance with the terms of the Warrant Agreement governing those securities on October 27, 2021.
−Removed: The exercise price of these Warrants is $11.50 per share.
−Removed: The Company completed an offer to purchase each of its Warrants in the Tender Offer (a s defined and described in Note — Warrant Liabilities in the accompanying consolidated financial statements) on May 13, 2022, in which holders of 1,792,463 outstanding Public Warrants tendered their Public Warrants for a purchase
−Removed: price of $1.00 per warrant.
−Removed: Following redemption of the Public Warrants tendered in the Tender Offer, approximately 5.4 million Public Warrants and approximately 3.8 million Private Warrants remained outstanding.
+Added: Warrants may be exercised for our Class A common stock, and Earnout Shares and Sponsor Shares may become issuable or vest, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
+Added: As of December 31, 2025, we had approximately 9.2 million Warrants outstanding (consisting of approximately 5.4 million Public Warrants and 3.8 million Private Warrants) to purchase shares of our Class A common stock at an exercise price of $11.50 per share, which are exercisable and expire five years after the completion of our business combination transaction.
+Added: The Warrants are scheduled to expire on June 21, 2026.
+Added: The Warrants and Earnout Shares are subject to exercise or vesting price thresholds that exceed the recent trading price of our Class A common stock, and accordingly may not be exercised or vest unless the market price of our Class A common stock increases above those thresholds prior to expiration.
In addition, up to 15,000,000 contingently issuable shares (the "Earnout Shares") may be issued, and up to 900,000 unvested shares previously issued to the sponsor of Acies (the " Sponsor Shares") may vest and become unrestricted, upon the closing price of the Class A common stock exceeding $12.50 and $15.00 per share, respectively, for any 20 trading days within any 30-trading day window commencing on or after November 18, 2021 and ending no later than June 21, 2026 (the Earnout Shares will also vest based on the price targets in connection with a sale of our company).
−Removed: To the extent such Warrants are exercised and the Earnout Shares are issued or the Sponsor Shares vest and become unrestricted, additional shares of our Class A common stock will be issued or become eligible for resale, which will result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market.
−Removed: Actual or potential sales of Earnout Shares or Sponsor Shares in the public market, or the fact that additional shares are issuable upon exercise of such Warrants, could adversely affect the market price of our Class A common stock.
+Added: To the extent such Warrants are exercised and the Earnout Shares are issued or the Sponsor Shares vest and become unrestricted, additional shares of our Class A common stock would be issued or become eligible for resale, which could result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market.
+Added: The existence of these Warrants, Earnout Shares, and Sponsor Shares, and the potential for their exercise, issuance, vesting, or resale, may create perceived dilution or an overhang in the market, which could adversely affect the market price or trading volume of our Class A common stock, even if such securities are not ultimately exercised, issued, or sold.
Regulatory and licensing requirements may limit the ability of third parties seeking to make investments in us or acquire us.
−Removed: Many states require prior approval of acquisitions of “control,” as defined under each state’s laws and regulations, which may apply to an investment without regard to the intent of the investor.
+Added: Certain state and other regulatory authorities require prior approval of acquisitions of “control,” as defined under applicable laws and regulations, which may apply to an investment regardless of the investor's intent.
In some states, the obligation to obtain approval is imposed on the licensee, and in other states, the prospective investor bears the statutory obligation.
Depending on the form of entity, the threshold trigger may be limited to voting stock.
−Removed: A failure to make the relevant filings and receive the requisite approvals could result in administrative sanctions against the prospective investor or the licensee, including the potential suspension of the license in that state until the requisite approval is obtained.
−Removed: These regulatory requirements may discourage potential acquisition proposals or investments that would result in a change of control of us, may delay or prevent acquisition of shares that would result in a change in control of us, and, as a result, may adversely impact demand for, and the trading price of, our Class A common stock.
+Added: In some jurisdictions, control determinations may be based on relatively low ownership thresholds or other indicia of influence.
+Added: A failure to make required filings or obtain requisite approvals could result in administrative sanctions against the prospective investor or us as the licensee, including fines, conditions on licensure, suspension, or revocation of licenses in applicable jurisdictions.
+Added: These regulatory requirements may discourage, delay, or prevent potential acquisition proposals or investments that would result in a change of control of us, may impose significant time and expense on prospective investors, and could adversely impact the marketability, liquidity, or trading price of our Class A common stock.
+Added: These regulatory approval requirements, together with our dual-class capital structure and controlled company status, may further limit the ability of third parties to acquire control of us.
Additional Risks Related to Ownership of Our Class A Common Stock and Our Operation as a Public Company
The price of our Class A common stock and Public Warrants may be volatile.
−Removed: The price of our Class A common stock, as well as our Public Warrants, may fluctuate due to a variety of factors, including:
+Added: The price of our Class A common stock, and, until their expiration, our Public Warrants, may fluctuate due to a variety of factors, including:
• changes in the industries in which we and our vendors operate;
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• the public’s reaction to our press releases, our other public announcements, and our filings with the SEC;
−Removed: • sales of shares of Class A common stock by our stockholders, including the PIPE Investors (as defined in Note 4— Business Combinations );
−Removed: • the issuance and potential sales of 15,000,000 Earnout Shares and potential sale of 900,000 Sponsor Shares upon the occurrence of an Earnout Triggering Event;
+Added: • the issuance and potential resale of Earnout Shares and Sponsor Shares;
• additions and departures of key personnel;
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• the volume of shares of our Class A common stock available for public sale;
−Removed: • general economic and political conditions, such as the effects of inflation, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability, armed conflict
−Removed: between Israel and Hamas in Gaza and between Israel and Hezbollah in Jordan and the West Bank, armed conflict between Ukraine and Russia, or other acts of war or terrorism.
+Added: • geopolitical instability, including armed conflict involving Israel and regional actors, the ongoing conflict between Ukraine and Russia, or other acts of war or terrorism.
These market and industry factors may materially reduce the market price of our Class A common stock and Public Warrants regardless of our operating performance.
−Removed: In addition, fluctuations in the price of our securities could contribute to the loss of all or part of your investment.
−Removed: If an active market for our securities develops and continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
−Removed: Any of the factors listed above could have a material adverse effect on your investment in our securities, and our securities may trade at prices significantly below the price you paid for them.
−Removed: In such circumstances, the trading price of our securities may not recover and may experience a further decline.
+Added: Our relatively limited analyst coverage and public float may also contribute to volatility in the trading price of our Class A common stock.
+Added: Fluctuations in the trading price of our securities could contribute to the loss of all or part of an investment in our securities.
+Added: Our securities may trade at prices significantly below the price paid by investors, and the market price may not recover or may experience further declines, regardless of our operating performance.
+Added: These market and industry factors may materially and adversely affect the market price or trading volume of our Class A common stock and Public Warrants, regardless of our operating performance.
We do not currently pay dividends on our common stock, and as a result capital appreciation, if any, may be the sole source of gain for our stockholders.
−Removed: We currently do not pay dividends on our common stock.
−Removed: Any future determination to pay dividends will be at the discretion of the Board of Directors and will depend our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects, and such other factors as the Board of Directors deems relevant.
−Removed: To the extent that we continue our current policy of not paying dividends on our common stock, capital appreciation, if any, will be the sole source of potential gain for our stockholders.
−Removed: Consequently, stockholders may only experience a gain from an investment in our common stock if the price of our common stock increases.
−Removed: We are currently, and in the future may be, subject to securities litigation, which is expensive and could divert management attention.
−Removed: The market price of our Class A common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
−Removed: In addition to the Felipe Complaint, we may be the target of this type of litigation in the future.
−Removed: Additional securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
−Removed: The Public Warrants may never be in the money and they may expire worthless, and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then outstanding Public Warrants approve of such amendment.
−Removed: The Public Warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Acies.
−Removed: The Warrant Agreement provides that the terms of the Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
−Removed: Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding Public Warrants approve of such amendment.
−Removed: Although our ability to amend the terms of the Public Warrants with the consent of at least 65% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Public Warrants, shorten the exercise period or decrease the number of shares of Class A common stock purchasable upon exercise of a Public Warrant.
−Removed: We may redeem the Public Warrants prior to their exercise at a time that is disadvantageous to the holders of Public Warrants.
−Removed: We have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Public Warrant if, among other things, the last reported sale price of our Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the holders of the Public Warrants equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations, and the like).
−Removed: If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: As a result, we may redeem the Public Warrants as set forth above even if the holders are otherwise unable to exercise the Public Warrants.
−Removed: Redemption of the outstanding Public Warrants as described above could force the holders of Public Warrants to:
−Removed: (i) exercise the Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so;
−Removed: (ii) sell the Public
−Removed: Warrants at the then-current market price when they might otherwise wish to hold their warrants;
−Removed: or (iii) accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, we expect would be substantially less than the market value of the Public Warrants.
−Removed: None of the Private Warrants will be redeemable by us (subject to limited exceptions) so long as they are held by our Sponsor or its permitted transferees.
−Removed: In addition, we have the ability to redeem the outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per Public Warrant if, among other things, the last reported sale price of our Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the holders of the Public Warrants equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like).
−Removed: In such a case, the holders will be able to exercise their Public Warrants prior to redemption for a number of shares of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock.
−Removed: The value received upon exercise of the Public Warrants (i) may be less than the value the holders would have received if they had exercised their Public Warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for the value of the Public Warrants, including because the number of shares of our Class A common stock received is capped at 0.361 shares of Class A common stock per Public Warrant (subject to adjustment) irrespective of the remaining life of the Public Warrants.
−Removed: Furthermore, the shares of Class A common stock issued upon exercise of the Public Warrants or Private Warrants (or upon the redemption of such Public Warrants for shares of our Class A common stock) will result in dilution to the existing holders of our common stock.
+Added: We currently do not pay dividends on our common stock, and we have no current plans to pay cash dividends in the foreseeable future.
+Added: Any future determination to declare and pay dividends will be at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, contractual restrictions, business prospects, and such other factors that our Board of Directors deems relevant.
+Added: If we continue our current policy of not paying dividends, capital appreciation, if any, would be the sole source of potential gain for our stockholders.
+Added: We have been, and in the future may be, subject to securities litigation, which could be costly and divert management's attention.
+Added: The market price of our Class A common stock has been and may continue to be volatile, and companies that experience stock price volatility are often subject to securities class action litigation.
+Added: Securities litigation, whether meritorious or not, could result in substantial legal expenses, settlement or judgment costs, increased insurance premiums, diversion of management’s time and attention, and reputational harm.
+Added: Any such litigation could materially and adversely affect our business, financial condition, or results of operations.
+Added: Public Warrants may may expire worthless, may be amended with limited holder approval, and may be redeemed by us in a manner that is disadvantageous to holders.
+Added: The Public Warrants are exercisable at an exercise price of $11.50 per share and are scheduled to expire on June 21, 2026.
+Added: If the market price of our Class A common stock does not exceed the applicable exercise price prior to expiration, the Public Warrants will expire worthless.
+Added: Under the terms of the Warrant Agreement, the Public Warrants may be amended with the approval of holders of at least 65% of the then-outstanding Public Warrants, including in a manner that adversely affects individual holders.
+Added: Such amendments could include changes to the exercise price, exercise period, or the number of shares issuable upon exercise.
+Added: In addition, we have the ability to redeem the Public Warrants under certain conditions specified in the Warrant Agreement, including when the market price of our Class A common stock exceeds specified thresholds.
+Added: If we elect to redeem the Public Warrants, holders may be required to exercise their warrants at a time that is disadvantageous, sell their warrants at the then-current market price, or accept the applicable redemption price, which may be substantially less than the market value of the warrants.
+Added: In certain redemption scenarios, the number of shares issuable upon exercise is capped, which may limit the potential upside to holders.
+Added: Any exercise of Public Warrants or Private Warrants, or the issuance of shares upon redemption, would increase the number of shares outstanding and result in dilution to existing stockholders.
+Added: The existence of outstanding warrants may also create perceived dilution or an overhang in the market, which could adversely affect the trading price of our Class A common stock.
Delaware law and our organizational documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
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• the ability of the Board of Directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
−Removed: • the Certificate of Incorporation will prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
+Added: • the Certificate of Incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
• the limitation of the liability of, and the indemnification of, our directors and officers;
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• advance notice procedures with which stockholders must comply to nominate candidates to the Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board of Directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company;
−Removed: These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board of Directors or management.
+Added: • supermajority voting requirements to amend certain provisions of our Certificate of Incorporation and Bylaws;
+Added: • limitations on the ability of stockholders to call special meetings of stockholders;
+Added: • restrictions on stockholder action by written consent following the Voting Threshold Date (as defined in our Certificate of Incorporation).
+Added: These provisions, individually or collectively, could delay, discourage, or prevent a change in control of the Company, even if such a transaction might otherwise benefit our stockholders.
+Added: In addition, we are subject to Section 203 of the DGCL, which, subject to certain exceptions, restricts business combinations between a Delaware corporation and an “interested stockholder” for a period of three years following the date such stockholder becomes an interested stockholder.
+Added: This provision may have the effect of delaying or preventing a change of control transaction.
The provisions of our Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
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Notwithstanding the foregoing, our Certificate of Incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
−Removed: Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
+Added: Although Section 22 of the Securities Act provides for concurrent jurisdiction in state and federal courts for Securities Act claims, our Certificate of Incorporation includes a federal forum provision designating the U.S.
+Added: federal district courts as the exclusive forum for Securities Act claims to the fullest extent permitted by law.
Similarly, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
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These provisions may have the effect of discouraging lawsuits against our directors and officers.
−Removed: The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our Certificate of Incorporation to be inapplicable or unenforceable in such action.
+Added: These provisions may also limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder finds favorable or convenient, may increase the costs associated with pursuing such claims, and may result in less favorable outcomes for stockholders than if such claims were heard in a different forum.
+Added: The enforceability of similar choice of forum provisions in other companies’ organizational documents has been challenged in legal proceedings.
+Added: While the Delaware courts have upheld certain such provisions, it is possible that, in connection with any applicable action brought against us, a court could determine that our forum selection provisions are inapplicable or unenforceable, in whole or in part.
+Added: If a court were to find our forum selection provisions unenforceable, we could incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and results of operations.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.