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Item 7. Management’s Discussion and Analysis

2026-03-16 compared with 2025-03-14 · 95 added, 66 removed, 360 unchanged (31% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition.

The discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto contained in this Annual Report on Form 10-K.

Unless the context otherwise requires, references to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of PLAYSTUDIOS, Inc.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

This section is intended to provide information that management believes is relevant to understanding our consolidated financial condition, results of operations, and cash flows.

Unless the context otherwise requires, references to “we,” “us,” “our,” and the “Company” refer to PLAYSTUDIOS, Inc.

and its consolidated subsidiaries.

This discussion contains forward-looking statements and involves numerous risks and uncertainties.

Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements.

Factors that might cause such a discrepancy include, but are not limited to, those discussed elsewhere in this Annual Report on Form 10-K, particularly in the section titled “Risk Factors” set forth in Part I, Item 1A of this Annual Report on Form 10-K.

All forward-looking statements in this Annual Report on Form 10-K are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.

This discussion contains forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties.

Our actual results may differ materially from those expressed or implied by these forward-looking statements due to a number of factors, including those described in Part I, Item 1A, “Risk Factors,” and elsewhere in this Annual Report on Form 10-K.

All forward-looking statements are based on information available to us as of the date of this report, and except as required by law, we undertake no obligation to update such statements to reflect events or circumstances after the date of this report.

We are a developer and publisher of free-to-play casual games for mobile and social platforms.

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Our games include the award-winning POP!

Slots , myVEGAS Slots , my KONAMI Slots, MGM Slots Live, myVEGAS Blackjack, myVEGAS Bingo, Tetris®, Solitaire, Spider Solitaire, Jumbline 2, Sudoku, and Mahjong.

Slots , myVEGAS Slots , my KONAMI Slots, MGM Slots Live, myVEGAS Blackjack, myVEGAS Bingo, Tetris®, Tetris Block Party, Solitaire, Spider Solitaire, Jumbline 2, Sudoku, and Mahjong.

Our games are based on original content as well as third-party licensed brands and are downloadable and playable for free on multiple social and mobile-based platforms, including the Apple App Store, Google Play Store, Amazon Appstore, and Facebook.

Each of our legacy social casino games and our Tetris®-branded mobile games are powered by our proprietary playAWARDS program and incorporates loyalty points that are earned by players as they engage with our games.

Each of our legacy social casino games and our Tetris®-branded mobile game are powered by our proprietary playAWARDS program and incorporates loyalty points that are earned by players as they engage with our games.

The rewards are provided by our collection of rewards partners, with the majority of rewards partners providing their rewards at no cost to us, in exchange for product integration, marketing support, and participation in our loyalty program.

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Advertisements can be in the form of an impression, click-throughs, banner ads, or offers, where players are rewarded with virtual currency or loyalty points for watching a short video.

While we historically have derived most of our revenue from the sale of in-game virtual currency, we introduced in-game advertising as a limited pilot program and expanded it throughout 2021 and 2022.

In addition, our Tetris®-branded mobile game and our Brainium games generate most of their revenue through in-game advertising.

While we historically have derived a majority of our revenue from the sale of in-game virtual currency, we implemented in-game advertising as an added revenue producer.

Our Tetris®-branded mobile game and our Brainium games generate most of their revenue through in-game advertising.

Smaller Reporting Company ("SRC") Accommodations

As an SRC, we have elected to use scaled disclosure accommodations permitted by the SEC, which means that this section does not include all disclosures required for larger reporting companies.

As a smaller reporting company, we are permitted to provide scaled disclosure accommodations under SEC rules, and accordingly this section does not include all disclosures required of larger reporting companies.

Specifically:

• We have presented only two years of audited financial statements instead of three.

• We are not required to include the contractual obligations table that larger companies must disclose.

• We are not required to provide certain detailed disclosures regarding contractual obligations that may be required of larger reporting companies.

• Our executive compensation disclosures are reduced under Item 402 of Regulation S-K.

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However, the results may not generate revenue and the enhancements may require additional significant modifications or be abandoned in their entirety.

• Real-World Rewards— We currently offer real-world rewards relating to, among other things, dining, live entertainment shows, and hotel rooms, and we plan to continue to expand and diversify our rewards loyalty program in order to

maintain and enhance the perceived value offering to our players.

Our players’ willingness to make in-game purchases is directly impacted by our ability to provide desirable rewards.

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We manage our business by regularly reviewing several key operating metrics to track historical performance, identify trends in player activity, and set strategic goals for the future.

These metrics are operational measures that are not prepared in accordance with U.S.

GAAP and should be considered as supplemental to, and not a substitute for, our GAAP results.

Our key performance metrics are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers’ policies, seasonality, player connectivity, and the addition of new content to games.

We believe these measures are useful to investors for the same reasons.

We believe these measures are useful to investors as they provide additional insight into player engagement and monetization trends.

In addition, we also present certain non-GAAP performance measures.

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The key performance indicators and non-GAAP measures presented in this Annual Report on Form 10-K may differ from similarly titled measures presented by other companies and are not a substitute for financial statements prepared in accordance with U.S.

The calculation of these metrics requires certain judgments and assumptions, and our methodology may differ from that used by other companies, which may limit comparability.

Key Performance Indicators - playGAMES

Daily Active Users (“DAU”)

DAU is defined as the number of individuals who played a game on a particular day.

Average Daily Active Users (“Average DAU”)

Daily Active Users ("DAU") is defined as the number of individuals who played a game on a particular day.

For Tetris and our free-to-play social casino games, we track DAU by the player ID, which is assigned for each game installed by an individual.

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We use DAU and Average DAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a daily basis.

Monthly Active Users (“MAU”)

MAU is defined as the number of individuals who played a game in a particular month.

As with DAU, an individual who plays two different non-Brainium games in the same month is counted as two MAU while an individual who plays the same non-Brainium game on two different devices is counted as one MAU, and an individual who plays two different Brainium games on the same day is counted as two MAU while an individual who plays the same Brainium game on two different devices is also counted as two MAU.

Average Monthly Active Users (“Average MAU”)

Monthly Active Users ("MAU") is defined as the number of individuals who played a game in a particular month.

As with DAU, an individual who plays two different non-Brainium games in the same month is counted as two MAU while an individual who plays the same non-Brainium game on two different devices is counted as one MAU, and an individual who plays two different Brainium games on the same month is counted as two MAU while an individual who plays the same Brainium game on two different devices is also counted as two MAU.

The term "Average MAU" is defined as the average of the MAU, determined as described above, for each calendar month during the period presented.

We use MAU and Average MAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a monthly basis.

Daily Paying Users (“DPU”)

DPU is defined as the number of individuals who made a purchase in a game during a particular day.

Because DAU and MAU are calculated at the game or app-instance level, they reflect engagement at the title level rather than unique individuals across our entire portfolio, and a single individual may be counted multiple times if they engage with multiple games.

In addition, these metrics are derived from a combination of internal tracking systems and third-party platform data, which may be subject to technical limitations, data discrepancies, or changes in platform reporting methodologies.

Average Daily Paying Users (“Average DPU”)

Daily Paying Users ("DPU") is defined as the number of individuals who made a purchase of virtual currency or digital items within a game during a particular day.

As with DAU and MAU, we track DPU based on account activity.

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The term "Average DPU" is defined as the average of the DPU, determined as described above, for each day during the period presented.

We use DPU and Average DPU to help us understand the size of our active player base that makes in-game purchases.

This focus directs our strategic goals in setting player acquisition and pricing strategy.

Daily Payer Conversion

We use DPU and Average DPU to help us understand the size of our active player base that makes in-game purchases and to assess monetization trends within our active player base.

Consistent with DAU and MAU, DPU is calculated at the game level and may reflect multiple purchases by a single individual across different titles.

Average Daily Payer Conversion

Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day.

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Average Daily Revenue Per DAU (“ARPDAU”)

ARPDAU is defined for a given period as the average daily revenue per Average DAU, and is calculated as game and advertising revenue for the period, divided by the number of days in the period, divided by the Average DAU during the period.

ARPDAU is defined for a given period as the average daily revenue per Average DAU, and is calculated as game-related revenue and advertising revenue attributable to the applicable period, divided by the number of days in the period, divided by the Average DAU during the period.

We use ARPDAU as a measure of overall monetization of our active players.

ARPDAU may fluctuate based on changes in pricing, player mix, advertising demand, and promotional activity.

Key Performance Indicators - playAWARDS

The following metrics relate specifically to our playAWARDS loyalty platform and are intended to provide insight into engagement with that program.

Available Rewards

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We use Available Rewards as a measure of the value and potential impact of the program for an interested player.

It is assumed that the greater the variety and breadth of rewards offered, the more likely players will be to ascribe value to the program.

We use Available Rewards as one indicator of the breadth of our loyalty offering.

Purchases is defined as the total number of rewards purchased for the period identified in which a player exchanges loyalty points for a reward.

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Purchases are redeemed by the player directly with the rewards partner within the specified terms and conditions of the reward.

The Company does not receive any compensation or revenue from Purchases.

The Company does not recognize revenue from Purchases, as players redeem loyalty points rather than making cash payments.

We use Purchases as a measure of audience interest and engagement with our playAWARDS platform.

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Retail Value of Purchases only include the retail value of real-world partner rewards and exclude the cost of any PLAYSTUDIOS branded merchandise.

We use Retail Value of Purchases to help us understand the real-world value of the rewards that are purchased by our players.

Retail values are based on partner-provided estimates and may not reflect actual transaction prices or redemption experience.

Retail value also does not represent revenue recognized by the Company.

We use Retail Value of Purchases to help us understand the real-world value of the rewards that are purchased by our players in a particular period.

Retail Value of Daily Rewards Inventory

Retail Value of Daily Rewards Inventory is defined as the cumulative retail value of all rewards listed as available for the period divided by the number days in the period.

For rewards with unlimited inventory, the maximum of number of rewards used in the calculation is 50.

The retail value of each reward listed as available is the retail value as specified by the rewards partner upon creation of the reward.

Retail Value of Daily Rewards Inventory only includes the retail value of real-world partner rewards and excludes the cost of any PLAYSTUDIOS branded merchandise.

We use Retail Value of Daily Rewards Inventory to help us understand the real-world value of the rewards within our playAWARDS platform.

Retail value metrics are presented to illustrate the scale and scope of rewards available through our loyalty program and should not be interpreted as revenue, gross merchandise value, or economic benefit realized by the Company.

Results of Operations

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Net revenue decreased $55.3 million, or 19.1%, to $234.1 million during the year ended December 31, 2025 compared to $289.4 million during the year ended December 31, 2024.

The decrease was primarily due to a $19.1 million decrease in virtual currency revenue primarily driven by decreases in Average DPU.

The decrease was partially offset by growth in advertising revenue.

The decrease was primarily due to a $40.5 million decrease in virtual currency revenue driven by decreases in Average DPU.

Advertising revenue decreased $14.5 million driven by a decrease in Average DAU.

The following table shows net revenues and key performance indicators for our playAWARDS division (in thousands):

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Virtual currency revenue

$ 54 $ — $ 54 nm

$ 986 $ 54 $ 932 1725.9 %

Other revenue

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$ 59,372 $ 114,135 $ (54,763) (48.0) %

Net revenue decreased by $4.1 million, or 98.5%, due to the non-renewal of a licensing arrangement with a customer, offset by increases in virtual currency revenue.

Retail Value of Daily Rewards Inventory

$ 2,552 $ 2,077 $ 475 22.9 %

Net revenue increased by $0.9 million due to the allocation of the transaction price to playAWARDS virtual currency included in playGAMES virtual currency sales.

The key performance indicators presented above are used by management to assess the playAWARDS segment's operating performance, however there is no relationship between the key performance indicators and revenue metrics.

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Cost of revenue decreased by $15.2 million, or 21.0%, during the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was due to a decline in virtual currency revenue partially offset an increase direct to consumer sales, which incur lower processing fees.

The decrease was due to a decline in virtual currency revenue as well as an increase in direct to consumer revenue, which incur lower processing fees.

Selling and Marketing

Selling and marketing expenses decreased by $9.1 million, or 14.2%, during the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was primarily due to decrease in user acquisition expenses of $13.7 million.

This decrease was offset by increases to marketing expenses of $1.3 million, IT software of $0.7 million, outside service costs of $0.6 million, stock compensation of $0.6 million, and other selling and marketing expenses of $0.8 million.

The decrease was primarily due to decreases in user acquisition expenses of $9.8 million and stock compensation of $0.9 million.

This decrease was offset by an increase to brand and other marketing expenses of $1.6 million.

Research and Development

Research and development expenses decreased by $9.3 million, or 13.8%, during the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was primarily due to decreases to stock compensation of $2.2 million, payroll and related costs of $0.9 million, and other research and development costs of $1.3 million.

This decrease was offset by increases to IT software of $0.9 million and outside service costs of $0.9 million.

The decrease was primarily due to decreases in employee costs of $7.6 million, stock compensation of $2.8 million, and outside service expense of $0.8 million.

This decrease was offset by a withholding tax assessment settlement of $1.8 million and and an increase in other research and development expense of $0.1 million.

General and Administrative

General and administrative expenses increased by $1.0 million, or 2.3%, during the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase was primarily due to increases to employee costs of $1.5 million, IT software of $1.4 million, and stock compensation of $1.0 million.

This increase was offset by decreases to insurance of $1.0 million, legal expenses of $0.6 million, outside service costs of $0.5 million, and other general and administrative expenses of $0.8 million.

General and administrative expenses decreased by $0.3 million, or 0.6%, during the year ended December 31, 2025 compared to the year ended December 31, 2024.

Depreciation and Amortization

Depreciation and amortization expenses increased by $0.2 million, or 0.4%, during the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase was primarily due to the acquisition of intangible assets in connection with the business combination of Pixode, as well as increased amortization as a result of license renewals.

This was offset by a decrease of internal-use software amortization in connection with write-downs of certain assets during the year ended December 31, 2024.

Depreciation and amortization expenses decreased by $7.1 million, or 15.6%, during the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was primarily due to a decrease of internal-use software amortization in connection with write-downs of certain assets in the fourth quarter of December 31, 2024 as a result of the 2024 Reorganization Plan.

See Note 10— Intangible Assets and Internal-Use Software, Net .

Restructuring Expenses

Restructuring expenses increased by $17.1 million during the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase was primarily due to increases of non-cash impairment of $7.2 million, management restructurings of $4.0 million, and non-recurring legal expenses of $7.4 million.

This increase was offset by decreases of $0.4 million of various merger and acquisition opportunities and $1.1 million of other restructuring expenses.

Restructuring expenses decreased by $22.2 million during the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was primarily due to decreases of non-cash impairment of $9.2 million, non-

recurring legal expenses of $7.7 million, and management restructurings of $6.0 million.

This decrease was offset by an increase of $0.7 million for various merger and acquisition opportunities.

Other Income, Net

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Change in fair value of warrant liabilities $ 156 $ 856 $ (700) (81.8) %

Change in fair value of contingent consideration (4,968) (85) (4,883) 5744.7 %

Interest income, net 2,943 4,902 (1,959) (40.0) %

Other (expense) income, net (182) 513 (695) (135.5) %

Total other income, net $ 5,576 $ 7,967 $ (2,391) (30.0) %

Other expense, net (910) (97) (813) 838.1 %

Total other (expense) income, net $ (2,779) $ 5,576 $ (8,355) (149.8) %

The change in fair value of warrant liabilities is related to the warrants discussed in Note 12— Accrued and Other Current Liabilities to our consolidated financial statements herein.

The change in fair value of contingent consideration is related to the Pixode Acquisition discussed in Note 4— Business Combinations .

Interest income, net is related to interest earned on cash and cash equivalents offset by fees and expenses associated with the Credit Agreement as discussed in Note 14— Long-Term Debt to our consolidated financial statements herein.

Other income, net primarily relates to gains or (losses) from equity investments and gains or (losses) from foreign currency transactions with our foreign subsidiaries.

Other expense, net primarily relates to gains or (losses) from equity investments and gains or (losses) from foreign currency transactions with our foreign subsidiaries.

Provision for Income Taxes

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The income tax expense for the year ended December 31, 2025 reflected an effective income tax rate of negative 7.3%, which was less than the statutory tax rate of 21% primarily due to the recording of a valuation allowance on deferred tax assets, impacts from short falls associated with stock-based compensation, impacts from foreign branch income, and other nondeductible expenses.

The income tax benefit reflected an effective income tax rate of negative 669.7% for the year ended December 31, 2023, which was less than the statutory federal rate of 21.0% primarily due to the recording of a valuation allowance on deferred tax assets, the effect of additional foreign taxes paid related to a settlement with the Israel Tax Authority, impacts from foreign branch income, and other nondeductible expenses.

The decrease in our effective tax rate was partially offset by benefits from the exercise of non-qualified stock options, changes to the fair value adjustment of the warrant liability, and the deduction of foreign taxes paid.

The income tax expense for the year ended December 31, 2024 reflected an effective income tax rate of negative 5.1%, which was greater than the statutory federal rate of 21.0% primarily due to the recording of a valuation allowance on deferred tax assets, impacts from short falls associated with stock-based compensation, impacts from foreign branch income, and other nondeductible expenses.

Comparison of our Segment Results of Operations

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playGAMES AEBITDA margin was 25.1% for the year ended December 31, 2025 compared to 29.4% for year ended December 31, 2024.

The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue primarily driven by decreases in DPU.

playGAMES AEBITDA margin was 29.4% for the year ended December 31, 2024 compared to 28.9% for year ended December 31, 2023, primarily as a result of lower user acquisition costs.

The decrease to playGAMES AEBITDA was a result of decreased virtual currency revenue primarily driven by a decrease in DPU and advertising revenue primarily driven by a decrease in DAU.

playAWARDS AEBITDA was $(8.7) million for the year ended December 31, 2025 compared to $(13.7) million for year ended December 31, 2024.

The decrease in AEBITDA can be attributed to the non-renewal of a licensing arrangement with a customer.

The increase in AEBITDA can be attributed to a reduction in employee costs in connection with the 2024 Reorganization Plan and an increase in revenue.

Non-GAAP Measures

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Restructuring and related (1)

Special infrequent (2)

(2,025) (4,655)

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15.1 % 19.5 %

(1) Amounts reported include mergers and acquisition related expenses, management restructuring and severance, asset impairments and write-downs, extraordinary expenses related to the war in Israel, and other various nonrecurring expenses.

(1) Amounts reported include internal reorganization costs, including severance-related costs, fees related to evaluating various merger and acquisition opportunities, and non-recurring legal costs.

(2) Amount reported consists of a charitable contribution and a withholding tax assessment settlement.

(3) Amounts reported in “Other, net” include interest expense, interest income, gains/losses from investments, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.

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Accordingly, we may need to engage in equity or debt financings to secure additional funds or we may decide to do so opportunistically.

On June 24, 2021, in connection with the closing of the Acies Merger, the Company terminated and replaced the Revolver (as defined below).

The Company, a subsidiary of the Company, JPMorgan Chase Bank, N.A., as administrative agent and JPMorgan Chase Bank, N.A., Silicon Valley Bank and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers entered into a credit agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility in an aggregate principal amount of $75.0 million.

On June 24, 2021, the Company, a subsidiary of the Company, JPMorgan Chase Bank, N.A., as administrative agent and JPMorgan Chase Bank, N.A., Silicon Valley Bank and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers entered into a credit agreement (the “Credit Agreement”) which provides for a five-year revolving credit facility in an aggregate principal amount of $75.0 million.

Borrowings under the Credit Agreement may be borrowed, repaid and re-borrowed by the Company, and are available for working capital, general corporate purposes, and permitted acquisitions.

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During the year ended December 31, 2025, investing activities used $16.9 million of net cash as compared to $26.3 million during the year ended December 31, 2024.

The change in cash used in investing activities was primarily due to $7.5 million less cash used to purchase intangible assets and internal-use software and $2.3 million less purchases of property and equipment.

The decrease was offset by $3.4 million of cash paid for the Pixode acquisition and $0.4 million of other cash payments for investing activities.

The change in cash used in investing activities was primarily due to $3.4 million less cash used for assets acquired from business combinations, $3.0 million less cash used to purchase intangible assets and internal-use software, and $3.0 million less cash used to purchase property and equipment.

Financing Activities

During the year ended December 31, 2025, financing activities used $14.9 million of net cash, while financing activities used $41.9 million of net cash during the year ended December 31, 2024.

The change in cash used in financing activities was due to an additional $15.7 million of share repurchases, $3.5 million in increased minimum guarantee payments made, and $2.8 million of less proceeds received from stock option exercises.

The change in cash used in financing activities was due to $27.7 million less cash used for share repurchases and $0.5 million less in payments made for tax withholding on stock-based compensation.

This was offset by an increase in minimum guarantees paid of $1.2 million.

Critical Accounting Policies and Estimates

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useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recognized as goodwill.

As of December 31, 2025, our goodwill totaled $52.2 million.

We assess the impairment of goodwill of our reporting unit annually, or more often if events or changes in circumstances indicate that the carrying value may not be recoverable.

Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.

If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value.

The fair value of the reporting unit is estimated using market and discounted cash flow approaches.

Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value.

The discounted cash flow approach requires the use of significant estimates of expected revenues as well as discount rates to determine the estimated fair value.

The market approach uses comparable company information to determine revenue and earnings multiples to value our reporting unit.

Failure to achieve these expected results or market multiples may cause a future impairment of goodwill at the reporting unit.

We conducted our annual impairment test of goodwill as of October 1, 2025 and 2024.

As of December 31, 2025, we determined that no impairment of the carrying value of goodwill was required.

See Note 11— Goodwill to the consolidated financial statements included in this report.

Business Combinations

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The loyalty points can be redeemed for rewards offered by the Company’s rewards partners.

There is no obligation for the Company to pay or otherwise compensate the Company’s rewards partners for any player redemptions under the Company’s rewards partner agreements.

There is no obligation for the Company to pay or otherwise compensate the Company’s rewards partners for any player redemptions under the Company’s rewards partner

In addition, both paying and non-paying players can earn loyalty points.

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Loyalty points or other virtual currencies may be included in certain bundled purchases through certain platforms.

Loyalty points or other virtual currencies are not available to be purchased separately and there is no stand alone selling price.

Loyalty points or other virtual currencies are not available to be purchased separately and there is no standalone selling price.

If loyalty points or other forms of virtual currencies are included in bundled purchases, the Company will allocate a portion of the transaction price to each of the virtual currencies using the residual approach.

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The Company has the performance obligation to display and provide access to the virtual currency purchased by the Company’s player within the game whenever the player accesses the game until the virtual currency is consumed.

required at the time of purchase and the transaction price is fixed.

Payment is required at the time of purchase and the transaction price is fixed.

The transaction price, which is the amount paid for the virtual currency by the player, is allocated entirely to this single performance obligation.

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Under ASC 740, the Company determines deferred tax assets and liabilities based on the temporary difference between the consolidated financial statements and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which it expects the differences to be recovered or settled.

establishes valuation allowances when necessary, based on the weight of the available positive and negative evidence, to reduce deferred tax assets to the amount that is more likely than not to be realized.

The Company establishes valuation allowances when necessary, based on the weight of the available positive and negative evidence, to reduce deferred tax assets to the amount that is more likely than not to be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740, which requires companies to adjust their consolidated financial statements to reflect only those tax positions that are more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the issue.

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We have elected to account for the impact of the global intangible low-taxed income (GILTI) inclusion and base erosion anti-avoidance tax (BEAT) based on the period cost method

See Note 16 Income Taxes to the consolidated financial statements for further information regarding income taxes.

Recent Accounting Pronouncements

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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.

What changed 10-K

Item 7. Management’s Discussion and Analysis