What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 76 added, 89 removed, 188 unchanged (47% of the section changed)

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Company’s primary assets are equity interests in NewStem and NetCo.

Our President and Executive Chairman, Jan Loeb, is

also the Chairman of NewStem and through this shared management structure along with our 30.58% ownership interest in NewStem, we are

able to exert significant influence over the operations of NewStem.

Additionally, we are a 50% partner in NetCo and through our ownership

interest, are able to exert significant influence over this entity and its operations.

Our President and Executive Chairman, Jan Loeb, is also the

Chairman of NewStem and through this shared management structure along with our 30.51% ownership interest in NewStem, we are able to

exert significant influence over the operations of NewStem.

Additionally, we are a 50% partner in NetCo and through our ownership interest.

conduct no other business and, as a result, we depend entirely upon earnings and cash flow from NewStem and NetCo.

in the future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt

of dividends or other payments from our operating subsidiaries.

If we decide in the

future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends

or other payments from our operating subsidiaries.

investments in NewStem and NetCo are illiquid.

shares in NewStem and our ownership interest in NetCo are illiquid and have extremely limited liquidity rights.

The transferability

of these interests is restricted under federal and state securities laws and the governing documents of each of NewStem and NetCo.

The transferability of

these interests is restricted under federal and state securities laws and the governing documents of each of NewStem and NetCo.

depend on our executive officers and consultants and other key individuals along with the executive officers and key individuals of NewStem

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believe that our continued growth and future success will depend in large part on the skills of our management team and the management

teams of NewStem and NetCo, and our partners’ respective abilities to motivate and retain these individuals and

other key individuals.

Jan Loeb, our President and Executive Chairman, is also the Chairman of NewStem, and therefore has the shared

responsibility of growing the business and operations of NewStem.

The loss of any of their service could reduce our ability to successfully

implement our long-term business strategy which may result in a loss of revenue, and the value of our common stock could be materially

adversely affected.

Leadership changes will occur from time to time and we cannot predict whether significant resignations will occur

or whether NewStem will be able to recruit additional qualified personnel.

We believe these management teams possess valuable knowledge

about our, NewStem’s and NetCo’s respective industries and that their knowledge and relationships would be very difficult

to replicate.

The loss of key personnel, or the inability to recruit and retain qualified and talented personnel in the future, could

have an adverse effect on the respective businesses of NewStem and NetCo, and, consequently, our business, financial condition and/or

operating results.

and NewStem have limited operating histories and have generated no revenue to date.

teams of NewStem and NetCo, and our partners’ respective abilities to motivate and retain these individuals and other key individuals.

Jan Loeb, our President and Executive Chairman, is also the Chairman of NewStem, and therefore has the shared responsibility of growing

the business and operations of NewStem.

The loss of any of their service could reduce our ability to successfully implement our long-term

business strategy which may result in a loss of revenue, and the value of our common stock could be materially adversely affected.

changes will occur from time to time and we cannot predict whether significant resignations will occur or whether NewStem will be able

to recruit additional qualified personnel.

We believe these management teams possess valuable knowledge about our, NewStem’s and

NetCo’s respective industries and that their knowledge and relationships would be very difficult to replicate.

The loss of key

personnel, or the inability to recruit and retain qualified and talented personnel in the future, could have an adverse effect on the

respective businesses of NewStem and NetCo, and, consequently, our business, financial condition and/or operating results.

and NewStem have limited operating histories and have generated minimal revenue to date.

and NewStem have a limited operating history and do not have a meaningful historical record of sales and revenues, nor do we or NewStem

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the introduction and sale of such products.

value of our investment in NetCo and our ability to receive distributions may be affected by disputes between the Company and

Group, our partner in NetCo.

value of our investment in NetCo and our ability to receive distributions may be affected by disputes between the Company and C.P.

our partner in NetCo.

Company and C.P.

Group each own a 50% interest in NetCo.

The joint venture agreement governing NetCo provides for mutual

decision making among the Company and C.P.

Group generally (subject to exceptions) and arbitration in the event any controversy or disagreement

The joint venture agreement governing NetCo provides for mutual decision

making among the Company and C.P.

Group generally (subject to exceptions) and arbitration in the event any controversy or

disagreement arises.

The Company and C.P.

Group are currently in arbitration as to ongoing scope and the operation of NetCo.

If we are unable

to resolve such dispute in a manner favorable to the Company, our investment in NetCo and our ability to continue to receive

distributions from our interest in NetCo could have an adverse effect on our business, financial condition or operating results.

Group were previously in arbitration as to ongoing scope and the operation of NetCo.

arbitration was concluded in July 2023.

The arbitrator ruled against the Company on certain key issues of the arbitration and in the

Company’s favor on two key issues of the arbitration.

However, if we are unable proceed in successful utilization of the joint

venture assets in a manner favorable to the Company, our investment in NetCo and our ability to continue to receive distributions

from our interest in NetCo could have an adverse effect on our business, financial condition or operating results.

business is intensely competitive and “hit” driven.

NetCo may not deliver “hit” products

and services, or consumers may prefer a competitors’ products or services over NetCo.

NetCo may not deliver “hit” products and services, or consumers

may prefer a competitors’ products or services over NetCo.

in the publishing and video game industries is intense.

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total revenue in each segment.

NetCo’s competitors range from established interactive entertainment companies and diversified

media companies to emerging start-ups, and we expect new competitors to continue to emerge throughout the world.

competitors develop and market more successful and engaging products or services, offer competitive products or services at lower price

points, or if NetCo does not develop high-quality, well-received and engaging products and services, NetCo and

our revenue, margins, and profitability will decline.

NetCo’s competitors range from established interactive entertainment companies and diversified media

companies to emerging start-ups, and we expect new competitors to continue to emerge throughout the world.

If NetCo’s competitors

develop and market more successful and engaging products or services, offer competitive products or services at lower price points, or

if NetCo does not develop high-quality, well-received and engaging products and services, NetCo and our revenue, margins, and profitability

will decline.

NetCo fails to develop relationships with new creative talent, its business could be adversely affected.

NetCo’s business, in particular the trade publishing and media portions of the business, is highly dependent on maintaining strong

relationships with the authors, illustrators and other creative talent who produce the products and services that are sold to its customers.

Any overall weakening of these relationships, or the failure to develop successful new relationships, could have an adverse impact on

NetCo and the Company’s business and financial performance.

business, in particular the trade publishing and media portions of the business, is highly dependent on maintaining strong relationships

with the authors, illustrators and other creative talent who produce the products and services that are sold to its customers.

weakening of these relationships, or the failure to develop successful new relationships, could have an adverse impact on NetCo and the

Company’s business and financial performance.

relating to our common stock

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are a holding company whose primary assets are our ownership of equity interests in NewStem and NetCo.

We conduct no other business

and, as a result, we depend entirely upon NewStem’s and NetCo’s earnings and cash flow.

If we decide in the future

to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends

or other payments from NewStem or NetCo.

NewStem and/or NetCo may be restricted in their ability to pay dividends, make distributions

or otherwise transfer funds to us prior to the satisfaction of other obligations, including the payment of operating expenses or debt

service, appropriation to reserves prescribed by laws and regulations, covering losses in previous years, restrictions on the conversion

of local currency into U.S.

dollars or other hard currency, completion of relevant procedures with governmental authorities or banks

and other regulatory restrictions.

We conduct no other business and,

as a result, we depend entirely upon NewStem’s and NetCo’s earnings and cash flow.

If we decide in the future to pay dividends,

as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments

from NewStem or NetCo.

NewStem and/or NetCo may be restricted in their ability to pay dividends, make distributions or otherwise transfer

funds to us prior to the satisfaction of other obligations, including the payment of operating expenses or debt service, appropriation

to reserves prescribed by laws and regulations, covering losses in previous years, restrictions on the conversion of local currency into

dollars or other hard currency, completion of relevant procedures with governmental authorities or banks and other regulatory restrictions.

We do not presently have any intention to declare or pay dividends in the future.

You should not purchase

shares of our common stock in anticipation of receiving dividends in future periods.

You should not purchase shares of our common stock

in anticipation of receiving dividends in future periods.

we do not intend to pay any cash dividends on our common stock, our shareholders will not be able to receive a return on their shares

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provide shareholders may be different than what is available with respect to other public companies.

addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition

period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards.

to elect to use the extended period for compliance and, as a result, our financial statements may not be comparable to companies

that comply with public company effective dates.

addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period

provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards.

We plan to elect

to use the extended period for compliance and, as a result, our financial statements may not be comparable to companies that comply with

public company effective dates.

requirement under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and compliance with the Sarbanes-Oxley

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reporting, are costly and may increase substantially.

rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require

rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which require

that the Company engage legal, accounting, auditing and other professional services.

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confidence and a decline in our share price.

a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act of

2010 and other applicable securities rules and regulations.

Despite recent reforms made possible by the JOBS Act, compliance with these

rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming

or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.”

The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating

are working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial

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accounting and audit functions;

personnel, such as a chief financial officer familiar with the obligations of public company reporting;

consultants to design and implement

internal controls;

and financial printing alone will be a few hundred thousand dollars per year and could be several hundred thousand

dollars per year.

In addition, we may incur additional expenses related to director compensation and/or premiums for directors’

and officers’ liability insurance, the costs of which we cannot estimate at this time.

We may also incur additional expenses associated

with investor relations and similar functions, the cost of which we also cannot estimate at this time.

However, these additional expenses

individually, or in the aggregate, may also be material.

addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’

and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher

costs to obtain the same or similar coverage.

The impact of these events could also make it more difficult for us to attract and retain

qualified persons to serve on our board of directors, our board committees or as executive officers.

increased costs associated with operating as a public company may decrease our net income or increase our net loss and may cause us to

reduce costs in other areas of our business or increase the prices of our products or services to offset the effect of such increased

Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material

adverse effect on our business, financial condition and results of operations.

consultants to design and implement internal controls;

and financial printing alone will be a few hundred thousand dollars per year and

could be several hundred thousand dollars per year.

In addition, we may incur additional expenses related to director compensation and/or

premiums for directors’ and officers’ liability insurance, the costs of which we cannot estimate at this time.

incur additional expenses associated with investor relations and similar functions, the cost of which we also cannot estimate at this

However, these additional expenses individually, or in the aggregate, may also be material.

continued increased costs associated with operating as a public company may decrease our net income or increase our net loss and may

cause us to reduce costs in other areas of our business or increase the prices of our products or services to offset the effect of

such increased costs.

Additionally, if these requirements divert our management’s attention from other business concerns, they

could have a material adverse effect on our business, financial condition and results of operations.

is a very limited trading market for our common stock and investors are not assured of the opportunity to sell their stock, should they

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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 1A. Risk Factors