−Removed: Set forth below, elsewhere in this Annual Report on Form 10-K and in other documents we file with the SEC are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this Annual Report on Form 10-K.
−Removed: We note that factors set forth below, individually or in the aggregate, as well as additional risks and uncertainties either not presently known or that are currently believed to not be material to the business, may cause our actual results to differ materially from expected and historical results.
−Removed: You should understand that it is not possible to predict or identify all such factors.
−Removed: Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties and the risks described below should be carefully considered together with the other information set forth in this report and in future documents we file with the SEC.
−Removed: Risks Relating to Our Business and the Live Events and Ticketing Industries
−Removed: Our success depends on the supply and demand of concert, sporting and theater events and if either declines, it could have a material adverse effect on our business, financial condition and results of operations.
−Removed: A reduction in the number of live concert, sporting and theater events will have an adverse effect on our revenue and operating income.
−Removed: Many of the factors affecting the number and availability of live concert, sporting and theater events are beyond our control.
−Removed: For instance, certain sports leagues have experienced labor disputes leading to threatened or actual player lockouts.
−Removed: Any such lockouts that result in shortened or cancelled seasons will adversely impact our business due to fewer events and increased event cancellations as well as the possibility of decreased attendance following such a lockout due to adverse fan reaction.
−Removed: A decline in attendance at live concert, sporting and theater events may also have an adverse effect on our revenue and operating income.
+Added: Set forth below are certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this Report.
+Added: The risks discussed below are not the only risks we face.
+Added: Additional risks not presently known or that are currently believed to not be material may also cause actual results to differ materially from expected and historical results.
+Added: The risks discussed below should be carefully considered together with the other information set forth in this Report and in our other filings with the SEC.
+Added: Risks Related to Our Business and the Live Events and Ticketing Industries
+Added: Our success depends on the supply and demand of live concert, sporting and theater events, and a decline in either will adversely affect our business, financial condition and results of operations.
+Added: The number of live concert, sporting and theater events depends on a number of factors, many of which are outside of our control.
+Added: A reduction in the number or availability of such events will adversely affect our revenue and operating results.
+Added: For example, certain sports leagues have experienced labor disputes leading to threatened or actual player lockouts.
+Added: Any such lockouts that result in shortened or cancelled seasons will adversely impact our business due to fewer events and increased event cancellations, as well as the possibility of decreased attendance due to adverse fan reactions.
+Added: A decline in attendance at live concert, sporting and theater events may also adversely affect our revenue and operating results.
Our business depends on discretionary consumer and corporate spending.
−Removed: Many factors related to corporate spending and discretionary consumer spending, including economic conditions affecting disposable consumer income such as unemployment levels, fuel prices, interest rates, changes in tax rates and tax laws that impact companies or individuals, and rising inflation can significantly impact our operating results.
−Removed: Business conditions, as well as various industry conditions, can also significantly impact our operating results as these factors can affect premium seat sales.
−Removed: Negative factors such as challenging economic conditions and public concerns over terrorism and security incidents, particularly when combined, can also impact corporate and consumer spending.
−Removed: During periods of economic slowdown and recession, many consumers have historically reduced their discretionary spending.
−Removed: The risks associated with our business will become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at live concert, sporting and theater events.
−Removed: The impact of economic slowdowns could result in reductions in ticket sales and could have an adverse effect on our ability to generate revenue.
−Removed: We have limited operating history during economic slowdowns as our marketplace developed subsequent to the last significant financial crisis (starting in 2008 and 2009).
−Removed: The impact of the COVID-19 pandemic starting in 2020 and related economic slowdown impacted our business through event cancellations and restrictions but may not be representative of an economic slowdown or recession not induced by a pandemic.
−Removed: Despite slowing economic activity in 2022, demand for live events remained strong.
−Removed: However, there can be no assurance that consumer and corporate spending will not subsequently be adversely impacted by any future deterioration in economic conditions, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Our business is dependent on the continued occurrence of large-scale sporting events, concerts and theater shows and any decrease in the number of such events will result in decreased demand for our services.
−Removed: Ticket sales are sensitive to fluctuations in the number of entertainment, sporting and theater events and activities offered by promoters, teams and facilities, and adverse trends in the entertainment, sporting and leisure event
−Removed: industries could adversely affect our business, financial condition and results of operations.
−Removed: We rely on artists, entertainers and teams to create and perform at live music, sporting and theater events, and any unwillingness to tour, lack of availability of popular artists or decrease in the number of games or performances held could limit our ability to generate revenue.
−Removed: Accordingly, our success depends upon the ability of these promoters, teams and facilities to correctly anticipate public demand for particular events, as well as the availability of popular artists, entertainers and teams, and any decrease in availability or failure to anticipate public demand could result in reduced demand for our services, which would adversely affect our business, financial condition and results of operations.
−Removed: Our business depends on relationships with ticket buyers, sellers and distribution partners, and any adverse changes in these relationships will adversely affect our business, financial condition and results of operations.
−Removed: Our business is dependent on maintaining our deep and longstanding relationships with the parties that use our platform to buy and sell tickets, including ticket buyers, sellers, and distribution partners.
−Removed: We cannot provide assurance that we will be able to maintain existing relationships, or enter into new relationships, on acceptable terms, if at all, and the failure to do so could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Changes in internet search engine algorithms and dynamics, or search engine disintermediation, or changes in marketplace rules could have a negative impact on traffic for our sites and ultimately, our business and results of operations.
−Removed: We rely heavily on internet search engines, such as Google, to generate traffic to our website, through a combination of organic and paid searches.
−Removed: Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to our website can be negatively affected.
−Removed: In addition, a search engine could, for competitive or other purposes, alter its search algorithms or results causing our website to be placed lower in organic search query results.
−Removed: If a major search engine changes its algorithms in a manner that negatively affects the search engine ranking of our website or those of our partners, our business, results of operations and financial condition would be harmed.
−Removed: Furthermore, our failure to successfully manage our search engine optimization could result in a substantial decrease in traffic to our website, as well as increased costs if we were to replace free traffic with paid traffic, which may harm our business, results of operations and financial condition.
−Removed: We also rely on application marketplaces, such as Apple’s App Store and Google’s Play, to enable downloads of our applications.
−Removed: Such marketplaces have in the past made, and may in the future make, changes that make access to our products more difficult or limit the features we are able to offer.
+Added: Many factors related to such spending, including economic conditions such as unemployment levels, fuel prices, interest rates, inflationary concerns and changes in tax rates and tax laws, as well as public concerns over terrorism and safety incidents, can impact our operating results.
+Added: Business conditions, as well as various industry conditions, can also impact our operating results, including by affecting premium seat sales.
+Added: Because consumers have historically reduced discretionary spending during periods of economic slowdown, recession and uncertainty, the risks associated with our business may become more acute during such periods.
+Added: The impact of economic slowdowns, recessions and uncertainty could result in reduced ticket sales and adversely affect our ability to generate revenue.
+Added: We have a limited operating history during economic slowdowns as our marketplace developed subsequent to the last significant financial crisis, which began in 2008.
+Added: The COVID-19 pandemic, which began in 2020, and related economic slowdown impacted our business through event cancellations and restrictions, but may not be representative of an economic slowdown or recession not induced by a pandemic.
+Added: While demand for live events was strong throughout 2022 and 2023, there can be no assurance that discretionary
+Added: consumer and corporate spending will not be adversely impacted by any future deterioration in economic conditions, which could adversely affect our business, financial condition and results of operations.
+Added: Our business depends on the continued occurrence of large-scale live concert, sporting and theater events, and a decrease in the number of such events could result in decreased demand for our services.
+Added: Ticket sales are sensitive to fluctuations in the number of concert, sporting and theater events and activities offered by promoters, teams and facilities, and adverse trends in the entertainment, sporting and leisure event industries could adversely affect our business, financial condition and results of operations.
+Added: We rely on artists, entertainers and teams to create and perform at live concert, sporting and theater events, and any unwillingness to tour, lack of availability of popular artists, entertainers and teams, or decrease in the number of games or performances held could limit our ability to generate revenue.
+Added: Accordingly, our success depends upon the ability of promoters, teams and facilities to correctly anticipate public demand for particular events, as well as the availability of popular artists, entertainers and teams, and any decrease in availability or failure to anticipate public demand could result in reduced demand for our services, which would adversely affect our business, financial condition and results of operations.
+Added: Our business depends on our relationships with ticket buyers, sellers and partners, and an adverse change in these relationships could adversely affect our business, financial condition and results of operations.
+Added: Our business depends on maintaining our deep and longstanding relationships with the parties that use our platform to buy and sell tickets, including ticket buyers, sellers and partners.
+Added: There can be no assurance that we will be able to maintain existing or develop new relationships on acceptable terms, if at all, and the failure to do so could adversely affect our business, financial condition and results of operations.
+Added: Changes in internet search engine algorithms and dynamics, search engine disintermediation or mobile application marketplace rules could have a negative impact on traffic for our websites and mobile applications and, ultimately, our business, financial condition and results of operations.
+Added: We rely heavily on internet search engines, such as Google, to generate traffic to our websites, through a combination of organic and paid searches.
+Added: Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to our websites can be negatively affected.
+Added: In addition, a search engine could, for competitive or other purposes, alter its search algorithms or results causing our websites to be placed lower in organic search query results.
+Added: If a major search engine changes its algorithms in a manner that negatively affects its ranking of our or our partners’ websites, our business, financial condition and results of operations would be adversely affected.
+Added: Furthermore, our failure to successfully manage our search engine optimization could result in a substantial decrease in traffic to our websites, as well as increased costs if we were to replace free traffic with paid traffic, which may adversely affect our business, financial condition and results of operations.
+Added: We also rely on application marketplaces, such as Apple’s App Store and Google’s Play, to enable downloads of our mobile applications.
+Added: Such marketplaces have in the past made, and may in the future make, changes (including to applicable security and privacy policies and requirements) that make access to our applications more difficult or limit the features we are able to offer.
For example, our applications may receive unfavorable treatment compared to the promotion and placement of competing applications, such as the order in which they appear within marketplaces.
−Removed: Further, iOS and Android apps are an important distribution channel for sales of our tickets.
−Removed: If Apple or Google choose to charge commissions or fees on our revenue from App-based purchases, and we fail to negotiate favorable terms, it may harm our business, results of operations and financial condition.
−Removed: Similarly, if problems arise in our relationships with providers of application marketplaces, our user growth could be harmed.
−Removed: We face intense competition in the ticketing industry, and we may not be able to maintain or increase our ticket listings and sales, which could adversely affect our business, financial condition and results of operations.
−Removed: Our business faces significant competition from other national, regional and local primary and secondary ticketing service providers to secure new and retain existing ticket buyers, sellers, and distribution partners on a continuous basis.
+Added: Further, our Apple iOS and Google Android applications are an important distribution channel for ticket sales.
+Added: If either marketplace were to charge commissions or fees on our revenue from application-based purchases, and we failed to negotiate favorable terms, it could adversely affect our business, financial condition and results of operations.
+Added: Similarly, if problems arise in our relationships with these or other providers of application marketplaces, our user growth could be harmed.
+Added: We face intense competition in the ticketing industry, and we may be unable to maintain or increase our ticket listings and sales, which could adversely affect our business, financial condition and results of operations.
+Added: Our business faces significant competition from other national, regional and local primary and secondary ticketing service providers to secure new and retain existing ticket buyers, sellers and partners on a continuous basis.
We also face competition in the resale of tickets from other professional ticket resellers.
The intense competition that we face in the ticketing industry could cause the volume of our ticketing business to decline, which could adversely affect our business, financial condition and results of operations.
−Removed: Other competitive variables that could lead to a decrease in orders, ticket prices, fees and/or profit margins that could adversely affect our financial performance include:
−Removed: competitors’
−Removed: offerings that may include more favorable terms or pricing;
+Added: Other competitive variables that could lead to a decrease in ticket orders, ticket prices, fees and/or profit margins that could adversely affect our financial performance include:
+Added: competitors’ offerings that may include more favorable terms or pricing;
competitors’ increase in marketing spending;
−Removed: technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive alternatives;
+Added: technological changes and innovations that we are unable to adopt or are late in adopting;
other entertainment options or ticket inventory selection and variety that we do not offer;
1 unchanged sentence
primary ticket marketplaces trying to restrict ticket sales by secondary marketplaces;
−Removed: increased search engine marketing costs as competitors increase bid prices.
−Removed: In addition, competition within the gaming and fantasy sports industry is significant, and our existing and potential users may elect to use competing daily fantasy sports products.
−Removed: If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements, our business will suffer.
−Removed: Our ability to attract and retain ticket buyers, sellers, and distribution partners depends in large part on our ability to provide a user-friendly and effective platform, develop and improve our platform and introduce compelling new solutions and enhancements.
−Removed: Our industry is characterized by rapidly changing technology, service and product introductions and changing demands of ticket buyers, sellers, and distribution partners.
−Removed: We spend substantial time and resources understanding such parties’
−Removed: needs and responding to them.
+Added: and increased search engine marketing costs as competitors increase bid prices.
+Added: In addition, competition within the fantasy sports and gaming industry is significant, and our existing and potential Vivid Picks users may elect to use competing daily fantasy sports products.
+Added: If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements or improve existing ones, our business, financial condition and results of operations could be adversely affected.
+Added: Our ability to attract and retain ticket buyers, sellers and partners depends in large part on our ability to provide a user-friendly and effective platform, develop and improve our platform and introduce compelling new solutions and enhancements.
+Added: Our industry is characterized by rapidly changing technology, service and product introductions and changing demands of ticket buyers, sellers and partners.
+Added: We spend substantial time and resources understanding and responding to such parties’ needs.
Building new solutions is costly and complex, and the timetable for commercial release is difficult to predict and may vary from our historical experience.
−Removed: In addition, after development, ticket buyers, sellers, and distribution partners may not be satisfied with our enhancements or perceive that the enhancements do not adequately meet their needs.
+Added: In addition, after development, ticket buyers, sellers and partners may not be satisfied with our enhancements or perceive that our enhancements do not adequately meet their needs.
The success of a new solution or enhancement to our platform can depend on several factors, including timely completion and delivery, competitive pricing, adequate quality testing, integration with our platform, user awareness and overall market acceptance and adoption.
−Removed: If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements or improve existing ones, our business, results of operations and financial condition could be harmed.
−Removed: The reputation and brand of our marketplace is important to our success, and if we are not able to maintain and enhance our brand, our business, financial condition and results of operation may be adversely affected.
−Removed: Maintaining and enhancing our reputation and brand as a differentiated ticketing marketplace serving ticket buyers, sellers and distribution partners is critical in retaining our relationships with our existing ticket buyers, sellers and distribution partners and to our ability to attract new ticketing buyers, sellers and distribution partners.
−Removed: The successful promotion of our brand attributes will depend on a number of factors that we control and some factors outside of our control.
−Removed: The promotion of our brand requires us to make substantial expenditures and management investment, which will increase as our market becomes more competitive and as we seek to expand our marketplace.
−Removed: To the extent these activities yield increased revenue, this revenue may not offset the increased expenses we incur.
−Removed: If we do not successfully maintain and enhance our brand and successfully differentiate our marketplace from competitive products and services, our business may not grow, we may not be able to compete effectively and we could lose ticket buyers, sellers or distribution partners or fail to attract potential new ticket buyers, sellers and distribution partners, all of which would adversely affect our business, results of operations and financial condition.
−Removed: There are also factors outside of our control, which could undermine our reputation and harm our brand.
−Removed: Negative perception of our marketplace may harm our business, including as a result of complaints or negative publicity about us;
−Removed: the promotion on our platform of events that are deemed to be COVID-19 “superspreader”
−Removed: events by the media;
−Removed: our inability to timely comply with local laws, regulations and/or consumer protection related guidance;
−Removed: the use of our platform to sell fraudulent tickets;
−Removed: responsiveness to issues or complaints and timing of refunds and/or reversal
−Removed: of payments through our platform;
−Removed: actual or perceived disruptions or defects in our platform;
−Removed: security incidents;
−Removed: or lack of awareness of our policies or changes to our policies that sellers, buyers or others perceive as overly restrictive, unclear or inconsistent with our values.
−Removed: If we are unable to maintain a reputable platform that provides valuable solutions and desirable events, then our ability to attract and retain sellers, buyers and distribution partners could be impaired and our reputation, brand and business could be harmed.
−Removed: We may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks, disease epidemics or pandemics, severe weather events and natural disasters.
−Removed: The occurrence and threat of extraordinary events, such as terrorist attacks, intentional or unintentional mass-casualty incidents, public health concerns such as contagious disease epidemics or pandemics, public safety incidents such as Astroworld, and natural disasters or similar severe weather events, may deter artists from touring and teams from holding games and/or substantially decrease the use of and demand for our services, which may decrease our revenue or expose us to substantial liability.
−Removed: Terrorism and security incidents, military actions and wars, periodic elevated terrorism alerts and fears related to contagious disease epidemics and pandemics have, among other things, resulted in public concerns regarding air travel and regional or nationwide disruptions of commercial and leisure activities.
−Removed: The occurrence of any such events may deter buyers from attending and purchasing tickets to live concerts, sporting or theater events, which will negatively impact our business and financial performance.
−Removed: Moreover, performers, venues, teams or promoters may as a result decide to cancel concert, sporting and theater events, including due to security concerns or security-related disruptions, social distancing requirements, such as those imposed in response to the COVID-19 pandemic, or severe weather events or natural disasters.
−Removed: Attendance at events may decline or events may be cancelled due to these extraordinary events, which could adversely impact our operating results.
−Removed: Cancellations of such events could adversely affect our financial performance, as we are obligated to issue refunds or credits for tickets purchased for those events that are not rescheduled.
−Removed: We may enter into agreements to acquire certain businesses and take actions in connection with such acquisitions that could affect our business and results of operations;
−Removed: if we are unsuccessful in our future acquisitions, our business could be adversely impacted.
−Removed: Our strategy involves, and our future growth rate may depend in part on, our selective acquisition of additional businesses.
−Removed: For example, we acquired Fanxchange Limited in 2019 and Betcha Sports, Inc.
−Removed: (“Betcha”) in 2021.
−Removed: However, we may be unable to identify other suitable targets for acquisition or make acquisitions at favorable prices.
−Removed: Even if we identify a suitable acquisition candidate, our ability to successfully complete the acquisition depends on a variety of factors and may include our ability to obtain financing on acceptable terms and requisite government approvals.
−Removed: In addition, our credit facility restricts our ability to make certain acquisitions.
+Added: If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements or improve existing ones, our business, financial condition and results of operations could be adversely affected.
+Added: Our reputation and brand are important to our success, and if we are unable to maintain and enhance them, our business, financial condition and results of operations could be adversely affected.
+Added: Maintaining and enhancing our reputation and brand as a differentiated ticketing marketplace serving ticket buyers, sellers and partners is critical in our ability to retain existing, and attract new, relationships with ticket buyers, sellers and partners.
+Added: The successful promotion of our brand attributes depends on a number of factors, including many that are outside of our control.
+Added: The promotion of our brand requires us to make substantial expenditures and management investment, which may increase as our marketplace continues to expand and become more competitive.
+Added: To the extent these activities yield increased revenue, it may not offset the increased expenses we incur.
+Added: If we do not successfully maintain and enhance our brand and differentiate our marketplace from competitive products and services, our business may not grow, we may be unable to compete effectively and we could lose existing, or fail to attract new, ticket buyers, sellers or partners, all of which would adversely affect our business, financial condition and results of operations.
+Added: There are also factors outside of our control that could undermine and/or harm our reputation and brand.
+Added: A negative perception of our marketplace may adversely affect our business, including as a result of complaints or negative publicity, our inability to timely comply with applicable laws, regulations and/or consumer protection-related guidance, the use of our platform to sell fraudulent or counterfeit tickets, our responsiveness to issues or complaints,
+Added: the timing of refunds and/or reversal of payments through our platform, actual or perceived disruptions or defects in our platform, cybersecurity incidents, a lack of awareness of our policies or changes to our policies that third parties perceive as overly restrictive, unclear or inconsistent with our values.
+Added: If we are unable to maintain a reputable platform that provides valuable solutions and desirable events, our ability to attract and retain ticket buyers, sellers and partners could be impaired and our reputation, brand and business could be adversely affected.
+Added: Disease epidemics and pandemics have adversely affected, and may in the future adversely affect, our business, financial condition and results of operations.
+Added: Disease epidemics and pandemics (and governmental responses thereto) have had, and may in the future have, a material negative impact on macroeconomic conditions, the supply of live events and consumer behavior, all of which can adversely affect our business, financial condition and results of operations.
+Added: The duration and scope of an epidemic or pandemic can be difficult to predict and depend on many factors, including the emergence of new variants and the availability, acceptance and effectiveness of preventative measures.
+Added: An epidemic or pandemic may also precipitate or aggravate other risk factors, which have adversely affected, and may continue to adversely affect, our business.
+Added: Such additional or attendant risks include, among others:
+Added: the impact of any economic downturn, recession or uncertainty, including reduced discretionary consumer and corporate spending and/or confidence of ticket buyers and sellers, that results in a decline in ticket sales and live event attendance;
+Added: a decrease in our profitability due to governmental restrictions or safety precautions and protocols voluntarily undertaken, such as venues running under capacity or ceasing operations, which could reduce the supply of live events and limit the number of tickets sold on our marketplace;
+Added: an increase in event cancellations;
+Added: an inability to pursue expansion opportunities or acquisitions due to capital constraints;
+Added: a decrease in the availability, or increase in the cost, of insurance coverage;
+Added: and the incurrence of additional expenses related to compliance, precautions and management.
+Added: For example, the global COVID-19 pandemic has been complex, unpredictable and evolving.
+Added: It resulted in significant disruption and additional risks to our business, the entertainment industry and the global economy in 2020 and 2021.
+Added: The pandemic led governments and other authorities around the world to impose measures intended to control its spread, including travel bans, border closings and restrictions, business closures, quarantines and vaccine requirements.
+Added: Many promoters, teams, theaters and facilities around the world shut down in 2020.
+Added: Because our business depends on live events in order to generate revenue from ticket sales, fewer live events and lower event attendance during the pandemic negatively impacted our financial condition.
+Added: While live events are now generally held at pre-pandemic scope and scale, it is difficult to predict the continued impacts of the pandemic, the emergence of new COVID-19 variants and whether restrictions could again be put into place in the future.
+Added: Any of these circumstances could again threaten the live events industry and negatively impact our financial condition.
+Added: If any of the business acquisitions we have made, or may make in the future, are unsuccessful, our business, financial condition and results of operations could be adversely impacted.
+Added: Our strategy has involved, and our future growth rate may continue to depend in part on, our selective acquisition of additional businesses.
+Added: For example, we acquired Fanxchange Ltd.
+Added: (“Fanxchange”) in 2019, Betcha (which we rebranded as Vivid Picks) in 2021, Wavedash in September 2023 and Vegas.com in November 2023.
+Added: However, we may be unable in the future to identify other suitable acquisition targets or make acquisitions at favorable prices.
+Added: Even if we identify a suitable acquisition candidate, our ability to successfully complete the acquisition depends on a variety of factors, which may include our ability to obtain financing on acceptable terms and requisite government approvals.
+Added: And, even if we complete an acquisition, our ability to successfully integrate the acquired business is subject to additional risks and uncertainties.
+Added: Further, our credit facility restricts our ability to make certain acquisitions.
In connection with future acquisitions, we could take certain actions that could adversely affect our business, including:
using a significant portion of our available cash;
−Removed: issuing equity securities, which would dilute current stockholders’
−Removed: percentage ownership;
+Added: issuing equity securities, which would dilute current stockholders’ ownership;
incurring substantial debt;
incurring or assuming contingent liabilities, known or unknown;
−Removed: incurring large accounting write-offs, impairments or amortization expenses.
−Removed: In addition, acquisitions involve inherent risks which, if realized, could adversely affect our business and results of operations, including those associated with:
−Removed: integrating the operations, financial reporting, technologies and personnel of acquired companies;
+Added: and incurring large accounting write-offs, impairments or amortization expenses.
+Added: In addition, an acquisition involves inherent risks that, if realized, could adversely affect our business, financial condition and results of operations, including those associated with:
+Added: integrating the operations, financial reporting, technologies and personnel of the acquired company;
scaling of operations, system and infrastructure and achieving synergies to meet the needs of the combined or acquired company;
managing geographically dispersed operations;
−Removed: the diversion of management’s attention from other business concerns;
−Removed: the inherent risks in entering markets or lines of business in which we have either limited or no direct experience;
−Removed: the potential loss of key employees, customers and strategic partners of acquired companies;
−Removed: the impact of laws and regulations at the state, federal and international levels when entering new markets or business, which could significantly affect our ability to complete acquisitions and expand our business.
−Removed: For example, we acquired Betcha, a real money daily fantasy sports app with social and gamification features that enhance fans’
−Removed: connection with their favorite live sports in December 2021.
−Removed: This acquisition involves inherent risks, including those associated with integrating a new line of business and adhering to a new regulatory regime.
−Removed: The success of this acquisition is based, in part, on our ability to overcome these risks.
−Removed: Our financial performance in certain quarters and years may not be indicative of, or comparable to, our financial performance in subsequent financial quarters or years due to seasonality and other operational factors.
−Removed: Our financial results and cash needs will vary greatly from quarter to quarter and year to year depending on, among other things, sports teams’
−Removed: performances, the timing of tours, tour cancellations, event ticket sales, weather, seasonal and other fluctuations in our operating results, the timing of guaranteed payments, financing activities, competitive dynamics, acquisitions and investments and receivables management.
−Removed: Because our results may vary significantly from quarter to quarter and year to year, our financial results for one quarter or year cannot necessarily be compared to another quarter or year and may not be indicative of our future financial performance in subsequent quarters or years.
−Removed: Typically, we experience lower financial performance in the first, second, and third quarters of the calendar year due to the timing of large-scale events and concert onsales and we experience increased activity in the fourth quarter when all major sports leagues are in season and there is an increase in order volume for theater events during the holiday season and concert on-sales for the following year.
−Removed: In addition, the timing of tours of top grossing acts can impact comparability of quarterly results year over year and potentially annual results.
−Removed: Similarly, the number of games in playoff series and the teams involved can vary year over year and impact our results.
−Removed: The seasonality of our business could create cash flow management risks if we do not adequately anticipate and plan for periods of decreased activity, which could negatively impact our ability to execute on our strategy, which in turn could harm our results of operations.
−Removed: Due to the unprecedented stoppage of concert, sporting and theater events globally in mid-March of 2020, and the gradual reopening of live events, we did not experience our typical seasonality trends in 2020 or 2021.
−Removed: We rely on the experience and expertise of our senior management team, key technical employees and other highly skilled personnel and the failure to retain, motivate or integrate any of these individuals could have an adverse effect on our business, financial condition or results of operations.
−Removed: Our success depends upon the continued service of our senior management team and key technical employees, as well as our ability to continue to attract and retain additional highly qualified personnel.
−Removed: Our success depends on our continuing ability to identify, hire, develop, motivate, retain and integrate highly skilled personnel for all areas of our organization.
+Added: the diversion of management’s attention from other business concerns;
+Added: the inherent risks in entering new markets or lines of business in which we have limited or no direct experience, including the impact of newly applicable laws and regulations;
+Added: and the potential loss of key employees, customers and partners of the acquired company.
+Added: Any of these risks could significantly affect our ability to complete acquisitions and expand our business.
+Added: For example, our acquisitions of Fanxchange, Betcha, Wavedash and Vegas.com all involved inherent risks, including, as applicable, those associated with integrating new lines of business, operating in new markets and adhering to new regulatory regimes.
+Added: The success of these and any future acquisitions is based, in part, on our ability to overcome these risks.
+Added: We are subject to risks associated with the growth of our international operations.
+Added: We have operations in Canada and Japan, and we may continue to expand our international operations.
+Added: Accordingly, our business is subject to risks associated with doing business internationally, including, but not limited to:
+Added: complying with multiple, conflicting and changing laws and regulations, including those relating to privacy, data protection, anti-bribery, anti-corruption and anti-money laundering, in the jurisdictions in which we now or may in the future operate;
+Added: obtaining governmental approvals, permits and licenses;
+Added: obtaining and enforcing intellectual property rights;
+Added: staffing and managing foreign operations;
+Added: financial risks such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises and exposure to foreign currency exchange rate fluctuations;
+Added: preferences by local consumers for local competitors;
+Added: and political and economic instability.
+Added: We may also have difficulty expanding our international operations because of limited brand recognition, leading to delayed or limited acceptance of our services by ticket buyers, sellers and partners in new markets and increased marketing and other costs associated with establishing our brand.
+Added: If we are unable to successfully expand internationally or manage the risks associated therewith, our business, financial condition and results of operations could be adversely affected.
+Added: Our financial performance in certain periods may not be indicative of, or comparable to, our financial performance in subsequent periods due to seasonality and other operational factors.
+Added: Our financial results and cash needs vary from period to period depending on, among other things:
+Added: popularity and demand for certain performers and events;
+Added: sports teams’ performances, and the length and team composition of sports playoff series and championship games;
+Added: the timing of top grossing events;
+Added: event cancellations;
+Added: weather, seasonal and other fluctuations in our operating results;
+Added: the timing of guaranteed payments, investments, acquisitions and financing activities;
+Added: competitive dynamics;
+Added: and the timing of disbursements of accounts payable to sellers and partners around quarter-end.
+Added: Because our results may vary significantly from period to period, our financial results for one period cannot necessarily be compared to another period and may not be indicative of our financial performance in future periods.
+Added: Typically, we experience lower financial performance in the first, second and third quarters, with slightly increased activity in the fourth quarter when all major sports leagues are in season and there is an increase in order volume for theater events during the holiday season and concert on-sales for the following year.
+Added: The timing of top-grossing tours can also impact comparability of quarterly results year over year and, in rare cases, annual results.
+Added: Similarly, the number of sports games and the teams involved in playoff series can vary year over year and impact our results.
+Added: The seasonality of our business could create cash flow management risks if we do not adequately anticipate and plan for periods of decreased activity, which could adversely affect our business, financial condition and results of operations by negatively impacting our ability to execute on our strategy.
+Added: We rely on the experience and expertise of our senior management team, key technical employees and other highly skilled personnel, and the failure to retain and motivate these individuals could adversely affect our business.
+Added: Our success depends upon the continued service of our senior management team and key technical employees, as well as our ability to continue to identify, attract, hire, integrate, develop, motivate and retain highly skilled personnel for all areas of our organization.
Each of our executive officers, key technical personnel and other employees could terminate his or her relationship with us at any time.
−Removed: The loss of any member of our senior management team or key personnel might significantly delay or prevent the achievement of our business objectives and could harm our business and our relationships.
+Added: The loss of any member of our senior
+Added: management team or key personnel could significantly delay or prevent the achievement of our business objectives and/or harm our business and relationships.
+Added: As such, effective succession planning and the execution of smooth personnel transitions is important to our long-term success.
Competition in our industry for qualified employees is intense.
−Removed: In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees.
−Removed: We face significant competition for personnel, particularly in Chicago, Illinois, Dallas, Texas and Toronto, Ontario.
−Removed: To attract top talent, we have had to offer, and we will need to continue to offer, competitive compensation and benefits packages.
−Removed: We may also need to increase our employee compensation levels in response to competition and rising inflation.
−Removed: In 2020, as a result of the COVID-19 pandemic, we reduced our workforce by approximately 50%.
−Removed: In 2021, as the economy recovered from the COVID-19 pandemic, we made extraordinary efforts to attract and secure top talent, which resulted in our workforce reaching approximately 85% of our pre-COVID number.
−Removed: In 2022, we surpassed our pre-COVID headcount by approximately 10%.
−Removed: However, the market for talent continues to be competitive.
−Removed: If we fail to effectively manage our hiring needs or successfully integrate new hires, our efficiency, ability to meet forecasts and our employee morale, productivity and retention could suffer, which may harm our business.
−Removed: Impairment of our goodwill could negatively impact our financial results and financial condition.
−Removed: In accordance with accounting principles generally accepted in the United States of America, we test goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
+Added: In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting, hiring, motivating and retaining employees.
+Added: We face significant competition for personnel.
+Added: To attract top talent, we have needed, and will continue to need, to offer competitive compensation and benefits packages.
+Added: We may also need to increase our employee compensation levels in response to competition and inflation.
+Added: If we fail to effectively manage our hiring needs or successfully integrate new hires, our efficiency and ability to meet forecasts, as well as employee morale, productivity and retention, could suffer, which may adversely affect our business.
+Added: Impairment of our goodwill has in the past and could in the future adversely impact our financial results and financial condition.
+Added: In accordance with accounting principles generally accepted in the United States of America (“GAAP”), we review our goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
If the carrying amount of our goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded.
−Removed: During the year ended December 31, 2020, we recognized a total non-cash impairment charge of $573.8 million, including an impairment of goodwill of $377.1 million.
−Removed: As of December 31, 2021, we had goodwill of approximately $718.2 million, which constituted approximately 51% of our total assets at that date.
+Added: During the year ended December 31, 2020, we recognized a non-cash impairment charge of $573.8 million, including an impairment of goodwill of $377.1 million.
As of December 31, 2023, we had goodwill of approximately $947.4 million, which constituted approximately 61% of our total assets at that date.
−Removed: Due to stock market volatility, economic uncertainty and the continued impact of the COVID-19 pandemic on our business, we cannot provide assurance that remaining goodwill will not be further impaired in future periods.
+Added: Due to stock market volatility, economic uncertainty and inflationary concerns, there can be no assurance that our goodwill will not be impaired in the future, as it has in prior periods.
Impairment may result from, among other things, a significant decline in our expected cash flows, an adverse change in the business climate and slower growth rates in our industry.
−Removed: If we are required to record an impairment charge for goodwill in the future, this would adversely impact our financial results.
−Removed: We may be adversely affected by the effects of inflation.
−Removed: Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the revenues we earn from our customers.
−Removed: The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.
+Added: If we are required to record an impairment charge for goodwill in the future, it could adversely affect our financial condition.
+Added: Our business may be adversely affected by the effects of inflation.
+Added: Inflation has the potential to adversely affect our business, financial condition, including liquidity, and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in our revenues.
+Added: The existence of inflation in the economy has resulted in, and may continue to result in, high interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.
As a result of inflation, we have experienced and may continue to experience cost increases.
−Removed: Although we may take measures to mitigate the impact of inflation, these measures may not be effective and our business, financial condition, results of operations and liquidity could be materially adversely affected.
−Removed: Even if such measures are effective, there could be a difference in timing between the impact of inflation and effects of the mitigating actions we take.
−Removed: Risks Relating to Government Regulation and Litigation
−Removed: The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing applications of privacy regulations.
+Added: Although we may take measures to mitigate the impacts of inflation, these measures may not be effective and our business, financial condition, including liquidity, and results of operations could be adversely affected.
+Added: Even if such measures are effective, there could be a difference in timing between the impacts of inflation and the effects of the mitigating actions we take.
+Added: Our business may be adversely affected by extraordinary events, including terrorist attacks, mass-casualty incidents, military actions, acts of civil unrest, public health concerns, public safety incidents, security concerns, natural disasters and severe weather events.
+Added: The occurrence and threat of extraordinary events, including terrorist attacks, intentional or unintentional mass-casualty incidents, military actions, acts of civil unrest, public health concerns such as contagious disease epidemics or pandemics (and governmental responses thereto), public safety incidents such as Astroworld, security concerns or security-related disruptions, natural disasters or similar severe weather events, may deter performers, promoters, teams or facilities from holding live events and substantially decrease the demand for live events.
+Added: The exposure of our Vegas.com property to certain of these risks may be exacerbated due to its concentration in Southern Nevada, which has experienced water and electricity shortages.
+Added: The occurrence of such extraordinary events has in the past adversely affected, and may in the future adversely affect, our business, financial condition and results of operations.
+Added: Related event cancellations could also adversely affect our financial performance, as we may be obligated to issue refunds or credits for tickets purchased for events that are not rescheduled.
+Added: Risks Related to Government Regulation and Litigation
+Added: We are subject to extensive governmental regulation, and our failure to comply with these regulations could adversely affect our business, financial condition and results of operations.
+Added: Our operations are subject to federal, state, local and international laws and regulations, which are subject to change at any time, governing key aspects of our business such as privacy, data protection, intellectual property, competition, consumer protection, ticketing, payments, export taxation, anti-bribery, anti-corruption, anti-money laundering, fantasy sports and sports gaming.
+Added: While we attempt to conduct our business and operations in compliance with all applicable laws and regulations, there can be no assurance that a particular law or regulation will not be interpreted or enforced in a manner contrary to our understanding of it.
+Added: Our failure to comply with any such laws or regulations could result in proceedings and/or fines against us by governmental authorities and private actions brought by individuals which, if material, could adversely affect our business, financial condition and results of operations.
+Added: The promulgation of new and sometimes conflicting laws and regulations could also unfavorably impact our business and make compliance more complex, costly and challenging.
+Added: From time to time, governmental authorities and/or individuals commence investigations, inquiries or litigation with respect to our compliance with applicable consumer protection, advertising, unfair business practice, disclosure and other laws, particularly as related to ticket resale services.
+Added: While we have generally seen an easing of ticket resale restrictions, a limited number of jurisdictions prohibit the resale of event tickets at prices above the face value of the tickets or at all, or highly regulate the resale of tickets.
+Added: New laws and regulations or changes to existing laws and regulations could restrict or inhibit our ability to operate, or the ability of ticket buyers, sellers and our partners to continue to use, our ticket marketplace.
+Added: We have incurred legal expenses in connection with the defense of such investigations and litigation in the past and may be required to incur additional expenses in the future.
+Added: Our business depends on the ability of sellers to sell tickets on the secondary market unencumbered.
+Added: Our business depends upon sellers having the ability to list tickets for sale on the secondary ticket market for events put on by artists, teams and promoters.
+Added: While we have generally seen an easing of ticket resale restrictions, any actions taken by governments, rights holders or companies that issue tickets (i.e., primary ticketing companies), such as enacting restrictions regarding resale policies, requiring certain disclosures, using technology to limit where and how tickets are sold on the secondary market, charging incremental fees for the ability to sell tickets on the secondary market or partnering with other resale marketplaces on an exclusive basis, could result in reduced demand for our services, which would adversely affect our business, financial condition and results of operations.
+Added: The processing, storage, use and disclosure of personal or sensitive information could give rise to liabilities and additional costs as a result of governmental regulation, litigation and conflicting legal requirements, including those relating to personal privacy rights.
We receive, transmit and store a large volume of personal data and other user data.
Numerous federal, state and international laws address privacy, data protection and the collection, storage, sharing, usage, disclosure and protection of personal data and other user data.
−Removed: In the United States, numerous states already have, and a number of states are looking to adopt or expand, data protection legislation requiring companies like ours to consider solutions to meet differing rights, needs and expectations of buyers and sellers.
−Removed: For example, California enacted the California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020.
−Removed: The CCPA established a new privacy framework for covered businesses such as ours and may require us to further modify our data processing practices and policies and incur additional compliance-related costs and expenses.
+Added: states have, and a number of additional states are looking to adopt or expand, data protection legislation requiring companies like ours to consider solutions to meet differing rights, needs and expectations of consumers.
+Added: For example, the California Consumer Privacy Act (the “CCPA”), which took effect in January 2020, established a new privacy framework for covered businesses such as ours and may require us to further modify our data processing practices and policies and incur additional compliance-related costs and expenses.
The CCPA requires companies that process information on California residents to disclose to consumers their data collection, use and sharing practices and grants consumers certain rights, including to opt out of certain data sharing with third parties.
−Removed: The CCPA provides for statutory penalties, and a private right of action for data breaches resulting from a failure to implement
−Removed: reasonable security procedures and practices.
−Removed: In addition, in November 2020, California voters approved the California Privacy Rights Act (“CPRA”) ballot initiative which introduced significant amendments to the CCPA and established and funded a dedicated California privacy regulator, the California Privacy Protection Agency (“CPPA”).
−Removed: The amendments introduced by the CPRA go into effect on January 1, 2023, and new implementing regulations are expected to be introduced by the CPPA, which may require further modifications to our data processing practices and policies and to incur additional compliance-related costs and expenses.
−Removed: Further, in March 2021, Virginia enacted the Virginia Consumer Data Protection Act, and in July 2021, Colorado enacted the Colorado Privacy Act.
−Removed: In addition, Connecticut has passed the Personal Data Privacy and Online Monitoring Act, which is effective on July 1, 2023 and Utah has passed the Utah Consumer Privacy Act, which is effective on December 31, 2023.
−Removed: These are all comprehensive privacy statutes that share similarities with the CCPA and CPRA.
+Added: The CCPA provides for statutory penalties and a private right of action for data breaches resulting from a failure to implement reasonable security procedures and practices.
+Added: In addition, the California Privacy Rights Act (the “CPRA”), which went into effect in January 2023, introduced significant amendments to the CCPA and established and funded a dedicated California privacy regulator, the California Privacy Protection Agency, who issued new implementing regulations in March 2023 and proposed additional revisions to the CCPA in December 2023.
+Added: These revisions, as well as any other future changes, may require us to further modify our data processing practices and policies and to incur additional compliance-related costs and expenses.
+Added: Virginia enacted the Virginia Consumer Data Protection Act in March 2021, Colorado enacted the Colorado Privacy Act in July 2021, Connecticut enacted the Personal Data Privacy and Online Monitoring Act in July 2023 and Utah has enacted the Utah Consumer Privacy Act in December 2023.
+Added: These are all comprehensive privacy statutes that share similarities with the CCPA and the CPRA.
Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States, which could increase our potential liability.
−Removed: The enactment of such laws could have potentially conflicting requirements that would make compliance challenging and necessitate further modification of our data processing practices and policies.
−Removed: In addition to new regulation, courts around the country continue to evolve their interpretation of applicable data privacy and protection laws, including the CCPA.
−Removed: Outside the United States, personal data and other user data is increasingly subject to legislation and regulations in numerous jurisdictions in which we operate, the intent of which is to protect the privacy of information that is collected, processed and transmitted in or from the governing jurisdiction.
+Added: The enactment of such laws could have potentially conflicting requirements that would make compliance more complex, costly and challenging and may require us to further modify our data processing practices and policies and to incur additional compliance-related costs and expenses.
+Added: In addition to new regulations, courts around the country continue to evolve their interpretation of applicable data privacy and protection laws, including the CCPA.
+Added: There has also been a noticeable uptick in class action litigation in the United States in which plaintiffs have utilized a variety of laws, including the Video Privacy Protection Act of 1988 and state wiretapping laws, in relation to the use of tracking technologies, such as cookies and pixels.
+Added: Such litigation may lead legislatures to consider responsive regulation.
+Added: Outside the United States, personal and other user data is increasingly subject to legislation and regulations in numerous jurisdictions in which we operate, the intent of which is to protect the privacy of information that is collected, processed and transmitted in or from the governing jurisdiction.
Foreign data protection, privacy, information security, user protection and other laws and regulations are often more restrictive and complex than those in the United States.
−Removed: For example, the Canadian Personal Information Protection and Electronic Documents Act (“PIPEDA”) is a comprehensive privacy and security law for organizations collecting, using, or disclosing information about identified individuals for commercial purposes, and may impose obligations upon organizations subject to that law that are greater than what is commonplace in the United States.
+Added: For example, the Canadian Personal Information Protection and Electronic Documents Act (“PIPEDA”) is a comprehensive privacy and security law for organizations collecting, using or disclosing information about identified individuals for commercial purposes, and may impose obligations upon covered organizations that are greater than what is common in the United States.
Certain Canadian provinces have their own data protection regulations as well.
−Removed: Similarly, the United Kingdom, the European Union, and countries in the European Economic Area (“EEA”) traditionally have taken broader views as to types of data that are subject to privacy and data protection laws and regulations, and have imposed different legal obligations on companies in this regard.
−Removed: For example, the European Union General Data Protection Regulation (“GDPR”) became effective May 25, 2018.
−Removed: The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior.
−Removed: Although we do not currently trigger the application of the GDPR, if we materially alter our operations such that we become established in the EU/UK (e.g., by employing individuals in those locations), begin monitoring individuals in the EU/UK or demonstrate an intention to offer goods and services to individuals in the EU/UK, we may be required to comply with data protection laws in the EEA or the UK, such as the GDPR and the UK GDPR.
−Removed: If we are required to comply with PIPEDA or EEA or UK data privacy laws, this may significantly increase our operational costs and our overall risk exposure.
−Removed: In addition, the Canadian Parliament has debated a new privacy and security law, proposed to replace PIPEDA, which may impose new or additional obligations upon companies subject to it.
−Removed: The proposed new privacy and security bill was introduced on June 18, 2022 and is subject to further debate and amendment.
+Added: Similarly, the United Kingdom, the European Union and countries in the European Economic Area (the “EEA”) traditionally have taken broader views on, and have imposed different legal obligations on companies as to, the types of data that are subject to privacy and data protection laws and regulations.
+Added: For example, the E.U.
+Added: General Data Protection Regulation (the “GDPR”), which took effect in May 2018, applies to any company established in the EEA and to companies outside the EEA if they collect and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior.
+Added: Although we do not currently trigger the application of the GDPR, if we materially alter our operations such that we become established in the European Union and/or the United Kingdom (e.g., by employing individuals in those locations), begin monitoring individuals in the European Union and/or the United Kingdom or demonstrate an intention to offer goods and services to individuals in the European Union and/or the United Kingdom, we may be required to comply with EEA and/or U.K.
+Added: data protection laws, such as the GDPR and the U.K.
+Added: General Data Protection Regulation, which took effect in January 2021.
+Added: If we are required to comply with PIPEDA or EEA or U.K.
+Added: data privacy laws, it may significantly increase our operational costs and our overall risk exposure.
+Added: In addition, the Canadian Parliament has debated a new privacy and security law, proposed to replace PIPEDA, which may impose new or additional obligations upon covered companies.
+Added: The proposed new privacy and security bill was introduced in June 2022 and is subject to further debate and amendment.
If PIPEDA is replaced with a new privacy and security law in the future, it may require us to further modify our data processing practices and policies and incur additional compliance-related costs and expenses.
−Removed: The interpretation and application of many privacy and data protection laws are, and will likely remain, uncertain, and it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or product features.
−Removed: If so, in addition to the possibility of fines, lawsuits and other claims and penalties, we could be required to fundamentally change our business activities and practices or modify our products, which could harm our business.
+Added: The Japanese Act on the Protection of Personal Information No.
+Added: 57 of 2003, which also governs the handling of personal information, may impose obligations on covered entities that are in addition to, or differ from, those in other jurisdictions (for example, it differs from the GDPR with respect to its approach to notifications and the cross-border transfer of personal data).
+Added: The interpretation and application of many privacy and data protection laws are, and will likely remain, uncertain, and it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices, policies or product features.
+Added: If so, in addition to the possibility of fines, lawsuits and other claims and penalties, we could be required to fundamentally change our business activities and practices or modify our practices, policies or products, which could adversely affect our business.
In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that legally or contractually apply to us.
−Removed: Any inability to adequately address privacy, data protection and data security concerns or comply with applicable privacy, data protection or data security laws, regulations, policies and other obligations could result in additional cost and liability to us, damage our reputation, inhibit sales and harm our business.
−Removed: Our failure, and/or the failure by our various service providers and partners, to comply with applicable privacy policies or federal, state or similar international laws and regulations or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in the unauthorized access,
−Removed: acquisition, or release of personal data or other user data, or the perception that any such failure or compromise has occurred, could negatively harm our brand and reputation, result in a loss of sellers, buyers or distribution partners, discourage potential sellers or buyers from trying our platform and/or result in fines and/or proceedings by governmental agencies and/or users, any of which could have a material adverse effect on our business, practices, results of operations and financial condition.
−Removed: In addition, U.S.
−Removed: and international law may in certain circumstances require businesses to notify affected individuals, governmental entities, and/or credit reporting agencies of certain security incidents affecting personal information.
−Removed: Such laws are inconsistent, and compliance in the event of a widespread security incident is complex and costly and may be difficult to implement.
−Removed: Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any response costs, remediation, and potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed.
−Removed: We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim.
−Removed: Unfavorable outcomes in legal proceedings in which we may be involved may adversely affect our business and operating results.
+Added: Any inability to adequately address privacy, data protection and data security concerns or comply with applicable privacy, data protection or data security laws, regulations, policies and other obligations could result in additional cost and liability to us and adversely affect our reputation, sales and business.
+Added: Our failure, and/or the failure by our various service providers and partners, to comply with applicable privacy policies, laws, regulations or other obligations relating to privacy, data protection or information security, or any compromise of security that results in the unauthorized access, acquisition or release of personal or other user data, or the perception that any such failure or compromise has occurred, could harm our brand and reputation, result in a loss of ticket sellers, buyers or partners, discourage potential ticket sellers, buyers or partners from using our platform and result in fines and proceedings by governmental agencies and users, any of which could adversely affect our business, financial condition and results of operations.
+Added: In addition, U.S., Canadian and Japanese laws require, and laws in other jurisdictions in which we may operate in the future may in certain circumstances require, businesses to notify affected individuals, governmental entities and/or credit reporting agencies of certain cybersecurity incidents affecting personal information.
+Added: Certain of our contractual obligations contain similar requirements.
+Added: Such requirements are inconsistent, and compliance in the event of a widespread cybersecurity incident may be complex, costly and difficult to implement.
+Added: These risks may increase not only as we expand our operations in new jurisdictions, but also as our business continues to involve greater numbers of ticket buyers, sellers and partners.
+Added: Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any response and remediation costs and potential claims related to cybersecurity incidents to which we are exposed or may be inadequate to indemnify us for all or any portion of liabilities that may be imposed.
+Added: There can be no assurance that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a cybersecurity incident or that the insurer will not deny coverage of any future claim.
+Added: Unfavorable outcomes in legal proceedings in which we, ticket sellers or our partners may be involved could adversely affect our business, financial condition and results of operations.
We may be called on to defend ourselves against lawsuits relating to our business operations.
−Removed: Some of these claims may seek significant damage amounts due to the nature of our business.
+Added: Some of these claims may seek significant damages due to the nature of our business.
Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings.
Our results may be affected by the outcome of future litigation.
−Removed: Unfavorable rulings in our legal proceedings may have a negative impact on us that may be greater or smaller depending on the nature of the rulings.
−Removed: In addition, we are currently, and from time to time in the future may be, subject to various other claims, investigations, legal and administrative cases and proceedings (whether civil or criminal) or lawsuits by governmental agencies or private parties.
−Removed: If the results of these investigations, proceedings or suits are unfavorable to us or if we are unable to successfully defend against third-party lawsuits, we may be required to pay monetary damages or may be subject to fines, penalties, injunctions or other censure that could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim, we may have to devote significant financial and management resources to address these issues, which could harm our business, financial condition and results of operations.
−Removed: Unfavorable legislative outcomes may adversely affect our industry, our business and our operating results.
+Added: Unfavorable rulings in legal proceedings in which we, ticket sellers or our partners may be involved may have a negative impact on us that may be greater or smaller than expected depending on the nature of the rulings.
+Added: In addition, we are currently, and from time to time in the future, we, ticket sellers and our partners may be subject to various other claims, investigations, legal and administrative cases, and proceedings and lawsuits (whether civil or criminal) by governmental agencies or private parties.
+Added: If we or they are unable to successfully defend against these claims, investigations, cases, proceedings or lawsuits, or if the results thereof are unfavorable, we or they may be required to pay monetary damages or be subject to fines, penalties, injunctions or other censure that could directly or indirectly adversely affect our business, financial condition and results of operations.
+Added: Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim involving us, such investigation, proceeding, lawsuit or claim, regardless of the outcome or merit thereof, could result in substantial costs and the diversion of management resources, any of which could adversely affect our business, financial condition and results of operations.
+Added: Unfavorable legislative outcomes could adversely affect our industry, business and operating results.
Approximately 40 states regulate the secondary ticket market, such as by requiring certain disclosures, refunding practices or other consumer affairs obligations.
−Removed: It is possible that further regulation or unfavorable legislative outcomes imposing additional restrictions on ticket resales, such as maximum resale price caps and bans on transferability, may adversely affect our industry, our business and our operating results.
−Removed: Various jurisdictions have enacted, and others may enact, rules and regulations, including tax and license requirements for daily fantasy sports operators that may make the entry process cumbersome, expensive, and lengthy.
−Removed: Our growth potential depends on the legal status of real-money daily fantasy sports in various jurisdictions and our ability to obtain licenses to operate in jurisdictions where licenses are required.
+Added: While we have generally seen an easing of ticket resale restrictions, it is possible that further regulation or unfavorable legislative outcomes impose additional restrictions, such as resale price caps and bans on transferability, could adversely affect our industry, business and operating results.
+Added: Various jurisdictions have enacted, and others may in the future enact, rules and regulations, including tax and license requirements, for daily fantasy sports operators that may make the entry process cumbersome, expensive and lengthy.
+Added: The growth potential of our Vivid Picks daily fantasy sports offering depends on the legal status of real-money daily fantasy sports in various jurisdictions and our ability to obtain licenses to operate in jurisdictions where licenses are required.
We currently offer our fantasy sports contests in the District of Columbia and 23 states that either do not require a license or where we have obtained the required license.
−Removed: Any change in existing daily fantasy sports rules and regulations or their interpretation related to our daily fantasy sports product, or the regulatory climate applicable to daily fantasy sports, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future.
+Added: Any change in existing daily fantasy sports rules and regulations or their interpretation related to Vivid Picks, or the regulatory climate applicable to daily fantasy sports, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future.
Our business may be subject to sales tax and other indirect taxes in various jurisdictions.
−Removed: The application of indirect taxes, such as sales and use, amusement, value-added, goods and services, business and gross receipts, to businesses like ours, and to ticket buyers and sellers in our marketplace, is a complex and evolving
+Added: The application of indirect taxes, such as sales and use, amusement, value-added, goods and services, business and gross receipts, to businesses like ours, and to ticket buyers and sellers in our marketplace, is a complex and evolving issue.
Significant judgment is required to evaluate applicable tax obligations and, as a result, amounts recorded are subject to adjustment.
In many cases, the ultimate tax determination is uncertain because it is unclear how new and existing statutes might apply to our business.
−Removed: One or more states, localities, the federal government or other countries may seek to impose additional reporting, record-keeping or indirect tax collection obligations on businesses like ours that facilitate online marketplaces.
−Removed: Imposition of an information reporting or tax collection requirement could decrease seller activity on our platform, which would harm our business.
−Removed: New legislation could require us, or sellers on our marketplace, to incur substantial costs in order to comply, including costs associated with tax calculation, collection and remittance and audit requirements, which could adversely affect our business and results of operations.
−Removed: It is possible that we could face sales and use tax and value-added tax audits in the future and that state or international tax authorities could assert that we are obligated to collect additional amounts as taxes on behalf of sellers and remit those taxes to those authorities.
−Removed: We could also be subject to audits and assessments with respect to states and international jurisdictions for which we have not accrued tax liabilities.
−Removed: A successful assertion that we should be collecting additional sales or other taxes in jurisdictions where we have not historically done so, and do not accrue for sales or other taxes, could result in substantial tax liabilities for past sales and otherwise harm our business and results of operations.
−Removed: Our business is dependent on the ability for sellers to sell tickets on the secondary market unencumbered.
−Removed: Our business is dependent upon sellers having the ability to list tickets for sale on the secondary ticket market for events put on by artists, teams and promoters.
−Removed: Any actions taken by federal, state or local governments, rights holders or companies that issue tickets (i.e., the primary ticketing companies), such as enacting restrictions regarding resale policies, using technology to limit where and how tickets are sold on the secondary market, charging incremental fees for the ability to sell tickets on the secondary market or partnering with other resale marketplaces on an exclusive basis, could result in reduced demand for our services, which would adversely affect our business, financial condition and results of operations.
−Removed: Risks Relating to Information Technology, Cybersecurity and Intellectual Property
−Removed: The success of our operations depends, in part, on the integrity of our systems and infrastructure, as well as affiliate and third-party computer systems, computer networks and other communication systems.
−Removed: System interruption and the lack of integration and redundancy in these systems and infrastructure may have an adverse impact on our business, financial condition and results of operations.
−Removed: System interruption and the lack of integration and redundancy in the information systems and infrastructure, both of our own ticketing systems and other computer systems and of affiliate and third-party software, computer networks and other communications systems service providers on which we rely, may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
+Added: One or more states, localities or countries may seek to impose additional reporting, recordkeeping or indirect tax collection obligations on businesses like ours that facilitate online marketplaces.
+Added: Imposition of an information reporting or tax collection requirement could decrease ticket seller activity on our platform, which would adversely affect our business.
+Added: New legislation could require us, or ticket sellers on our marketplace, to incur substantial compliance costs, including costs associated with tax calculation, collection and remittance and audit requirements, which could adversely affect our business, financial condition and results of operations.
+Added: It is possible that we could face sales and use tax and value-added tax audits in the future and that federal, state, local or international tax authorities could assert that we are obligated to collect additional amounts as taxes on behalf of ticket sellers and remit those taxes to those authorities.
+Added: We could also be subject to audits and assessments with respect to jurisdictions for which we have not accrued tax liabilities.
+Added: A successful assertion that we should be collecting additional sales or other taxes in jurisdictions where we have not historically done so, and where we do not accrue for sales or other taxes, could result in substantial tax liabilities for past sales and otherwise adversely affect our business, financial condition and results of operations.
+Added: Risks Related to Information Technology, Cybersecurity and Intellectual Property
+Added: System interruptions and the lack of integration and redundancy in our and third-party information systems and infrastructure could adversely affect our business, financial condition and results of operations.
+Added: The success of our operations depends, in part, on the integrity of our information systems and infrastructure, as well as affiliate and third-party computer systems, computer networks and other communication systems.
+Added: System interruptions and the lack of integration and redundancy in the information systems and infrastructure, both of our own ticketing and other computer systems and of affiliate and third-party software, computer networks and other communications systems service providers on which we rely, may adversely affect our ability to operate our websites and mobile applications, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
Similarly, due to our reliance on a network of technology systems, many of which are outside of our control, changes to interfaces upon which we rely or a reluctance of our counterparties to continue supporting our systems could lead to technology interruptions.
−Removed: Such interruptions could occur by virtue of natural disaster, malicious actions such as cyber attacks or intrusions, or acts of terrorism or war, or human error.
−Removed: In addition, the loss of some or all of certain key personnel could require us to expend additional resources to continue to maintain our software and systems and could subject us to systems interruptions.
−Removed: The large infrastructure footprint that is required to operate our systems requires an ongoing investment of time, money and effort to maintain or refresh hardware and software and to ensure it remains at a level capable of servicing the demand and volume of business that we receive.
−Removed: Failure to do so may result in system instability, degradation in performance, or unfixable security vulnerabilities that could adversely impact both the business and the consumers utilizing our services.
+Added: Such interruptions could occur by virtue of natural disaster, malicious actions such as cyber-attacks or intrusions, acts of terrorism, military actions or human error.
+Added: In addition, the loss of certain key personnel could require us to expend additional resources to continue to maintain our software and systems and subject us to systems interruptions.
+Added: The large infrastructure footprint that is required to operate our systems requires an ongoing investment of time, money and effort to maintain or refresh hardware and software and to ensure it remains at a level capable of servicing the demand and volume of our business.
+Added: Failure to do so may result in system instability, degradation in performance or unfixable security vulnerabilities that could adversely impact both our business and consumers.
While we have backup systems for certain aspects of our operations, disaster recovery planning by its nature may not be sufficient for all eventualities.
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If any of these adverse events were to occur, it could adversely affect our business, financial condition and results of operations.
−Removed: Cyber security risks, data loss or other breaches of our network security could materially harm our business and results of operations, and the processing, storage, use and disclosure of personal or sensitive information could give rise to liabilities and additional costs as a result of governmental regulation, litigation and conflicting legal requirements, including obligations relating to personal privacy rights.
+Added: Cybersecurity risks, data loss or other breaches of our network security or information systems could adversely affect our business, financial condition and results of operations.
Due to the nature of our business, we process, store, use, transfer and disclose certain personal or sensitive information about our customers and employees.
−Removed: Penetration of our network or other misappropriation or misuse of personal or sensitive information and data, including credit card information and other personally identifiable information, could cause interruptions in our operations and subject us to increased costs, litigation, inquiries and actions from governmental authorities, and financial or other liabilities.
−Removed: In addition, security breaches, incidents or the inability to protect information could lead to increased incidents of ticketing fraud and counterfeit tickets.
−Removed: Security breaches and incidents could also significantly damage our reputation with sellers, buyers, distribution partners and other third parties, and could result in significant costs related to remediation efforts, such as credit or identity theft monitoring.
−Removed: Such incidents may occur in the future, resulting in unauthorized, unlawful, or inappropriate access to, inability to access, disclosure of, or loss of the sensitive, proprietary and confidential information that we handle.
−Removed: Although we have developed systems and processes that are designed to protect customer and employee information and to prevent security breaches or incidents (which could result in data loss or other harm or loss), such measures cannot provide absolute security or certainty.
−Removed: It is possible that advances in computer and threat actor capabilities, new variants of malware, the development of new penetration methods and tools, inadvertent violations of company policies or procedures or other developments could result in a compromise of customer or employee information or a breach of the technology and security processes that are used to protect customer and employee information.
−Removed: The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems may change frequently and as a result, may be difficult for our business to detect for long periods of time.
−Removed: We have expended significant capital and other resources to protect against and remedy such potential security breaches, incidents and their consequences and will continue to do so in the future.
+Added: Penetration of our network or information systems or other misappropriation or misuse of personal or sensitive information and data, including credit card information and other personally identifiable information, could cause interruptions in our operations and subject us to increased costs, litigation, investigations and enforcement actions from governmental authorities, as well as financial or other liabilities.
+Added: In addition, cybersecurity incidents or the inability to protect information could lead to increased incidents of ticketing fraud and counterfeit tickets.
+Added: Cybersecurity incidents could also significantly damage our reputation with sellers, buyers, partners and other third parties, and could result in significant costs related to remediation efforts, including incident response and restoration and credit or identity theft monitoring.
+Added: Such incidents may occur in the future, resulting in unauthorized, unlawful or inappropriate access to, inability to access, or disclosure or loss of, the sensitive, proprietary and confidential information that we handle.
+Added: Although we have developed systems, practices and policies that are designed to protect customer and employee information and to prevent cybersecurity incidents (which could result in data loss or other harm or loss), such measures cannot provide absolute security or certainty.
+Added: It is possible that advances in computer and threat actor capabilities, new variants of malware, the development of new penetration methods and tools, inadvertent violations of our practices or policies or other developments could result in a compromise of, or a breach of the technology and cybersecurity processes that are used to protect, customer and employee information.
+Added: The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems may change frequently and, as a result, may be difficult for our business to detect for extended periods of time.
+Added: We have expended and will continue to expend significant capital and other resources to protect against and remedy such potential cybersecurity incidents and their consequences.
However, despite our efforts, we may be unaware of or unable to anticipate these techniques or implement adequate preventative measures.
−Removed: We also face risks associated with security breaches and incidents affecting third parties with which we are affiliated or with which we otherwise conduct business.
−Removed: In particular, hardware, software or applications we develop or procure from third parties may contain defects in design or manufacture and/or may pose a security risk that could unexpectedly compromise information security.
−Removed: Sellers, buyers and distribution partners are generally concerned with the security and privacy of the Internet, and any publicized security problems affecting our businesses and/or third parties may discourage sellers, buyers or distribution partners from doing business with us, which could have an adverse effect on our business, financial condition and results of operations.
−Removed: Canadian law and laws in all states and U.S.
−Removed: territories require businesses to notify affected individuals, governmental entities, and/or credit reporting agencies of certain security incidents affecting personal information.
−Removed: Such laws are inconsistent, and compliance in the event of a widespread security incident is complex and costly and may be difficult to implement.
−Removed: Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed.
−Removed: We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim.
−Removed: If we fail to adequately protect or enforce our intellectual property rights, our competitive position and our business could be materially adversely affected.
−Removed: Our proprietary technologies and information, including our software, informational databases, and other components that make our products and services are critical to our success, and we seek to protect our technologies, products and services through a combination of intellectual property rights, including trademarks, domain names, copyrights and trade secrets, as well as through contractual restrictions with employees, customers, suppliers, affiliates and others.
−Removed: Despite our efforts, it may be possible for a third-party to copy or otherwise obtain and use our
−Removed: intellectual property without authorization which, if discovered, might require legal action to correct.
+Added: We also face risks associated with cybersecurity incidents affecting third parties with which we are affiliated, partnered or otherwise conduct business.
+Added: In particular, hardware, software or applications we develop or procure from third parties may contain design or manufacturing defects and/or pose cybersecurity risks that could unexpectedly compromise information security.
+Added: Ticket sellers, buyers and partners are generally concerned with the security and privacy of the internet, and any publicized cybersecurity incidents affecting our business or third parties may discourage such sellers, buyers or partners from doing business with us and harm our reputation, which could adversely affect our business, financial condition and results of operations.
+Added: For more information on cybersecurity-related legal and regulatory risks, see “Risks Related to Government Regulation and Litigation - The processing, storage, use and disclosure of personal or sensitive information could give rise to liabilities and additional costs as a result of governmental regulation, litigation and conflicting legal requirements, including those relating to personal privacy rights” above.
+Added: If we fail to adequately protect or enforce our intellectual property rights, our competitive position and business could be adversely affected.
+Added: Our proprietary technologies and information, including our software, informational databases and other components that make our products and services, are critical to our success.
+Added: We seek to protect our technologies, products and services through a combination of intellectual property rights, including trademarks, domain names, copyrights and trade secrets, as well as through contractual restrictions with employees, customers, suppliers, affiliates, partners and others.
+Added: Despite our efforts, it may be possible for a third party to copy or otherwise obtain and use our intellectual property without authorization, which, if discovered, might require legal action to correct.
In addition, third parties may independently and lawfully develop products or services substantially similar to ours.
−Removed: While we do not currently hold patents over our technology, we do have ten pending patent applications in the United States, Canada and the United Kingdom and we may file additional patent applications in the future.
+Added: While we do not currently hold patents over our technology, we have 10 pending patent applications in the United States, Canada and the United Kingdom, six published patents in the United States and the United Kingdom and one completed patent under the Patent Cooperation Treaty, and we may file additional patent applications in the future.
We seek to protect our trade secrets and proprietary know-how and technology methods through confidentiality agreements and other access control measures.
−Removed: Failure of such strategies to protect our technology or our inability to protect patents in the future to the extent we obtain them could have a materially adverse impact on our business, financial condition and results of operations.
−Removed: We have been granted trademark registrations with the United States Patent and Trademark Office and/or various foreign authorities for certain of our brands.
−Removed: Our existing or future trademarks may be adjudicated invalid by a court or may not afford us adequate protection against competitors.
−Removed: We cannot be certain that the measures we implement will prevent infringement, misappropriation, dilution or other violations of our intellectual property rights, particularly in foreign countries where the laws may not protect our proprietary rights as fully as they do in the United States.
−Removed: Our failure to protect our intellectual property rights in a meaningful manner or challenges to our related contractual rights could result in erosion of our brand names or other intellectual property and could adversely affect our business, financial condition and results of operations.
−Removed: Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others.
−Removed: Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations.
−Removed: We may face potential liability and expense for legal claims alleging that the operation of our business infringes intellectual property rights of third parties, who may assert claims against us for unauthorized use of such rights.
−Removed: We cannot be certain that the operation of our business does not, or will not, infringe or otherwise violate the intellectual property rights of third parties.
−Removed: From time to time, we have been and may in the future be, subject to legal proceedings and claims alleging that we infringe or otherwise violate the intellectual property rights of third parties.
−Removed: These claims, whether or not successful, could divert management's time and attention away from our business and harm our reputation and financial condition.
−Removed: In addition, the outcome of litigation is uncertain, and third parties asserting claims could secure a judgment awarding substantial damages, as well as injunctive or other equitable relief against us, which could require us to rebrand, redesign, or reengineer our platform, products or services, and/or effectively block our ability to distribute, market or sell our products and services.
−Removed: Our payments system depends on third-party providers and is subject to risks that may harm our business.
−Removed: We rely on third-party providers to support our payment methods, as our ticket buyers primarily use credit or debit cards to purchase tickets on our marketplace.
+Added: However, a failure of such strategies to protect our technology or our inability to protect patents in the future could adversely affect our business, financial condition and results of operations.
+Added: We have been granted trademark registrations with the U.S.
+Added: Patent and Trademark Office and various foreign authorities for certain of our brands.
+Added: However, our existing or future trademarks may be adjudicated invalid by a court or may not afford us adequate protection against competitors.
+Added: There can be no assurance that the measures we implement will prevent infringement, misappropriation, dilution or other violations of our intellectual property rights, particularly in foreign countries where the laws may not protect our proprietary rights as fully as they do in the United States.
+Added: Our failure to protect our intellectual property rights in a meaningful manner or challenges to our related contractual rights could result in erosion of our brand names or other intellectual property and adversely affect our business, financial condition and results of operations.
+Added: Litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others.
+Added: Any such litigation, regardless of the outcome or merit thereof, could result in substantial costs and the diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations.
+Added: We may face potential liability and costs for legal claims alleging that we infringe upon third-party intellectual property rights.
+Added: There can be no assurance that we do not, or will not, infringe upon or otherwise violate third-party intellectual property rights.
+Added: From time to time, we have been, and may in the future be, subject to legal proceedings and claims alleging that we infringe upon or otherwise violate such rights.
+Added: These claims, regardless of the outcome or merit thereof, could result in substantial costs and the diversion of management and technical resources and adversely affect our reputation and financial condition.
+Added: In addition, the outcome of litigation is uncertain, and third parties asserting claims could secure a judgment against us awarding substantial damages, as well as injunctive or other equitable relief, which could require us to rebrand, redesign or reengineer our platform, products or services, and/or effectively block our ability to distribute, market or sell our products and services.
+Added: Our payments system depends on third-party providers and is subject to risks that may adversely affect our business.
+Added: We rely on third-party providers to support our payment methods, as ticket buyers primarily use credit or debit cards to purchase tickets on our marketplace.
Nearly all our revenue is associated with payments processed through a single provider, which relies on banks and payment card networks to process transactions.
−Removed: If this provider or any of its vendors do not operate well with our platform or suffer any failures, our payments systems and our business could be adversely affected.
−Removed: If this provider does not perform adequately or determines certain types of transactions are prohibited, if this provider’s technology does not interoperate well with our platform, or if our relationships with this provider, the bank or the payment card networks on which it relies were to terminate or be suspended unexpectedly, ticket buyers may find our platform more difficult to use.
−Removed: Such an outcome could harm the ability of sellers to use our platform, which could cause them to use our platform less.
+Added: If this provider or any of its vendors do not operate well with our platform or suffer any failures, our payments systems and business could be adversely affected.
+Added: If this provider does not perform adequately or determines that certain types of transactions are prohibited, if this provider’s technology does not interoperate well with our platform or if our relationships with this provider (or the bank or the payment card networks on which it relies) were to terminate or be suspended unexpectedly, ticket buyers may find our platform more difficult to use and, as a result, use our platform less.
Our payment processing partner requires us to comply with payment card network operating rules, which are set and interpreted by the payment card networks.
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We are required to reimburse our payment processor for fines assessed by payment card networks if we, or ticket buyers or sellers using our platform, violate these rules, such as our processing of various types of transactions that may be interpreted as a violation of certain payment card network operating rules.
−Removed: Changes to these rules and requirements, or any change in our designation by
−Removed: payment card networks, could require a change in our business operations and could result in limitations on or loss of our ability to accept payment cards, any of which could negatively impact our business.
−Removed: We are also subject to the Payment Card Industry (“PCI”) Data Security Standard, which is a standard designed to protect credit card account data as mandated by payment card industry entities.
+Added: Changes to these rules and requirements, or any change in our designation by payment card networks, could require a change in our business operations and result in limitations on or loss of our ability to accept payment cards, any of which could negatively impact our business.
+Added: We are also subject to the Payment Card Industry (“PCI”) Data Security Standard, which is designed to protect credit card account data as mandated by payment card industry entities.
We rely on vendors to handle PCI matters and to ensure PCI compliance.
−Removed: Despite our compliance efforts, we may become subject to claims that we have violated the PCI Data Security Standard based on past, present, and future business practices.
−Removed: Our actual or perceived failure to comply with the PCI Data Security Standard can subject us to fines, termination of banking relationships, and increased transaction fees.
+Added: Despite our compliance efforts, we may become subject to claims that we have violated the PCI Data Security Standard based on past, present and/or future business practices.
+Added: Our actual or perceived failure to comply with the PCI Data Security Standard could subject us to fines, termination of banking relationships and increased transaction fees.
Under current credit, debit and payment card practices and network rules, we are liable for fraudulent activity on the majority of our credit and debit card transactions.
−Removed: We are also exposed to financial crime risk, and do not currently carry insurance against this risk.
−Removed: Additionally, while we deploy sophisticated technology to detect fraudulent purchase activity, we may incur losses if we fail to prevent the use of fraudulent payment information on transactions in the future.
−Removed: Fraud schemes are becoming increasingly sophisticated and common, and our ability to detect and combat fraudulent schemes may be negatively impacted by the adoption of new payment methods and new technology platforms.
−Removed: If we or this provider fail to identify fraudulent activity or are unable to effectively combat the use of fraudulent payments on our platform or if we otherwise experience increased levels of disputed credit card payments or transactions, our results of operations and financial positions could be materially adversely affected.
−Removed: In addition, our failure to adequately mitigate this risk could damage our reputation and brand and substantially harm our business, results of operations, financial condition, prospects and our ability to accept payments.
+Added: We are also exposed to financial crime risk, against which we do not currently carry insurance.
+Added: Additionally, while we deploy sophisticated technology to detect fraudulent purchase activity, we may incur losses if we fail to prevent the use of fraudulent payment information on transactions.
+Added: Fraud schemes are becoming increasingly sophisticated and common, and our ability to detect and combat fraudulent schemes may be negatively impacted by the adoption of new payment methods and technology platforms.
+Added: If we or our payment processing provider fail to identify fraudulent activity or are unable to effectively combat the use of fraudulent payments on our platform, or if we otherwise experience increased levels of disputed credit card payments or transactions, our business, financial condition and results of operations could be adversely affected.
+Added: In addition, our failure to adequately mitigate this risk could adversely affect our business, financial condition and results of operations, as well as our brand, reputation and ability to accept payments.
Payment card networks and our payment processing partner could increase the fees or interchange they charge us for their services or to accept or process transactions, which would increase our operating costs and reduce our margins.
−Removed: Any such increase in fees could harm our business, results of operations and financial condition.
−Removed: Finally, applicable laws and regulations that govern payment methods and processing are complex and subject to change;
−Removed: and we may be required to expend considerable time and effort to determine if such laws and regulations apply to our business.
−Removed: There can be no assurance that we will be able to meet all compliance obligations, including obtaining any required licenses in the jurisdictions we service, and, even if we were able to do so, there could be substantial costs and potential product changes involved in complying with such laws, which could have a material and adverse effect on our business.
−Removed: Any noncompliance by us in relation to existing or new laws and regulations, or any alleged noncompliance, could result in reputational damage, litigation, increased costs or liabilities, damages, or require us to stop offering payment services in certain markets.
−Removed: Failure to predict how a law or regulation from any jurisdiction in which we operate with respect to money transmission, prepaid access or similar requirements will be applied to us could result in licensure or registration requirements, administrative enforcement actions, and/or could materially interfere with our ability to offer certain payment methods or to conduct our business in particular jurisdictions.
−Removed: We cannot predict what actions the United States or other governments may take, or what restrictions these governments may impose, that will affect our ability to process payments or to conduct our business in particular jurisdictions.
−Removed: Further, we may become subject to changing payment regulations and requirements that could potentially affect the compliance of our current payment processes and increase the operational costs we incur to support payments.
−Removed: The factors identified here could impose substantial additional costs, involve considerable delay to the development or provision of our solutions, require significant and costly operational changes, or prevent us from providing our solutions in any given market.
−Removed: Risks Relating to Our Indebtedness
−Removed: We are a party to debt agreements that could restrict our operations and impair our financial condition.
−Removed: The agreements governing our indebtedness will impose restrictions on us that limit the discretion of management in operating our business and that, in turn, could impair our ability to meet our obligations under our debt.
−Removed: The agreement governing our credit facility include restrictive covenants that, among other things, restrict our ability to:
+Added: Any such increase in fees could adversely affect our business, financial condition and results of operations.
+Added: Finally, the laws and regulations that govern payment methods and processing are complex and subject to change, and we may be required to expend considerable time and effort to determine the applicability of such laws and regulations.
+Added: There can be no assurance that we will be able to meet all compliance obligations, including obtaining any required licenses in the jurisdictions we service, and, even if we are able to do so, there could be substantial costs and potential product changes involved in complying with such laws, which could adversely affect our business.
+Added: Any actual or alleged noncompliance by us in relation to existing or new laws and regulations could result in reputational damage, litigation, increased costs or liabilities, damages or require us to stop offering payment services in certain markets.
+Added: Failure to predict how a given law or regulation with respect to money transmission, prepaid access or similar requirements will be applied to us could result in licensure or registration requirements, administrative enforcement actions and/or materially interfere with our ability to offer certain payment methods or to conduct our business in particular jurisdictions.
+Added: We cannot predict what actions the U.S.
+Added: or other governments may take, or what restrictions they may impose, that will affect our ability to process payments or to conduct our business in particular jurisdictions.
+Added: Further, we may become subject to changing payment regulations and requirements that could affect the compliance of our current payment processes and increase the operational costs we incur to support payments.
+Added: The foregoing could impose substantial additional costs, involve considerable delay to the development or provision of our solutions, require significant and costly operational changes or prevent us from providing our solutions in any given market.
+Added: Risks Related to Our Indebtedness
+Added: Our debt agreements impose restrictions that limit management’s discretion in operating our business and, in turn, could impair our ability to meet our debt obligations.
+Added: The agreement governing our credit facility includes restrictive covenants that, among other things, restrict our ability to:
incur additional debt;
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amend our organizational documents;
−Removed: merge or consolidate.
−Removed: Our failure to comply with the terms and covenants of our indebtedness could lead to a default under the terms of the governing documents, which would entitle the lender to accelerate the indebtedness and declare all amounts owed due and payable.
+Added: and merge or consolidate.
+Added: Our failure to comply with the terms of our indebtedness could lead to a default thereunder, which would entitle the lender(s) to accelerate the indebtedness and declare all amounts owed due and payable.
As of December 31, 2023, our total indebtedness, excluding unamortized debt discounts and debt issuance costs, was $273.1 million.
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We incur higher interest costs if interest rates increase.
−Removed: Interest rates were at historic lows during 2020 and 2021 when the United States Federal Reserve took several steps to protect the economy from the impact of the COVID-19 pandemic.
−Removed: The United States Federal Reserve raised interest rates by more than 400 basis points in 2022, 25 basis points already in 2023, and may continue to increase interest rates further during the remainder of 2023.
−Removed: Any such increase in interest costs could have a material adverse impact on the levels of cash we maintain for working capital.
−Removed: Our current level of indebtedness and any future increases in our debt indebtedness could have adverse consequences, including:
+Added: Interest rates were at historic lows during 2021 when the U.S.
+Added: Federal Reserve took several steps to protect the economy from the impact of the COVID-19 pandemic.
+Added: However, the U.S.
+Added: Federal Reserve raised interest rates by more than 400 basis points in 2022 and 100 basis points in 2023, and it may continue to increase interest rates in the future.
+Added: Any such increase in interest costs could adversely affect our financial condition.
+Added: Our current level of indebtedness and any future increases in our indebtedness could have adverse consequences, including:
making it more difficult for us to satisfy our obligations;
2 unchanged sentences
requiring us to dedicate a substantial portion of our cash flow from operations to fund payments on our debt, thereby reducing funds available for operations and other purposes;
−Removed: limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
+Added: limiting our flexibility in planning for, or reacting to, changes in our business and industry;
making us more vulnerable to increases in interest rates;
−Removed: placing us at a competitive disadvantage compared to our competitors that have less debt.
+Added: and placing us at a competitive disadvantage compared to our competitors that have less debt.
We depend on the cash flows of our subsidiaries in order to satisfy our obligations.
We rely on distributions and/or loans from our subsidiaries to meet our payment requirements under our obligations.
−Removed: If our subsidiaries are unable to pay dividends or otherwise make payments to us, we may not be able to make debt service payments on our obligations.
−Removed: Subject to certain exceptions, each of our subsidiaries guarantees
−Removed: our indebtedness under our credit facility.
+Added: If our subsidiaries are unable to pay dividends or otherwise make payments to us, we may be unable to make debt service payments on our obligations.
+Added: Subject to certain exceptions, each of our subsidiaries is a guarantor under our credit facility.
We conduct substantially all of our operations through our subsidiaries.
−Removed: Our operating cash flows and consequently our ability to service our debt is therefore principally dependent upon our subsidiaries’
−Removed: earnings and their distributions of those earnings to us and may also be dependent upon loans or other payments of funds to us by those subsidiaries.
−Removed: In addition, the ability of our subsidiaries to provide funds to us may be subject to restrictions under our credit facility and may be subject to the terms of such subsidiaries’
−Removed: future indebtedness, as well as the availability of sufficient surplus funds under applicable law.
−Removed: We may face liquidity constraints if we are unable to generate sufficient cash flows and we may be unable to raise additional capital when necessary or desirable.
+Added: Our operating cash flows and consequently our ability to service our debt is therefore principally dependent upon our subsidiaries’ earnings and their distributions of those earnings to us and may also be dependent upon loans or other payments of funds to us by those subsidiaries.
+Added: In addition, the ability of our subsidiaries to provide funds to us may be subject to restrictions under our credit facility and may be subject to the terms of such subsidiaries’ future indebtedness, as well as the availability of sufficient surplus funds under applicable law.
+Added: We may face liquidity constraints if we are unable to generate sufficient cash flows and/or to raise additional capital when necessary or desirable.
As of December 31, 2023, we had cash and cash equivalents of $125.5 million, which is available to us to fund our operating, investing and financing activities.
−Removed: We cannot assure you that our business will generate sufficient cash flow from operations, or that we will be able to obtain financing, in an amount sufficient to fund our operations or other liquidity needs.
−Removed: In the future, we may need to raise additional funds, and we may not be able to obtain additional debt or equity financing on favorable terms, if at all.
+Added: There can be no assurance that our business will generate sufficient cash flow from operations, or that we will be able to obtain financing, in an amount sufficient to fund our operations or other liquidity needs.
+Added: In the future, we may need to raise additional funds, and we may be unable to obtain additional debt or equity financing on favorable terms, if at all.
Our ability to obtain financing will depend on a number of factors, including:
−Removed: general economic and capital market conditions, including as a result of the COVID-19 pandemic and rising inflation;
+Added: general economic and capital market conditions, including inflationary concerns;
the availability of credit from banks or other lenders;
investor confidence in us;
−Removed: our results of operations.
−Removed: If we raise additional equity financing, our security holders may experience significant dilution of their ownership interests, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
−Removed: If we need additional capital and cannot raise it on acceptable terms, if at all, we may not be able to, among other things:
+Added: and our results of operations.
+Added: If we raise additional equity financing, it will result in dilution to our stockholders, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
+Added: If we need additional capital and cannot raise it on acceptable terms, if at all, we may be unable to, among other things:
further develop and enhance our platform and solutions;
continue to invest in our technology and marketing efforts;
−Removed: hire, train and retain employees;
+Added: attract, hire, develop, motivate and retain employees;
respond to competitive pressures or unanticipated working capital requirements;
−Removed: pursue acquisition opportunities.
−Removed: Our inability to do any of the foregoing could reduce our ability to compete successfully and could have an adverse effect on our business.
−Removed: Risks Related to Organizational Structure
−Removed: GTCR Fund XI/B LP, GTCR Fund XI/C LP, GTCR, Co-Invest XI LP, GTCR Golder Rauner, L.L.C., GTCR Golder Rauner II, L.L.C., GTCR Management, XI LLC and GTCR LLC (collectively, “Private Equity Owner”) control us, and its interests may conflict with ours or yours in the future.
−Removed: Hoya Topco, LLC (“Hoya Topco”), which is controlled by our Private Equity Owner and its affiliates, controls approximately 60% of the voting power of our outstanding common stock, which means that, based on its percentage of voting power controlled, our Private Equity Owner controls the vote of all matters submitted to a vote of our shareholders.
−Removed: Thus, our Private Equity Owner controls the election of the members of our Board of Directors subject to the terms of the Stockholders’
−Removed: Agreement dated October 18, 2021 we entered into with Hoya Topco
−Removed: (“Stockholders’
−Removed: Agreement”) and all other corporate decisions.
−Removed: Even when our Private Equity Owner ceases to control a majority of the total voting power, for so long as our Private Equity Owner continues to own a significant percentage of our common stock, our Private Equity Owner will still be able to significantly influence the composition of our Board of Directors and the approval of actions requiring shareholder approval.
−Removed: Accordingly, for such period of time, our Private Equity Owner has significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers, decisions on whether to raise future capital and amending our charter and bylaws, which govern the rights attached to our common stock.
−Removed: In particular, for so long as our Private Equity Owner continues to own a significant percentage of our common stock, our Private Equity Owner will be able to cause or prevent a change of control or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of us.
−Removed: The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of our Class A common stock as part of a potential sale and ultimately might affect the market price of our Class A common stock.
−Removed: Our Stockholders’
−Removed: Agreement provides our Private Equity Owner the right to nominate to our Board of Directors (i) five (5) directors, so long as our Private Equity Owner, in the aggregate, beneficially owns at least 24% of the aggregate number of shares of our common stock, of which at least one (1) will qualify as an “independent director”
−Removed: under applicable stock exchange regulations, (ii) four (4) directors, so long as our Private Equity Owner, in the aggregate, beneficially owns at least 18% but less than 24% of our common stock, (iii) three (3) directors, so long as our Private Equity Owner, in the aggregate, beneficially owns at least 12% but less than 18% of our common stock, (iv) two (2) directors, so long as our Private Equity Owner, in the aggregate, beneficially owns at least 6% but less than 12% of our common stock and (v) until the date our Private Equity Owner, in the aggregate, beneficially owns a number of voting shares representing less than five percent (5%) of the aggregate number of shares of our common stock held, directly or indirectly, by our Private Equity Owner, one (1) director.
−Removed: Pursuant to the foregoing provisions of the Stockholders' Agreement, our Private Equity Owner will be able to designate the majority of the members of our Board of Directors and generally have control over our business and affairs.
+Added: or pursue acquisition opportunities.
+Added: Our inability to do any of the foregoing could reduce our ability to compete successfully and adversely affect our business.
+Added: Risks Related to Our Organizational Structure and the Ownership of Our Securities
+Added: Our Private Equity Owner exerts significant influence over us, and its interests may conflict with ours or yours.
+Added: Hoya Topco, which is controlled by GTCR Fund XI/B LP, GTCR Fund XI/C LP, GTCR, Co-Invest XI LP, GTCR Golder Rauner, L.L.C., GTCR Golder Rauner II, L.L.C., GTCR Management, XI LLC and GTCR LLC (collectively, our “Private Equity Owner”) and its affiliates, controls approximately 36% of the voting power of our outstanding common stock.
+Added: Even though we are no longer a “controlled company” within the meaning of the corporate governance standards of Nasdaq, for so long as our Private Equity Owner continues to own a significant percentage of our common stock, it will be able to significantly influence the composition of our Board and the approval of actions requiring stockholder approval.
+Added: Accordingly, for such period of time, our Private Equity Owner has significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers, decisions on whether to raise future capital and the amendment of our organizational documents, which govern the rights attached to our common stock.
+Added: In particular, for so long as our Private Equity Owner continues to own a significant percentage of our common stock, our Private Equity Owner may be able to cause or prevent a change of control or a change in the composition of our Board and could preclude any unsolicited acquisition of us.
+Added: This concentration of ownership could deprive our security holders of an opportunity to receive a premium for our securities as part of a potential sale and, ultimately, might affect the market price of our securities.
+Added: We are party to a Stockholders’ Agreement, dated October 18, 2021 (the “Stockholders’ Agreement”), with Hoya Topco and Horizon Sponsor, which provides our Private Equity Owner the right to nominate to our Board:
+Added: (i) five directors, so long as our Private Equity Owner beneficially owns at least 24% of the aggregate number of shares of our common stock that were issued and outstanding on October 18, 2021 (the “Closing Amount”), of which at least one will qualify as an “independent director” under applicable stock exchange regulations;
+Added: (ii) four directors, so long as our Private Equity Owner beneficially owns at least 18% but less than 24% of the Closing Amount;
+Added: (iii) three directors, so long as our Private Equity Owner beneficially owns at least 12% but less than 18% of the Closing Amount;
+Added: (iv) two directors, so long as our Private Equity Owner beneficially owns at least 6% but less than 12% of our common stock;
+Added: and (v) until the date our Private Equity Owner beneficially owns a number of voting shares representing less than 5% of the aggregate number of shares of our common stock that were held by our Private Equity Owner on October 18, 2021, one director.
+Added: Pursuant to the foregoing provisions, our Private Equity Owner will be able to designate the majority of the members of our Board and generally exert significant influence over our business and affairs.
Our Private Equity Owner and its affiliates engage in a broad spectrum of activities, including investments in our industry generally.
−Removed: In the ordinary course of their business activities, our Private Equity Owner and its affiliates may engage in activities where their interests conflict with our interests or those of our other shareholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours.
−Removed: Our amended and restated charter provides that our Private Equity Owner, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) will not have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.
−Removed: Our Private Equity Owner also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.
−Removed: In addition, our Private Equity Owner may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you or may not prove beneficial.
−Removed: We are a “controlled company”
−Removed: within the meaning of Nasdaq listing standards and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
−Removed: You will not have the same protections afforded to shareholders of companies that are subject to such requirements.
−Removed: We qualify as a “controlled company”
−Removed: within the meaning of the corporate governance standards of Nasdaq.
−Removed: Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company”
−Removed: and may elect not to comply with certain corporate governance requirements, including the requirements that (i) a majority of our Board of Directors consist of independent directors, (ii) we have a Compensation Committee that is composed entirely of independent directors and (iii) director nominees be selected or recommended to our Board of Directors by independent directors.
−Removed: We rely on certain of these exemptions.
−Removed: As a result, we will not have a Compensation Committee consisting entirely of independent directors and our directors will not be nominated or selected solely by independent directors.
−Removed: We may also rely on the other exemptions so long as we qualify as a controlled company.
−Removed: To the extent we rely on any of these exemption, holders of our common stock will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
−Removed: Our Tax Receivable Agreement will require us to make cash payments to Hoya Topco (or other parties that become entitled to rights to payment under our TRA) in respect of certain tax benefits and such payments may be substantial.
−Removed: In certain cases, payments under our TRA may (i) exceed any actual tax benefits or (ii) be accelerated.
−Removed: We are a party to a Tax Receivable Agreement with Hoya Topco, Hoya Intermediate, GTCR Management XI, LLC (“TRA Holder Representative”), and other TRA Holders (as defined in our TRA) dated October 18, 2021 (“TRA”).
−Removed: Pursuant to our TRA, we will generally be required to pay Hoya Topco and the other TRA Holders 85% of the amount of savings, if any, in U.S.
+Added: In the ordinary course of their business activities, our Private Equity Owner and its affiliates may engage in activities where their interests conflict with our interests or those of our other stockholders, such as investing in or advising businesses that compete with certain portions of our business or are our suppliers or customers.
+Added: Our amended and restated charter provides that our Private Equity Owner, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) will not have any duty to refrain from engaging in the same or similar business activities or lines of business in which we operate.
+Added: Our Private Equity Owner also may pursue acquisition opportunities that may be complementary to our business and, as a result, those opportunities may not be available to us.
+Added: In addition, our Private Equity Owner may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to our other security holders or may not prove beneficial.
+Added: While we are no longer a “controlled company,” we may continue to rely on exemptions from certain Nasdaq corporate governance requirements during a one-year transition period.
+Added: On November 3, 2023, we ceased to be a “controlled company” within the meaning of the corporate governance standards of Nasdaq.
+Added: As a result, we became subject to additional Nasdaq corporate governance requirements, including that:
+Added: our Board be composed of a majority of independent directors;
+Added: our Compensation Committee have a formal written charter and be composed entirely of independent directors;
+Added: and our director nominees be selected or recommended for our Board’s selection either by independent directors constituting a majority of our Board’s independent directors in a vote in which only independent directors participate or by a nominating and corporate governance committee comprised entirely of independent directors with a formal written charter.
+Added: We were required
+Added: to have a majority of independent directors on our Compensation and Nominating and Corporate Governance Committees within 90 days of, and we are required to fully comply with these corporate governance requirements by the one-year anniversary of, the date on which we ceased to be a controlled company.
+Added: During the one-year transition period, we may continue to rely on the phase-in schedule permitted by the Nasdaq corporate governance standards.
+Added: As of December 31, 2023, our Board was not composed of a majority of independent directors, and our Compensation and Nominating and Corporate Governance Committees were not composed entirely of independent directors.
+Added: We intend to remain in full compliance with the applicable Nasdaq corporate governance requirements in accordance with the phase-in schedule.
+Added: During the one-year transition period, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
+Added: Further, a change in the composition of our Board and its committees may result in a change in corporate strategy and operation philosophies and result in deviations from our current strategy.
+Added: While we are no longer a controlled company, our Private Equity Owner continues to be able to exert significant influence over us and as of December 31, 2023 had the right to nominate five members of our Board pursuant to the Stockholders’ Agreement.
+Added: The TRA requires us to make cash payments to Hoya Topco in respect of certain tax benefits, which payments may be substantial.
+Added: Pursuant to the TRA, dated October 18, 2021, among us, Hoya Topco, Hoya Intermediate, GTCR Management XI, LLC (the “TRA Holder Representative”) and the other TRA Holders (as defined therein), we will generally be required to pay Hoya Topco and the other TRA Holders 85% of the amount of savings, if any, in U.S.
federal, state, local and foreign taxes that are based on, or measured with respect to, our net income or profits and any interest related thereto that our consolidated subsidiaries realizes, or is deemed to realize, as a result of certain tax attributes, which include:
−Removed: existing tax basis in certain assets of Hoya Intermediate and certain of its subsidiaries, including assets that will be subject to depreciation or amortization, once placed in service;
−Removed: tax basis adjustments resulting from taxable exchanges of common units of Hoya Intermediate (“Intermediate Units”) for Class A common stock acquired by us from a TRA Holder (as defined in our TRA) pursuant to the terms of our LLC Agreement;
−Removed: certain tax attributes of Blocker Corporations (as defined in the LLC Agreement) holding Intermediate Units that are acquired by us pursuant to a reorganization transaction;
−Removed: certain tax benefits realized by us as a result of our merger with Horizon Acquisition Corporation on October 18, 2021;
−Removed: tax deductions in respect of portions of certain payments made under our TRA.
−Removed: Payments under our TRA generally will be based on the tax reporting positions that we determine (in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent).
−Removed: The IRS or another taxing authority may challenge a position we take, and a court may sustain such a challenge.
−Removed: If any tax attributes we initially claimed or utilized are disallowed, the TRA Holders (as defined in our TRA) will not be required to reimburse us for any excess payments that we may have previously made pursuant to our TRA, for example, due to adjustments resulting from examinations by taxing authorities.
−Removed: Rather, any excess payments made to such TRA Holders will reduce any future cash payments we are required to make under our TRA, after the determination of such excess.
−Removed: However, a challenge to any tax attributes we initially claimed or utilized may not arise for a number of years after such payment and such excess cash payment may be greater than the amount of future cash payments that we may be required to make under the terms of our TRA.
−Removed: As a result, there might not be future cash payments against which such excess can be applied and we could be required to make payments under our TRA in excess of our actual savings in respect of the tax attributes.
−Removed: Moreover, our TRA provides that, in certain early termination events, we are required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have been made under our TRA, which would be based on certain assumptions.
−Removed: The lump-sum payment could be material and could materially exceed any actual tax benefits that we realize subsequent to such payment.
−Removed: The amount and timing of any payments under our TRA will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A common stock at the time of an exchange of Intermediate Units by a TRA Holder pursuant to our Second Amended and Restated Limited Liability Agreement dated October 18, 2021 (“LLC Agreement”) and the amount and timing of the recognition of our income for applicable tax purposes.
−Removed: While many of these factors are outside of our control, the aggregate payments we will be required to make under our TRA could be substantial.
−Removed: There can be no assurance that we will be able to finance our obligations under our TRA in a manner that does not adversely affect our working capital and growth requirements.
−Removed: Any payments we make under our TRA will generally reduce our overall cash flow.
+Added: (i) existing tax basis in certain assets of Hoya Intermediate and certain of its subsidiaries, including assets that will be subject to depreciation or amortization, once placed in service;
+Added: (ii) tax basis adjustments resulting from taxable exchanges of common units of Hoya Intermediate (“Intermediate Units”) for shares of our Class A common stock acquired by us from a TRA Holder pursuant to the terms of Hoya Intermediate’s Second Amended and Restated Limited Liability Company Agreement (the “Hoya Intermediate LLC Agreement”);
+Added: (iii) certain tax attributes of Blocker Corporations (as defined in the Hoya Intermediate LLC Agreement) holding Intermediate Units that are acquired by us pursuant to a reorganization transaction;
+Added: (iv) certain tax benefits realized by us as a result of certain U.S.
+Added: federal income tax allocations of taxable income or gain away from us and to other members of Hoya Intermediate, and deductions or losses to us and away from other members of Hoya Intermediate, in each case as a result of the Merger Transaction;
+Added: and (v) tax deductions in respect of portions of certain payments made under the TRA.
+Added: Payments under the TRA generally will be based on the tax reporting positions that we determine (in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent).
+Added: The Internal Revenue Service or another taxing authority may challenge a position we take, and a court may sustain such a challenge.
+Added: If any tax attributes we initially claimed or utilized are disallowed, the TRA Holders will not be required to reimburse us for any excess payments that we may have previously made pursuant to the TRA, for example, due to adjustments resulting from examinations by taxing authorities.
+Added: Rather, any excess payments made to such TRA Holders will reduce any future cash payments we are required to make under the TRA, after the determination of such excess.
+Added: However, a challenge to any tax attributes we initially claimed or utilized may not arise for a number of years after such payment and, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that we may be required to make under the terms of the TRA.
+Added: As a result, there might not be future cash payments against which such excess can be applied and we could be required to make payments under the TRA in excess of our actual savings in respect of the tax attributes.
+Added: Moreover, the TRA provides that, in certain early termination events, we are required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have been made under the TRA, which would be based on certain assumptions.
+Added: The lump-sum payment could be material and/or materially exceed any actual tax benefits that we realize subsequent to such payment.
+Added: The amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of exchanges, the market price of our Class A common stock at the time of an exchange of Intermediate Units by a TRA Holder pursuant to the Hoya Intermediate LLC Agreement and the amount and timing of the recognition of our income for applicable tax purposes.
+Added: While many of these factors are outside of our control, the aggregate payments we will be required to make under the TRA could be substantial.
If we are unable to make timely payments for any reason, the unpaid amounts will be deferred and will accrue interest until paid.
Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach and therefore accelerate payments.
−Removed: Furthermore, our future obligation to make payments could make us a less attractive
−Removed: target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax attributes that may be deemed realized under our TRA.
−Removed: Our only material asset is our direct and indirect interests in Hoya Intermediate, and we are accordingly dependent upon distributions from Hoya Intermediate to pay dividends, taxes and other expenses, including payments we are required to make under our Tax Receivable Agreement.
−Removed: We are a holding company with no material assets other than our direct and indirect ownership of equity interests in Hoya Intermediate, LLC (“Hoya Intermediate”).
+Added: Furthermore, our future obligation to make payments under the TRA could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax attributes that may be deemed realized under the TRA.
+Added: As a holding company, our principal asset is our equity interest in Hoya Intermediate, and we are accordingly dependent upon distributions from Hoya Intermediate to pay dividends, taxes and other expenses, including payments we are required to make under the TRA.
+Added: As a holding company, our principal assets are our direct and indirect ownership of equity interests in Hoya Intermediate.
As such, we do not have any independent means of generating revenue.
−Removed: We intend to cause Hoya Intermediate to make quarterly distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under our TRA, and to pay our corporate and other overhead expenses.
−Removed: To the extent that we need funds, and Hoya Intermediate is restricted from making such distributions under applicable laws or regulations, or is otherwise unable to provide such funds, it could materially and adversely affect our liquidity and financial condition.
−Removed: In certain circumstances, Hoya Intermediate will be required to make distributions to us and Hoya Topco, and the distributions that Hoya Intermediate will be required to make may be substantial.
+Added: We intend to cause Hoya Intermediate to continue making quarterly distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under the TRA, and to pay our corporate and other overhead expenses.
+Added: To the extent that we need funds, and Hoya Intermediate is restricted from making such distributions under applicable laws or regulations, or is otherwise unable to provide such funds, it could adversely affect our financial condition, including liquidity.
+Added: In certain circumstances, Hoya Intermediate will be required to make distributions to us and Hoya Topco, which distributions may be substantial.
Hoya Intermediate is treated, and will continue to be treated, as a partnership for U.S.
2 unchanged sentences
Instead, its taxable income is generally allocated to its members, including us.
−Removed: Hoya Intermediate may make cash or tax distributions to the members, including us, as set forth in its LLC Agreement calculated using an assumed tax rate, to provide liquidity to members to pay taxes on such member’s allocable share of the taxable income.
+Added: Hoya Intermediate may make cash or tax distributions to the members, including us, as set forth in the Hoya Intermediate LLC Agreement calculated using an assumed tax rate, to provide liquidity to members to pay taxes on such member’s allocable share of the taxable income.
Under applicable tax rules, Hoya Intermediate may be required to allocate net taxable income disproportionately to its members in certain circumstances.
Because tax distributions are made pro rata on a per-common unit basis to all members and such tax distributions are determined based on the member with the highest assumed tax liability per common unit, Hoya Intermediate may be required to make tax distributions that, in the aggregate, exceed the amount of taxes that Hoya Intermediate would have paid if it were taxed on its net income at the assumed rate.
−Removed: As a result of (i) potential differences in the amount of net taxable income allocable to us and to Hoya Topco, (ii) the lower maximum tax rate applicable to corporations than individuals and (iii) the use of an assumed tax rate in calculating Hoya Intermediate’s distribution obligations, we may receive distributions significantly in excess of our actual tax liabilities and our obligations to make payments under our TRA.
+Added: As a result of (i) potential differences in the amount of net taxable income allocable to us and to Hoya Topco, (ii) the lower maximum tax rate applicable to corporations than individuals and (iii) the use of an assumed tax rate in calculating Hoya Intermediate’s distribution obligations, we may receive distributions significantly in excess of our actual tax liabilities and our obligations to make payments under the TRA.
If we do not distribute such cash balances as dividends on our Class A common stock and instead, for example, hold such cash balances or lend them to Hoya Intermediate, Hoya Topco would benefit from any value attributable to such accumulated cash balances as a result of its right to acquire shares of our Class A common stock or, at our election, an amount of cash equal to the fair market value thereof, in exchange for its Intermediate Units.
−Removed: We will have no obligation to distribute such cash balances to our shareholders, and no adjustments will be made to the consideration provided to an exchanging holder in connection with a direct exchange or redemption of Hoya Intermediate limited liability company interests under our LLC Agreement as a result of any retention of cash by us.
−Removed: Risks Relating to the COVID-19 Pandemic
−Removed: The global COVID-19 pandemic has had, and may continue to have, a material negative impact on our business and operating results.
−Removed: Beginning in the second quarter of 2021, and continuing through the fourth quarter of 2022, we have seen a recovery in ticket orders as mitigation measures ease.
−Removed: However, given the emergence of new variants and continued infectious cases, uncertainty remains.
−Removed: The global spread and impact of the COVID-19 pandemic has been complex, unpredictable, and evolving.
−Removed: It resulted in significant disruption and additional risks to our business, the entertainment industry, and the global economy particularly in 2020 and 2021.
−Removed: The COVID-19 pandemic led governments and other authorities around the world to impose measures intended to control its spread, including travel bans, border closings and restrictions, business closures, quarantines and vaccine requirements.
−Removed: In mid-March 2020, as the unprecedented impact of the global COVID-19 pandemic became clearer, concert promoters, venue operators, sports leagues and theaters around the world shut down.
−Removed: Different jurisdictions lifted restrictions on gatherings of people at different times and may continue to have different rules in place in the future.
−Removed: While events are now, by and large, held at pre-pandemic scope and scale, it is difficult to predict whether restrictions could be put into place again in the future if a worsening variant emerges.
−Removed: Our business depends on concert, sporting and theater events in order to generate most of our revenue from ticket sales in the secondary ticket market.
−Removed: During the COVID-19 pandemic, fewer concert, sporting and theater events as well as lower fan attendance had a negative impact on our revenue.
−Removed: Since the COVID-19 pandemic remains a public health concern as of December 31, 2022, it is possible these circumstances could re-emerge and once again threaten the live events industry and have a negative impact on our revenue.
−Removed: We face ancillary risks and uncertainties arising from the global COVID-19 pandemic in addition to the possible shutdown or limitation of concert, sporting and theater events.
−Removed: COVID-19, and its variants, may also precipitate or aggravate other risk factors, which have had, and may continue to have, a material negative impact on our business and operating results.
−Removed: Many of these risks and uncertainties may extend beyond the duration of current pandemic conditions due to the uncertainty around how concert, sporting and theater industries may change going forward as a result of the pandemic.
−Removed: Such additional or attendant risks and uncertainties include, among other things:
−Removed: the impact of any lingering economic downturn or recession including, without limitation, any reduction in discretionary spending or confidence for both buyers and sellers, that would result in a decline in ticket sales and attendance;
−Removed: a reduction in the profitability of our operations due to governmental restrictions or safety precautions and protocols voluntarily undertaken, such as venues running under capacity due to spacing and social distancing limitations, which could limit the number of tickets sold;
−Removed: increase in performer cancellations because of illness;
−Removed: loss of ticketing sales due to the economic impact whereby certain venue operators are no longer in operation, reducing the number of events our marketplace can serve;
−Removed: the inability to pursue expansion opportunities or acquisitions due to capital constraints;
−Removed: increase in the prevalence of electronic tickets which could be rendered nontransferable;
−Removed: the future availability or increased cost of insurance coverage;
−Removed: the incurrence of additional expenses related to compliance, precautions and management.
−Removed: The likelihood of the realization or intensification of these risks and uncertainties and the ultimate magnitude of their impact on us are not knowable or quantifiable at this time.
−Removed: The global COVID-19 pandemic and its impacts may continue to endure for an unknown period of time.
−Removed: New COVID-19 variants have and may continue to emerge, which could lead to new restrictions being put into place again.
−Removed: The longer the duration of the global COVID-19 pandemic, the greater the ancillary and lingering effects, and related negative impact on us and our results of operations.
+Added: We will have no obligation to distribute such cash balances to our stockholders, and no adjustments will be made to the consideration provided to an exchanging holder in connection with a direct exchange or redemption of Hoya Intermediate limited liability company interests under the Hoya Intermediate LLC Agreement as a result of any retention of cash by us.
Risks Related to Being a Public Company
1 unchanged sentence
Securities markets worldwide experience significant price and volume fluctuations.
−Removed: This market volatility, as well as general economic, market or political conditions, could reduce the market price of our Class A common stock and warrants in spite of our operating performance.
−Removed: We cannot assure you that the market price of our Class A common stock and warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:
−Removed: the realization of any of these risk factors;
+Added: This market volatility, as well as general economic, market or political conditions, could reduce the market price of our securities in spite of our operating performance.
+Added: We cannot assure you that the market price of our securities will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others:
+Added: the realization of any of the risk factors discussed in this Report;
difficult global market and economic conditions;
loss of investor confidence in the global financial markets and investing in general;
−Removed: adverse market reaction to indebtedness we may incur, securities we may grant under our 2021 Incentive Award Plan or otherwise, or any other securities we may issue in the future, including shares of our Class A common stock;
−Removed: adverse market reaction to changes in our ownership or capital structure including a secondary offering for our Class A common stock;
+Added: adverse market reaction to indebtedness we may incur or securities we may issue in the future, including securities we may grant under our 2021 Incentive Award Plan, as amended (the "2021 Plan");
+Added: adverse market reaction to changes in our ownership or capital structure, including secondary offerings of our Class A common stock;
unanticipated variations in our quarterly and annual operating results or dividends;
−Removed: failure to meet securities analysts’
−Removed: earnings estimates;
−Removed: publication of negative or inaccurate research reports about us or the live events or ticketing industry or the failure of securities analysts to provide adequate coverage of our Class A common stock in the future;
+Added: failure to meet securities analysts’ earnings estimates;
+Added: publication of negative or inaccurate research reports about us or the live events or ticketing industries or the failure of securities analysts to provide adequate coverage of us or our securities in the future;
changes in market valuations of similar companies;
1 unchanged sentence
the trading activity of our largest stockholders;
−Removed: the number of shares of our common stock that are available for public trading;
−Removed: short sales, hedging and other derivative transactions involving our capital stock;
−Removed: additional or unexpected changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters;
−Removed: increases in compliance or enforcement inquiries and investigations by regulatory authorities.
−Removed: We may be subject to securities class action litigation, which may harm our business, financial condition and results of operations.
−Removed: Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
+Added: the number of shares of our Class A common stock that are available for public trading;
+Added: short sales, hedging and other derivative transactions involving our securities;
+Added: new or unexpected changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters;
+Added: and increases in compliance or enforcement inquiries and investigations by regulatory authorities.
+Added: We may be subject to securities class action litigation, which could adversely affect our business, financial condition and results of operations.
+Added: Companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation.
We may be the target of this type of litigation in the future.
−Removed: Securities litigation against us could result in substantial legal fees, settlement or judgment costs and a diversion of management’s attention and resources that are needed to successfully run our business, which could seriously harm our business, financial condition and results of operations.
−Removed: We continue to have a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
−Removed: We are required to comply with the Securities and Exchange Commission’s (“SEC”) rules implementing Sections 302 and 404 of The Sarbanes-Oxley Act (“SOX”), which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.
−Removed: Effective internal control over financial reporting is necessary for us to provide reliable and timely financial reports and, together with adequate disclosure controls and procedures, are designed to reasonably detect and prevent fraud.
+Added: Securities litigation against us could result in substantial legal fees, settlement or judgment costs, as well as a diversion of management’s attention and resources that are needed to successfully run our business, which could adversely affect our business, financial condition and results of operations.
+Added: We have a material weakness in our internal control over financial reporting, and we may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
+Added: We are required to comply with SEC rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act of 2002 (“SOX”), which require management to certify financial and other information in our annual and quarterly reports and provide an annual management report on the effectiveness of our internal control over financial reporting.
+Added: Effective internal control over financial reporting is necessary for us to provide reliable and timely financial reports and, together with adequate disclosure controls and procedures, is designed to reasonably detect and prevent fraud.
+Added: However, internal control over financial reporting may not detect and prevent all misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls or fraud.
+Added: Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
We are also required to report any material weaknesses in such internal control.
2 unchanged sentences
We made the same determination in connection with the audits of our financial statements for the fiscal years ended December 31, 2023, 2022 and 2021.
−Removed: We determined in all three years that we had deficiencies related to implementation of segregation of duties as part of our control activities, establishment of clearly defined roles within our finance and accounting functions and the number of personnel in our finance and accounting functions with an appropriate level of technical accounting and SEC reporting experience, which in the aggregate, constitute a material weakness.
−Removed: As part of our plan to address this material weakness, we are performing a full review of our internal control procedures.
−Removed: We have implemented, and plan to continue to implement, new controls and processes.
−Removed: We have hired, and plan to continue to hire, additional qualified personnel and establish more robust processes to support our internal control over financial reporting, including clearly defined roles and responsibilities and appropriate segregation of duties.
−Removed: While we have begun implementing a plan to remediate this material weakness, we cannot predict the success of such plan or the outcome of our assessment of this plan at this time.
−Removed: If our steps are insufficient to successfully remediate the material weakness and otherwise establish and maintain an effective system of internal control over financial reporting, the reliability of our financial reporting, investor confidence in us, and the value of our common stock could be materially and adversely affected.
−Removed: We can give no assurance that this implementation will remediate this deficiency in internal control or that additional material weaknesses in our internal control over financial reporting will not be identified in the future.
−Removed: Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements or cause us to fail to meet our periodic reporting obligations.
−Removed: For as long as we are an “emerging growth company”
−Removed: under The Jumpstart Our Business Startup Act (“JOBS Act”), our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404.
−Removed: We could be an “emerging growth company”
−Removed: until December 31, 2026.
−Removed: Once we no longer qualify as an “emerging growth company,”
−Removed: we will be required to have our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting.
−Removed: An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management’s assessment might not.
+Added: We determined in all of these years that we had deficiencies related to the
+Added: implementation of segregation of duties as part of our control activities, the establishment of clearly defined roles within our finance and accounting functions and the number of personnel in those functions with an appropriate level of technical accounting and SEC reporting experience which, in the aggregate, constitute a material weakness.
+Added: We are continuing to review our internal control procedures, to implement new controls and processes, to hire additional qualified personnel and to establish more robust processes to support our internal control over financial reporting, including by creating clearly defined roles and responsibilities and the appropriate segregation of duties.
+Added: These actions have begun to be validated through testing and, when fully implemented, we believe they will be effective in remediating the material weakness.
+Added: However, additional time is required to complete implementing the enhanced procedures and to test and ensure the effectiveness and sustainability of the improved controls.
+Added: If we are unable to successfully remediate the material weakness and otherwise establish and maintain an effective system of internal control over financial reporting, it could result in errors in our financial statements that require a restatement or cause us to fail to meet our periodic reporting obligations, any of which could adversely affect investor confidence in us and the value of our securities.
+Added: There can be no assurance that our remediation activities will be successful or that additional material weaknesses will not be identified in the future.
+Added: For as long as we are an “emerging growth company” under the Jumpstart Our Business Startup Act of 2012 (the “JOBS Act”), which could be until December 31, 2026, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of SOX.
+Added: Once we are no longer an emerging growth company, we will be required to have our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting.
+Added: This independent assessment could detect problems that our management’s assessment might not.
Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.
An adverse report may be issued if our independent registered public accounting firm is not satisfied with the level at which our controls are documented, designed or operating.
−Removed: The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from our business operations.
−Removed: As a public company, we are subject to the reporting requirements of the Exchange Act of 1934, as amended (“Exchange Act”) and SOX.
−Removed: The Exchange Act requires the filing of annual, quarterly and current reports with respect to a public company’s business and financial condition.
−Removed: SOX requires, among other things, that a public company establish and maintain effective internal control over financial reporting.
−Removed: As a result, we will incur significant legal, accounting and other expenses that we did not incur as a private company.
−Removed: Our management team and many of our other employees will need to devote substantial time to compliance and may not effectively or efficiently manage our transition into a public company.
−Removed: These rules and regulations will result in us incurring substantial legal and financial compliance costs and will make some activities more time-consuming and costly.
−Removed: For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we incur substantially higher costs to obtain the same or similar coverage.
−Removed: As a result, it may be difficult for us to attract and retain qualified people to serve on our Board of Directors, our Board Committees or as executive officers.
−Removed: We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to "emerging growth companies" could make our Class A common stock less attractive to investors.
−Removed: We are an "emerging growth company," and, for as long as we continue to be an "emerging growth company," we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,”
+Added: We are an “emerging growth company,” and a decision by us to comply with reduced reporting and disclosure requirements applicable to emerging growth companies could make our securities less attractive to investors.
+Added: We are an “emerging growth company,” and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including:
not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of SOX;
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;
−Removed: exemptions from the requirements of holding a nonbinding advisory vote on executive compensation or golden parachute payments not previously approved.
+Added: and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation or golden parachute payments not previously approved.
Our status as an emerging growth company will end as soon as any of the following occurs:
−Removed: the last day of the fiscal year in which we have more than $1.07 billion in annual revenue;
−Removed: the date we qualify as a “large accelerated filer,”
−Removed: with at least $700 million of equity securities held by non-affiliates;
−Removed: the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities;
−Removed: December 31, 2026.
−Removed: We cannot predict if investors will find our securities less attractive if we choose to rely on any of the exemptions afforded “emerging growth companies.”
+Added: (i) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue;
+Added: (ii) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates;
+Added: (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities;
+Added: or (iv) December 31, 2026.
+Added: We cannot predict if investors will find our securities less attractive if we choose to rely on any of the exemptions afforded to emerging growth companies.
If some investors find our securities less attractive because we rely on any of these exemptions, there may be a less active trading market for our securities and the market price of those securities may be more volatile.
−Removed: Further, the JOBS Act exempts “emerging growth companies”
−Removed: from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (“Securities Act”) 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,”
−Removed: 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”
−Removed: nor a company that has opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.
−Removed: An active trading market for our Class A common stock may not be maintained and an active trading market for our warrants may not develop.
−Removed: Although our Class A common stock is listed on Nasdaq under the symbol “SEAT,”
−Removed: an active trading market for our Class A common stock may not be maintained.
−Removed: A public trading market having the desirable characteristics of depth, liquidity and orderliness depends upon the existence of willing buyers and sellers at any given time, such existence being dependent upon the individual decisions of buyers and sellers.
−Removed: Additionally, we can provide no assurance that an active trading market for our warrants will develop on Nasdaq or any other exchange in the future.
−Removed: If an active market for our securities does not develop or is not maintained, or if we fail to satisfy the continued listing standards of Nasdaq for any reason and our securities are delisted, it may be difficult for our security holders to sell their
−Removed: securities without depressing the market price for the securities or at all.
−Removed: An inactive trading market may also impair our ability to both raise capital by selling shares of capital stock and acquire other complementary products, technologies or businesses by using our shares of capital stock as consideration.
−Removed: Warrants are exercisable for our Class A common stock and Intermediate Units, which will increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
−Removed: The following warrants to purchase our Class A common stock are outstanding and exercisable:
−Removed: warrants to purchase 6,519,791 shares at an exercise price of $11.50 per share;
−Removed: warrants to purchase 17,000,000 shares at an exercise price of $10.00 per share;
−Removed: warrants to purchase 17,000,000 shares at an exercise price of $15.00 per share;
−Removed: public warrants to purchase 6,766,853 shares at an exercise price of $11.50 per share.
−Removed: To the extent such warrants are exercised, additional shares of our Class A common stock will be issued.
−Removed: This will result in dilution to the holders of our Class A common stock and increase the number of shares eligible for resale in the public market.
−Removed: Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Class A common stock.
−Removed: The following warrants to purchase Intermediate Units are outstanding and exercisable are held by Hoya Topco, LLC (collectively, “Hoya Intermediate Warrants”):
−Removed: warrants to purchase 3,000,000 shares at an exercise price of $10.00 per share;
−Removed: warrants to purchase 3,000,000 shares at an exercise price of $15.00 per share.
−Removed: Upon exercise of a Hoya Intermediate Warrant, one share of our Class B common stock will also be issued.
−Removed: Holders of Intermediate Units (other than us and our subsidiaries) may exchange them for shares of our Class A common stock.
−Removed: Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Class A common stock.
−Removed: Our management also holds options to purchase shares of our Class A common stock.
−Removed: To the extent such options are exercised, additional shares of our Class A common stock will be issued.
−Removed: This will result in dilution to the holders of our Class A common stock and increase the number of shares eligible for resale in the public market.
−Removed: Sales of substantial numbers of such shares in the public market or the fact that such options may be exercised could adversely affect the market price of our Class A common stock.
−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.
−Removed: The trading market for our securities will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business.
−Removed: We will not control these analysts, and the analysts who publish information about us may have relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
−Removed: If any current or future analysts who cover us provide inaccurate research or issue an adverse opinion regarding our stock price, our stock price 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: Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third-party.
−Removed: Our amended and restated charter and our amended and restated bylaws contain several provisions that may make it more difficult or expensive for a third-party to acquire control of us without the approval of our Board of Directors.
+Added: Further, the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, companies that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with such standards.
+Added: The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but that any such election to opt out is irrevocable.
+Added: We have elected not to opt out of such extended transition period, which means that when a financial accounting standard is issued or revised and it has different
+Added: application dates for public or private companies, we, as an emerging growth company, can adopt such standard at the same time as private companies.
+Added: This may make comparison of our financial statements with another public company, which is neither an “emerging growth company” nor a company that has opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.
+Added: The exercise of outstanding warrants would increase the number of shares of our Class A common stock eligible for resale in the public market and result in dilution to our stockholders.
+Added: The following warrants to purchase shares of our Class A common stock are outstanding and exercisable:
+Added: (i) warrants to purchase 6,519,791 shares at an exercise price of $11.50 per share;
+Added: (ii) warrants to purchase 17.0 million shares at an exercise price of $10.00 per share;
+Added: (iii) warrants to purchase 17.0 million shares at an exercise price of $15.00 per share;
+Added: and (iv) public warrants to purchase 6,766,853 shares at an exercise price of $11.50 per share.
+Added: In addition, Hoya Topco holds outstanding warrants to purchase 2.0 million Intermediate Units at an exercise price of $10.00 per unit and warrants to purchase 2.0 million Intermediate Units at an exercise price of $15.00 per unit (collectively, the “Hoya Intermediate Warrants”).
+Added: Upon the exercise of a Hoya Intermediate Warrant, one share of our Class B common stock (which is generally exchangeable for one share of our Class A common stock) will be issued.
+Added: The issuance of shares of our Class A common stock in connection with the exercise of these warrants would increase the number of shares eligible for resale in the public market and result in dilution to our stockholders.
+Added: Sales of substantial numbers of such shares in the public market, or the fact that these warrants may be exercised, could adversely affect the market price of our Class A common stock.
+Added: Securities analysts may not publish favorable, or any, research or reports about us, which could adversely affect the market price or trading volume of our securities.
+Added: The trading market for our securities will be influenced to some extent by the research and reports that industry or financial analysts publish about us.
+Added: We do not control these analysts, and the analysts who publish information about us may have relatively little experience with our business or industry, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates.
+Added: If analysts provide inaccurate research or issue adverse opinions regarding us or our securities, or cease coverage of or fail to regularly publish reports regarding us or our securities, we could lose visibility in the market, which in turn could adversely affect the market price or trading volume of our securities.
+Added: Provisions in our organizational documents may delay or prevent our acquisition by a third party.
+Added: Our amended and restated charter and our amended and restated bylaws contain several provisions that may make it more difficult or expensive for a third-party to acquire control of us without the approval of our Board.
These provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that stockholders may consider favorable, include the following:
−Removed: the sole ability of directors to fill a vacancy on the Board of Directors;
+Added: the sole ability of directors to fill a vacancy on our Board;
advance notice requirements for stockholder proposals and director nominations;
−Removed: after we no longer qualify as a "controlled company" under applicable Nasdaq listing rules, provisions limiting stockholders' ability to (i) call special meetings of stockholders, (ii) require extraordinary general meetings of stockholders and (iii) take action by written consent;
−Removed: the ability of the Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our governing body;
−Removed: the division of the Board of Directors into three classes, with each class serving staggered three-year terms;
−Removed: the lack of cumulative voting for the election of directors.
−Removed: These provisions of our amended and restated charter and our amended and restated bylaws could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of our Class A common stock in the future, which could reduce the market price of our Class A common stock.
−Removed: The provisions of our amended and restated charter requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
−Removed: Our amended and restated charter provides that, to the fullest extent permitted by law, and unless we provide consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporate Laws (“DGCL”), our amended and restated charter or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine, provided that this provision, including for any “derivative action,”
−Removed: will not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
−Removed: Our amended and restated charter will further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
−Removed: By becoming our stockholder, you will be deemed to have notice of and consented to the exclusive forum provisions of our amended and restated charter.
+Added: provisions limiting stockholders’ ability to call special meetings of stockholders, require extraordinary general meetings of stockholders and take action by written consent;
+Added: our Board’s ability to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board;
+Added: the division of our Board into three classes, with each class serving staggered three-year terms;
+Added: and the lack of cumulative voting for the election of directors.
+Added: These provisions could discourage potential takeover attempts and reduce the price that investors are willing to pay for our securities.
+Added: The exclusive forum provisions of our amended and restated charter may discourage lawsuits against our directors and officers.
+Added: Our amended and restated charter provides that, to the fullest extent permitted by law, and unless we provide consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that such Court of Chancery does not have jurisdiction, the U.S.
+Added: federal district court for the District of Delaware or the other state courts of the State of Delaware) is the sole and exclusive forum for any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder to us or our stockholders, (iii) action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our amended and restated charter or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) action asserting a claim governed by the internal affairs doctrine, provided that this provision, including for any “derivative action,” does not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the U.S.
+Added: federal courts have exclusive jurisdiction.
+Added: Our amended and restated charter further provides that the U.S.
+Added: federal district courts are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
+Added: By becoming our stockholder, you will be deemed to have notice of and consented to these exclusive forum provisions.
There is uncertainty as to whether a court would enforce such a provision relating to causes of action arising under the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
−Removed: 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’
−Removed: 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 amended and restated charter to be inapplicable or unenforceable in such action.
−Removed: Unresolved Staff Comments
−Removed: As of December 31, 2022, we leased approximately 48,000 square feet of space in Chicago, Illinois for our headquarters under a lease agreement that runs through December 31, 2033 with a 5-year renewal option, unless terminated sooner.
−Removed: We also lease facilities in Coppell, Texas and Toronto, Ontario.
−Removed: Legal Proceedings
−Removed: Mine Safety Disclosures
−Removed: Not applicable.
+Added: These exclusive forum provisions may have the effect of discouraging lawsuits against our directors and officers.
+Added: The enforceability of similar provisions in other companies’ charters has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find such provisions to be inapplicable or unenforceable in such action.
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.