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Item 1A. Risk Factors

2025-03-12 compared with 2024-03-08 · 436 added, 435 removed, 115 unchanged (88% of the section changed)

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.

The risks discussed below are not the only risks we face.

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.

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.

Set forth below are certain risks that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this Report.

These are not the only risks we face.

Additional risks that are currently unknown or believed not to be material may also impact actual results.

These risks should be carefully considered together with the other information set forth in this Report and our other filings with the SEC.

Risks Related to Our Business and the Live Events and Ticketing Industries

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.

The number of live concert, sporting and theater events depends on a number of factors, many of which are outside of our control.

A reduction in the number or availability of such events will adversely affect our revenue and operating results.

For example, certain sports leagues have experienced labor disputes leading to threatened or actual player lockouts.

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.

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.

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.

Business conditions, as well as various industry conditions, can also impact our operating results, including by affecting premium seat sales.

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.

The impact of economic slowdowns, recessions and uncertainty could result in reduced ticket sales and adversely affect our ability to generate revenue.

We have a limited operating history during economic slowdowns as our marketplace developed subsequent to the last significant financial crisis, which began in 2008.

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.

While demand for live events was strong throughout 2022 and 2023, there can be no assurance that discretionary

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.

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.

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.

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.

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.

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.

We are adversely affected by decreases in the supply of and/or demand for live concert, sporting, and theater events.

The supply of live concert, sporting, and theater events depends on several factors, many of which are outside of our control.

We rely on artists and sports teams to perform and play at live events, and scenarios such as artists deciding to perform less frequently or at smaller venues, sports league lockouts, promoters or event venues failing to correctly anticipate demand for particular events, or negative trends in the entertainment and/or sporting industries that cause a reduction in the number or availability of live events adversely affect our business, financial condition, and results of operations.

Our business also depends on demand for and attendance at live concert, sporting, and theater events, which is affected by, among other things, discretionary consumer and corporate spending.

Many factors impact such spending, including economic conditions ( e.g.

, unemployment levels, interest rates, inflation, and fuel prices), changes in tax rates/laws, public safety concerns, and other extraordinary events.

Reduced discretionary spending, as well as other negative business or industry conditions or trends, can decrease demand for and attendance at live events, as well as reduce ticket sales, which adversely affect our revenue and operating results.

All of these risks may become more acute during periods of economic slowdown, recession, and uncertainty.

For example, the COVID-19 pandemic and related economic slowdown materially and adversely impacted our business, including due to event restrictions and cancellations.

While live events are now generally held at pre-pandemic scope and scale, there can be no assurance that the supply of and/or demand for such events will not be negatively impacted by any future economic slowdown, recession, or uncertainty, which would adversely affect our business, financial condition, and results of operations.

We may be adversely affected by an adverse change in our relationships with ticket buyers, sellers, and/or partners.

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.

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.

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.

There can be no assurance that we will be able to maintain existing or develop new relationships on acceptable terms, or at all, and the failure to do so could adversely affect our business, financial condition, and results of operations.

We may be adversely affected if changes in internet search engine algorithms and dynamics, search engine disintermediation, or mobile application marketplace rules decrease traffic to our websites and mobile applications.

We rely heavily on internet search engines, such as Google, to generate traffic to our websites through a combination of organic and paid searches.

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.

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.

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.

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.

We also rely on application marketplaces, such as Apple’s App Store and Google’s Play, to enable downloads of our mobile applications.

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.

Search engines frequently update and change the logic that determines the placement and display of a user’s search results such that the purchased or algorithmic placement of links to our websites can be negatively affected.

For example, a search engine could, for competitive or other purposes, alter its search algorithms or results in a manner that causes our websites to be placed lower in its organic search query results.

If a major search engine changes its algorithms in a manner that negatively impacts its ranking of our or our partners’ websites, our business, financial condition, and results of operations could be adversely affected.

Further, our failure to successfully manage our search engine optimization could substantially decrease traffic to our websites, as well as increase costs if we were to replace free traffic with paid traffic, which could adversely affect our business, financial condition, and results of operations.

We also rely on mobile application marketplaces, such as Apple’s App Store and Google’s Play Store, to enable downloads of our mobile applications.

Such marketplaces have in the past made, and may in the future make, changes (including to security and privacy policies and requirements) that impede access to our applications or limit the features we can offer.

For example, our applications may receive unfavorable promotion and/or placement treatment compared to those of competing applications, including the order in which they appear within these marketplaces.

Further, our Apple iOS and Google Android applications are an important distribution channel for ticket sales.

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.

Similarly, if problems arise in our relationships with these or other providers of application marketplaces, our user growth could be harmed.

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.

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.

If either marketplace were to charge commissions or fees on our application-based revenue, and we failed to negotiate favorable terms, it could adversely affect our business, financial condition, and results of operations.

Similarly, if problems arise in our relationships with these or other such marketplaces, our user growth could be harmed.

We face intense competition in the ticketing industry, and we may be adversely affected if we are unable to maintain or increase ticket listings and sales on our platform.

We operate in a highly competitive industry and face significant and continuous competition from other national, regional, local, and international primary and secondary ticketing service providers to secure new and retain existing ticket buyers, sellers, and partners.

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.

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:

competitors’ offerings that may include more favorable terms or pricing;

competitors’ increase in marketing spending;

This competition could cause the volume of our ticketing business to decline, which would adversely affect our business, financial condition, and results of operations.

Competitive variables that could lead to a decrease in ticket orders, prices, fees, and/or profit margins, certain of which have adversely affected our past financial performance, include:

offerings from our competitors that include more favorable terms or pricing;

increased marketing spending by our competitors;

consolidation among competitors resulting in their increased market share;

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;

other entertainment options or ticket inventory selections and varieties that we do not offer;

increased pricing in the primary ticket marketplace, which could result in reduced profits for secondary ticket sellers;

primary ticket marketplaces trying to restrict ticket sales by secondary marketplaces;

primary ticket marketplaces successfully restricting secondary ticket sales;

and increased search engine marketing costs as competitors increase bid prices.

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.

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.

Competition within the daily fantasy sports and gaming industry is also significant, and existing and potential Vivid Picks users may choose to use competing daily fantasy sports products for many of the same reasons discussed above.

We may be adversely affected if we do not continue to maintain and improve our platform, or to successfully develop new and improved solutions and enhancements.

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.

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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.

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.

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.

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.

The successful promotion of our brand attributes depends on a number of factors, including many that are outside of our control.

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.

To the extent these activities yield increased revenue, it may not offset the increased expenses we incur.

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.

There are also factors outside of our control that could undermine and/or harm our reputation and brand.

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,

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.

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.

Disease epidemics and pandemics have adversely affected, and may in the future adversely affect, our business, financial condition and results of operations.

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.

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.

An epidemic or pandemic may also precipitate or aggravate other risk factors, which have adversely affected, and may continue to adversely affect, our business.

Such additional or attendant risks include, among others:

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;

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;

an increase in event cancellations;

an inability to pursue expansion opportunities or acquisitions due to capital constraints;

a decrease in the availability, or increase in the cost, of insurance coverage;

and the incurrence of additional expenses related to compliance, precautions and management.

For example, the global COVID-19 pandemic has been complex, unpredictable and evolving.

It resulted in significant disruption and additional risks to our business, the entertainment industry and the global economy in 2020 and 2021.

Developing new and improved solutions and enhancements is costly and complex, and the timetable for commercial release is difficult to predict and may vary from our historical experience.

In addition, after development, ticket buyers, sellers, and partners may not be satisfied with, or may perceive that their needs are not adequately addressed by, our solutions and enhancements.

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, platform integration, user awareness, and overall market acceptance and adoption.

If we do not continue to maintain and improve our platform, or to successfully develop new and improved solutions and enhancements, our business, financial condition, and results of operations could be adversely affected.

We may be adversely affected if we are unable to maintain and enhance our reputation and brand.

Maintaining and enhancing our reputation and brand as a differentiated ticketing marketplace is critical in our ability to retain existing, and attract new, ticket buyers, sellers, and partners.

The successful promotion of our brand requires significant investments of time, money, and effort, which may increase as our marketplace continues to expand and become more competitive.

To the extent these investments yield increased revenue, it may not offset the increased expenses we incur.

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, any of which could adversely affect our business, financial condition, and results of operations.

There are also many factors outside of our control that could undermine and/or harm our reputation and brand.

A negative perception of our marketplace could adversely affect our business, including as a result of:

complaints or negative publicity and our responsiveness thereto;

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;

the timing of refunds and/or payment reversals 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.

If we are unable to maintain a reputable, user-friendly, and effective platform that provides tickets to 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.

We may be adversely affected by extraordinary events, including public safety concerns or disruptions, mass-casualty incidents, acts of civil unrest, terrorist attacks, military actions, disease epidemics or other public health concerns (including any resurgence of the COVID-19 pandemic), natural disasters, and severe weather events.

The occurrence and threat of extraordinary events, including public safety concerns or disruptions, intentional or unintentional mass-casualty incidents, acts of civil unrest, terrorist attacks, military actions, disease epidemics or other public health concerns (and governmental responses thereto), natural disasters, and severe weather events, may deter or prevent artists, sports teams, promoters, or event venues from performing, playing, or operating and substantially decrease the demand for live events.

Because Vegas.com is concentrated in Southern Nevada, which has recently experienced water and electricity shortages, it is particularly exposed to certain of these risks.

The occurrence of extraordinary events has in the past adversely affected, and may in the future adversely affect, our business, financial condition, and results of operations.

Event cancellations related to such events could also adversely affect our financial performance because we may be obligated to issue refunds or credits for previously purchased tickets.

The global COVID-19 pandemic and related economic shutdown resulted in significant disruption to our business, the entertainment and sporting industries, and the global economy in 2020 and 2021.

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.

Many promoters, teams, theaters and facilities around the world shut down in 2020.

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.

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.

Any of these circumstances could again threaten the live events industry and negatively impact our financial condition.

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.

Our strategy has involved, and our future growth rate may continue to depend in part on, our selective acquisition of additional businesses.

During the height of the pandemic, many artists, sports teams, promoters, and event venues around the world ceased performances, games, and operations.

Because we depend on live events in order to generate revenue from ticket sales, the decreased supply of and demand for such events during the pandemic negatively impacted our business and financial condition.

While live events are now generally held at pre-pandemic scope and scale, it is difficult to predict any future outbreaks of disease epidemics (including any resurgence of the COVID-19 pandemic) and whether restrictions could again be imposed.

Any of these circumstances could again adversely affect the live events industry and our business and financial condition.

We may be adversely affected if any of the business acquisitions we have made, or may make in the future, are unsuccessful.

Our strategy has involved, and our future growth may continue to depend in part on, our selective acquisition of complementary businesses.

For example, we acquired Fanxchange Ltd.

(“Fanxchange”) in 2019, Betcha (which we rebranded as Vivid Picks) in 2021, Wavedash in September 2023 and Vegas.com in November 2023.

However, we may be unable in the future to identify other suitable acquisition targets or make acquisitions at favorable prices.

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.

And, even if we complete an acquisition, our ability to successfully integrate the acquired business is subject to additional risks and uncertainties.

in 2019, Vivid Picks in 2021, Wavedash in September 2023, and Vegas.com in November 2023.

However, we may be unable to identify suitable acquisition targets or make acquisitions at favorable prices in the future.

Even if we identify a suitable acquisition target, our ability to successfully complete an acquisition depends on a variety of factors, which may include our ability to obtain financing on acceptable terms and requisite government approvals.

Additionally, even if we complete an acquisition, our ability to successfully integrate the acquired business and realize the expected benefits of the acquisition is subject to additional risks and uncertainties.

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:

In connection with any future acquisition, we may take actions that could adversely affect our business, including:

using a significant portion of our available cash;

issuing equity securities, which would dilute current stockholders’ ownership;

issuing equity securities, which would dilute the ownership and voting power of our existing stockholders ;

incurring substantial debt;

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and incurring large accounting write-offs, impairments, or amortization expenses.

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:

In addition, acquisitions involve inherent risks that, if realized, could adversely affect our business, financial condition, and results of operations, including those associated with:

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;

scaling of operations, systems and infrastructure and achieving synergies to meet the needs of the combined or acquired company;

managing geographically dispersed operations;

the diversion of management’s attention from other business concerns;

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;

diverting management’s attention from other business concerns;

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;

and the potential loss of key employees, customers, and partners of the acquired company.

Any of these risks could significantly affect our ability to complete acquisitions and expand our business.

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.

For example, each of our prior acquisitions involved certain of these risks, including, as applicable, those associated with integrating new lines of business, operating in new markets, and adhering to new legal and regulatory regimes.

The success of these and any future acquisitions is based, in part, on our ability to overcome these risks.

We are subject to risks associated with the growth of our international operations.

We have operations in Canada and Japan, and we may continue to expand our international operations.

Accordingly, our business is subject to risks associated with doing business internationally, including, but not limited to:

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;

obtaining governmental approvals, permits and licenses;

obtaining and enforcing intellectual property rights;

staffing and managing foreign operations;

We may be adversely affected if we are unable to manage the risks associated with the growth of our international operations.

We have operations in Canada and Japan, and we continue to expand our international operations.

Accordingly, we are subject to risks associated with doing business internationally, including, but not limited to:

complying with a variety of newly applicable, and often changing and/or conflicting, laws and regulations, including those relating to anti-bribery, anti-corruption, anti-money laundering, data protection, and privacy;

obtaining required governmental approvals, permits, and licenses;

obtaining and enforcing our intellectual property rights;

staffing and managing our foreign operations;

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;

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and political and economic instability.

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.

We may also have difficulty expanding our business internationally because of the difficulties associated with obtaining local ticket supply and/or limited brand recognition, which could delay or limit the acceptance of our services by ticket buyers, sellers, and partners in new markets and increased marketing and other costs associated with establishing our brand.

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.

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.

Our financial performance in certain periods may not be indicative of, or comparable to, our financial performance in other periods due to seasonality and other factors.

Our financial results and cash needs vary from period to period depending on, among other things:

popularity and demand for certain performers and events;

sports teams’ performances, and the length and team composition of sports playoff series and championship games;

the timing of top grossing events;

the number, location, venue type, and timing of certain live concert, sporting, and theater events;

the popularity of and demand for certain artists, sports teams, tours, and events;

artists’ decisions about when and where to perform;

sports teams’ performances, and the length and team composition of playoff series and championship games;

event cancellations;

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competitive dynamics;

and the timing of disbursements of accounts payable to sellers and partners around quarter-end.

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.

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.

The timing of top-grossing tours can also impact comparability of quarterly results year over year and, in rare cases, annual results.

Similarly, the number of sports games and the teams involved in playoff series can vary year over year and impact our results.

and the timing of disbursements of accounts payable to ticket sellers and partners.

Because our results may vary significantly from period to period, our financial performance in one period may not be indicative of, or comparable to, our financial performance in other periods.

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, concert on-sales begin for the following year, and theater event orders increase during the holiday season.

In addition, the timing of top-grossing tours and events, as well as the number of sports games and the teams involved in playoff series and championship games, can impact the year-to-year comparability of quarterly results (and, in rare cases, annual results).

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.

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.

We rely on the experience and expertise of our senior management team, key technical employees, and other highly skilled personnel, and we may be adversely affected if we are unable to retain and motivate these individuals.

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.

The loss of any member of our senior

management team or key personnel could significantly delay or prevent the achievement of our business objectives and/or harm our business and relationships.

Each of our executive officers, key technical employees, and other personnel could terminate their relationship with us at any time.

The loss of any member of our senior management team or key personnel could significantly delay or prevent the achievement of our business objectives and/or negatively impact our business and relationships.

As such, effective succession planning and the execution of smooth personnel transitions is important to our long-term success.

If we fail to effectively manage our hiring needs and execute smooth personnel transitions, our business may be adversely affected.

Competition in our industry for qualified employees is intense.

In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting, hiring, motivating and retaining employees.

We face significant competition for personnel.

To attract top talent, we have needed, and will continue to need, to offer competitive compensation and benefits packages.

We may also need to increase our employee compensation levels in response to competition and inflation.

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.

Impairment of our goodwill has in the past and could in the future adversely impact our financial results and financial condition.

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.

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.

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.

If we are required to record an impairment charge for goodwill in the future, it could adversely affect our financial condition.

Our business may be adversely affected by the effects of inflation.

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.

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.

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.

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.

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.

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.

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.

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.

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.

To attract top talent, we must offer competitive compensation arrangements and benefits packages, as well as periodically increase compensation levels in response to competition and inflation.

If we fail to successfully attract, hire, and integrate new personnel, our efficiency and ability to meet forecasts, as well as employee morale, productivity, and retention, could suffer, which may adversely affect our business.

Impairment of our goodwill has adversely affected, and may in the future adversely affect, our financial results and condition.

In accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), we test our goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if an event occurs or circumstances change that indicate that the fair value of such assets might be impaired.

If the carrying amount of our goodwill exceeds its implied fair value, an impairment loss is recorded equal to the amount of the excess.

During the year ended December 31, 2020, we recognized a non-cash impairment charge of $573.8 million, which included a goodwill impairment of $377.1 million.

As of December 31, 2024, we had a Goodwill – net balance of approximately $943.1 million (which represented approximately 57.6% of our total assets).

Due to market volatility, economic uncertainty, and inflationary concerns, there can be no assurance that our goodwill will not be impaired again in the future.

Impairment may result from, among other things, a significant decline in our expected cash flows, an adverse change in general economic conditions, and slower growth rates in our industry.

If we are required to impair our goodwill in the future, it could adversely affect our financial condition.

We may be adversely affected by the effects of inflation.

Inflation can negatively impact our business by increasing our overall costs, particularly if we are unable to achieve commensurate increases to revenues.

Inflation has resulted, and may continue to result, in elevated interest rates and capital costs, increased costs of labor, weakened exchange rates, reduced discretionary spending, and other similar effects.

As a result of inflation, we have experienced, and may continue to experience, increased costs.

Although we may take measures to mitigate the effects of inflation, such measures may not be effective and, even if such measures are effective, there could be a difference in timing between the effects of inflation and of such measures.

As a result, our business, financial condition (including liquidity), and results of operations may be adversely affected.

Risks Related to Government Regulation and Litigation

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.

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.

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.

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.

The promulgation of new and sometimes conflicting laws and regulations could also unfavorably impact our business and make compliance more complex, costly and challenging.

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.

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.

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.

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.

Our business depends on the ability of sellers to sell tickets on the secondary market unencumbered.

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.

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.

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.

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.

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.

We are subject to extensive governmental regulation, and we may be adversely affected if we fail to comply with applicable laws and regulations.

Our operations are subject to federal, state, local, and international laws and regulations governing key aspects of our business such as advertising, anti-bribery, anti-corruption, anti-money laundering, competition, consumer protection, data protection, export taxation, fantasy sports, intellectual property, payments, privacy, sports gaming, ticketing, ticket resale, and unfair business practices.

While we strive 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.

The promulgation of new and sometimes conflicting laws and regulations, as well as changes to existing laws and regulations or their interpretation, can make compliance more complex, costly, and challenging.

Our failure to comply with any applicable laws or regulations could result in investigations, inquiries, litigation, proceedings, and/or fines against us by governmental authorities and/or private actions brought by individuals which, if material, could adversely affect our business, financial condition, and results of operations.

We depend on the ability of sellers to sell tickets on the secondary market unencumbered.

Our business depends on sellers’ ability to list event tickets for sale on the secondary ticket market.

Some jurisdictions prohibit the resale of event tickets at prices above their face value, or at all, or otherwise highly regulate ticket resale.

Such prohibitions, or similar laws and regulations, could restrict or inhibit our ability to operate, or the ability of ticket buyers, sellers, and partners to continue to use, our ticket marketplace.

Actions taken by governments, rights holders, or primary ticketing companies, such as enacting resale restriction policies, requiring certain disclosures, using technology to limit where and how tickets can be 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.

Our processing of personal data and other sensitive information could give rise to liabilities as a result of governmental regulation, litigation, and conflicting legal requirements, including those relating to personal privacy rights.

In the ordinary course of business, we collect, receive, store, protect, use, transmit, share, and dispose of (collectively, “process”) personal data and other sensitive information.

These activities subject us to numerous federal, state, and international laws and regulations, industry standards, external and internal privacy and security policies, and contractual requirements addressing privacy, data protection, and the processing of such data and information.

states, and the federal and local governments, have adopted data protection and security legislation, including laws relating to personal data privacy and data breach notification.

states have also enacted comprehensive privacy laws that impose certain obligations on covered businesses, such as requiring certain privacy disclosures and giving residents certain rights with respect to their personal data ( e.g.

, the right to access, correct, or delete such data and to opt-out of certain data processing activities).

states also impose strict requirements on the processing of personal data, such as conducting data privacy impact assessments, and provide statutory fines for non-compliance.

For example, the CCPA applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.

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.

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.

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.

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.

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.

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.

In addition to new regulations, courts around the country continue to evolve their interpretation of applicable data privacy and protection laws, including the CCPA.

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.

Such litigation may lead legislatures to consider responsive regulation.

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.

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.

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.

state and federal legislators continue to consider and enact similar laws, reflecting a trend toward more stringent privacy legislation in the United States.

These and any future similar laws are likely to increase our compliance costs and overall risk, particularly when they have conflicting requirements, and may require us to further modify our data processing practices and policies.

In addition to new regulations, courts around the country continue to evolve their interpretation of data privacy and protection laws, including the CCPA.

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, state wiretapping laws, and other privacy laws and regulations, in relation to the use of tracking technologies such as cookies and pixels.

This trend may lead legislatures to consider responsive regulation.

These practices are also subject to increased challenges by class action plaintiffs.

Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.

Personal and other user data is also increasingly subject to legislation and regulations in foreign jurisdictions in which we operate.

For example, PIPEDA is a comprehensive Canadian privacy and security law for organizations collecting, using, or disclosing information about identified individuals for commercial purposes, and may impose obligations on covered organizations that are greater than what is common in the United States.

Certain Canadian provinces also have their own data protection regulations.

Similarly, the United Kingdom, the European Union, and countries in the European Economic Area (the “EEA”) traditionally have taken broader views on, and imposed different legal obligations on companies as to, the types of data that are subject to privacy and data protection laws and regulations.

For example, the E.U.

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.

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.

data protection laws, such as the GDPR and the U.K.

General Data Protection Regulation, which took effect in January 2021.

If we are required to comply with PIPEDA or EEA or U.K.

data privacy laws, it may significantly increase our operational costs and our overall risk exposure.

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.

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.

The Japanese Act on the Protection of Personal Information No.

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).

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.

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.

The United Kingdom has its own General Data Protection Regulation, which took effect in January 2021.

Under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions, significant monetary fines, and/or private litigation related to the processing of personal data.

The APPI, a Japanese law governing the handling of personal information, may also 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).

Compliance with these and any other foreign data privacy laws and regulations may significantly increase our operational costs and our overall risk exposure.

In the ordinary course of business, we transfer personal data from one jurisdiction to another.

Certain European jurisdictions, including the United Kingdom, have enacted laws requiring that personal data be localized or limiting the transfer thereof to other jurisdictions, including the United States.

Other jurisdictions have adopted or may adopt similar data localization and/or cross-border data transfer restrictions.

Although there are various mechanisms that may be used to transfer personal data from the United Kingdom and the EEA to the United States in compliance with these restrictions, they are subject to legal challenges and there can be no assurance that we can satisfy or rely on them.

If there were no lawful manner for us to transfer personal data from the United Kingdom or the EEA to the United States, or if the requirements for doing so were too onerous, we could face adverse consequences, including the interruption of our operations, the need to relocate our data processing activities, and penalties such as fines and injunctions.

In addition, companies that transfer personal data out of the United Kingdom and the EEA have faced increased scrutiny from regulators and litigants, and certain of such companies have been ordered by European regulators to suspend or cease certain such data transfers for allegedly violating the GDPR’s cross-border data transfer restrictions.

We must also comply with certain industry standards and contractual obligations related to data privacy and security.

For example, certain privacy laws, including the CCPA and the GDPR, require the imposition of specific contractual restrictions on service providers.

We also publish privacy policies, marketing materials, and other statements related to compliance with certain certifications or self-regulatory principles concerning data privacy and security.

regulators are increasingly scrutinizing these materials, and if they are found to be deficient, unfair, misleading, or misrepresentative of our practices, we could be subject to governmental enforcement actions or other adverse consequences.

From time to time, our personnel use generative artificial intelligence (“AI”) technologies in the course of their work.

We use also use generative AI and machine learning technologies (“AI/ML”) in certain of our products.

The disclosure and use of personal data in generative AI technologies, and the development and use of AI/ML, present various privacy and data security risks and are subject to an increasing number of laws and regulations.

Several jurisdictions, including in the United States and Europe, have enacted laws governing the development and use of AI/ML, such as the EU’s AI Act, and we expect other jurisdictions will adopt similar laws.

Certain consumer rights extended by privacy laws ( e.g.

, the right to delete certain personal data and regulate automated decision making) may also be incompatible with the use of AI/ML.

As a result, our use of these technologies could result in additional compliance costs, lawsuits, and regulatory actions.

However, our inability to use these technologies, or limitations on such use, could result in a competitive disadvantage.

and with our existing data management practices, policies, or product features.

If so, in addition to the possibility of fines, lawsuits (including class action claims), additional reporting requirements and/or oversight, bans or restrictions on processing personal data, orders to destroy or not use personal data, and other claims and penalties, we could be required to change our business activities and practices or to 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.

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.

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.

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.

Any inability by us, or our service providers and partners, 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 costs and liability to us and adversely affect our reputation, sales, and business.

In addition, any compromise of information security that results in the unauthorized access, acquisition, or release of personal or other user data, or the perception that such a compromise has occurred, could harm our brand and reputation, discourage existing and potential ticket sellers, buyers, and 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.

In addition, laws in certain of the jurisdictions in which we operate require, and laws in other jurisdictions in which we may operate in the future may require, businesses in certain instances to notify affected individuals, governmental entities, and/or credit reporting agencies of cybersecurity incidents affecting personal information.

Certain of our contractual obligations contain similar requirements.

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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.

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.

While we maintain general and cyber liability insurance policies, they 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 they may be inadequate to indemnify us for all or any portion of liabilities that may be imposed.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

We may be adversely affected by unfavorable outcomes in legal proceedings in which we, ticket sellers, or our partners are or may in the future be involved.

Our results may be affected by the outcome of litigation.

Unfavorable rulings in legal proceedings in which we, ticket sellers, or our partners may be involved could have a negative impact on us, including an impact that differs from expectations.

We are currently, and from time to time in the future, we, ticket sellers, and our partners may be subject to various claims, investigations, legal and administrative cases, lawsuits, and similar proceedings (whether civil or criminal) by governmental agencies or private parties, the outcome of which can be difficult to predict.

If we or they are unable to successfully defend against these proceedings, or if the results thereof are unfavorable, we or they may be required to pay significant 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.

Even if we adequately address the issues raised by such a proceeding, or successfully defend a third-party lawsuit or counterclaim involving us, such proceeding, 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.

Our business and industry may be adversely affected by unfavorable legislative outcomes.

The secondary ticket market is regulated by all U.S.

states to varying degrees, including by requiring certain disclosures, refunding practices, or other consumer affairs obligations.

Future laws, regulations, or unfavorable legislative outcomes could impose additional restrictions, such as ticket resale price caps and transfer bans, which could adversely affect our industry, business, and operating results.

Various jurisdictions have enacted, and other jurisdictions may in the future enact, rules and regulations, including tax and license requirements, for daily fantasy sports operators that may make the entry process more cumbersome,

expensive, and time consuming.

Vivid Picks’ growth depends on the continued legal status of real-money daily fantasy sports in various jurisdictions and our continued ability to obtain licenses to operate in jurisdictions where doing so is required.

We currently offer our daily fantasy sports contests in the District of Columbia and 21 states where either we have obtained the required license or a license is not required.

Any change to the regulatory climate surrounding daily fantasy sports, or to existing daily fantasy sports laws and regulations or their interpretation as it relates to Vivid Picks, could adversely affect our ability to operate our business as currently conducted or as we seek to do so in the future.

Our business may be subject to sales tax and other indirect taxes in various jurisdictions.

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.

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 on our marketplace, is a complex and evolving issue.

Because significant judgment is required to evaluate applicable tax obligations, 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.

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.

One or more jurisdictions may seek to impose additional reporting, recordkeeping, or indirect tax collection obligations on businesses like ours that facilitate online marketplaces.

Imposition of an information reporting or tax collection requirement could decrease ticket seller activity on our platform, which would adversely affect our business.

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.

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.

New legislation could require us, or ticket sellers on our marketplace, to incur substantial compliance costs, including in connection with tax calculation, collection, remittance, as well as audit requirements, which could adversely affect our business, financial condition, and results of operations.

In addition, we could be subject to 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 the proper authorities.

We could also be subject to audits and assessments with respect to jurisdictions for which we have not accrued tax liabilities.

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.

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 such taxes, could result in substantial tax liabilities for past sales and otherwise adversely affect our business, financial condition, and results of operations.

Risks Related to Information Technology, Cybersecurity, and Intellectual Property

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.

We may be adversely affected by system interruptions and the lack of integration and redundancy in our and third-party information systems and infrastructure.

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.

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.

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.

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.

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.

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.

System interruptions and the lack of integration and redundancy in such 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, and in the past has led, to technology interruptions.

Such interruptions could occur by virtue of a natural disaster, malicious action such as a cyberattack or intrusion, act of terrorism, military action, human error, or the other threats discussed in these risk factors.

In addition, the loss of certain key personnel could subject us to systems interruptions and require us to expend additional resources to continue to maintain our software and systems.

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 to ensure it remains at a level capable of servicing the demand and volume of our business.

Failure to do so may result in system instability, degradation in performance, or unfixable security vulnerabilities that could adversely affect 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.

In addition, we may not have adequate insurance coverage to compensate for losses from an extended interruption.

If any of these adverse events were to occur, it could adversely affect our business, financial condition and results of operations.

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.

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.

In addition, cybersecurity incidents or the inability to protect information could lead to increased incidents of ticketing fraud and counterfeit tickets.

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.

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.

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.

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.

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.

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.

We also face risks associated with cybersecurity incidents affecting third parties with which we are affiliated, partnered or otherwise conduct business.

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.

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.

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.

If we fail to adequately protect or enforce our intellectual property rights, our competitive position and business could be adversely affected.

Our proprietary technologies and information, including our software, informational databases and other components that make our products and services, are critical to our success.

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.

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.

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.

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.

We have been granted trademark registrations with the U.S.

Patent and Trademark Office and various foreign authorities for certain of our brands.

However, our existing or future trademarks may be adjudicated invalid by a court or may not afford us adequate protection against competitors.

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.

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.

In addition, our insurance coverage may not adequately compensate for losses

stemming from an extended interruption.

If any of these events were to occur, it could adversely affect our business, financial condition, and results of operations.

We may be adversely affected if our information technology systems, or those of third parties with whom we conduct business, are compromised.

Due to the nature of our business, we process certain personal data and other sensitive information about ticket buyers and sellers and our employees.

Penetration of our information technology systems, or the misappropriation or misuse of such data or information (including credit card information and other personally identifiable information), could interrupt our operations and subject us to adverse consequences, including increased costs, litigation, and governmental enforcement actions.

Cyberattacks, malicious internet-based activity, fraud, and similar evolving threats (including phishing attacks, malicious code, software bugs, malware attacks, ransomware attacks, denial-of-service attacks, credential stuffing attacks, and credential harvesting) threaten the confidentiality, integrity, and availability of our information technology systems.

Such threats come from a variety of sources and are increasingly prevalent and difficult to detect.

In addition, we rely on third parties to process certain information in a variety of contexts ( e.g.

, cloud-based infrastructure, encryption technology, and employee email) and to provide certain hardware, software, and applications.

These third parties’ information technology systems are subject to similar threats, and our ability to monitor their security practices is limited.

If any of these third parties were to suffer a security incident or other interruption, we could experience adverse consequences.

While we may be entitled to damages if a third party fails to satisfy its privacy- or security-related obligations to us, any award, assuming we are able to recover it, may be insufficient to cover our damages.

Our past and future business acquisitions could also increase our exposure to these threats if our systems were negatively affected by vulnerabilities in an acquired entity’s systems.

We have devoted significant resources to the development of systems, practices, and policies designed to detect, mitigate, and remediate vulnerabilities in our information technology systems, protect against potential cybersecurity threats and their consequences, and protect sensitive information.

However, such measures cannot provide absolute security or certainty.

Advances in threat actor capabilities, methods, and tools, inadvertent violations of our practices or policies, or other developments could result in a compromise or breach of our systems and processes that are used to protect sensitive information.

We may also experience delays in developing and deploying remedial measures designed to address identified vulnerabilities.

Any of these or similar threats could lead to a security incident or other interruption that results in the unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, or disclosure of, or access to, our information technology systems, or those of the third parties with whom we conduct business.

If we or such a third party experience (or are perceived to have experienced) a significant incident or interruption, it may have adverse consequences on us, including:

governmental enforcement actions;

lawsuits (including class action claims);

additional reporting requirements and/or oversight;

bans or restrictions on processing sensitive information;

indemnification obligations;

negative publicity;

reputational harm among ticket sellers, buyers, and partners;

the diversion of management resources;

the interruption of our operations (including data availability);

financial losses;

and incidents of ticketing fraud or counterfeit tickets.

In the event of such an incident, we may also be required or voluntarily choose to notify relevant stakeholders (including affected individuals, regulators, and investors) or to take other actions (such as providing credit monitoring and identity theft protection services).

Such disclosures and actions can be costly, and the failure to comply with applicable requirements could lead to adverse consequences.

Any of the foregoing could adversely affect our business, financial condition, and results of operations.

We may be adversely affected if we are unable to adequately protect or enforce our intellectual property rights.

Our proprietary technologies and information, including our software, informational databases, and other components that make up our products and services, are critical to our success.

We seek to protect our proprietary technologies and information through a combination of methods, including intellectual property rights such as U.S.

and foreign patents, trademarks, domain names, copyrights, and trade secrets, as well as through confidentiality

agreements and other contractual restrictions with employees, customers, suppliers, affiliates, partners, and others.

However, despite these efforts, a third party may be able to copy or otherwise obtain and use our intellectual property without authorization (which, if discovered, could require legal action to correct) and/or independently and lawfully develop products or services substantially similar to ours.

Any failure of our strategies to protect our proprietary technologies and information could adversely affect our business, financial condition, and results of operations.

In addition, there can be no assurance that our strategies to protect our intellectual property rights will prevent infringement, misappropriation, dilution, or other violations thereof, particularly in foreign countries where the laws may not protect such rights as fully as they do in the United States.

A failure to protect our intellectual property rights in a meaningful manner, or challenges to our related contractual rights, could result in the erosion of our brand names or other intellectual property and adversely affect our business, financial condition, and results of operations.

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.

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.

Any such litigation, regardless of the outcome or merit thereof, could result in substantial costs and divert the attention of management and other key technical resources, either of which could adversely affect our business, financial condition, and results of operations.

We may face potential liability and costs for legal claims alleging that we infringe upon third-party intellectual property rights.

There can be no assurance that we do not, or will not, infringe upon or otherwise violate third-party intellectual property rights.

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.

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.

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.

Our payments system depends on third-party providers and is subject to risks that may adversely affect our business.

From time to time, we have been, and may in the future be, subject to legal claims and proceedings alleging that we infringe upon or otherwise violate such rights.

These claims and proceedings, regardless of the outcome or merit thereof, could result in substantial costs and divert the attention of management and other key technical resources, either of which could adversely affect our reputation and financial condition.

In addition, the outcome of litigation is uncertain.

As such, third parties asserting claims could secure a judgment against us awarding substantial damages, as well as injunctive and/or other equitable relief, which could require us to rebrand, redesign, or reengineer our platform, products, or services, in addition to potentially blocking our ability to distribute, market, or sell our products and services.

Our payment system depends on third-party providers and is subject to risks that may adversely affect our business.

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.

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.

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.

The payment card networks could adopt new operating rules or interpret or re-interpret existing rules in ways that might prohibit us from providing certain services to some ticket buyers or sellers, be costly to implement or difficult to follow.

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.

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.

If this payment processing provider or any of its vendors do not interoperate efficiently with our platform or if it or any of its vendors suffer any failure or experience a security incident, our payments systems and business could be adversely affected.

Further, if this payment processing provider does not perform adequately or determines that certain types of transactions are prohibited, if its technology does not interoperate efficiently with our platform, or if our relationship with it (or with the banks or 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 provider requires us to comply with payment card network operating rules, which are set and interpreted by the payment card networks.

These networks could adopt new, or modify or re-interpret existing, operating rules in ways that might prohibit us from providing certain services to ticket buyers or sellers, be costly to implement, or be difficult to follow.

We are required to reimburse this payment processing provider for fines assessed by payment card networks if we, or ticket buyers or sellers using our platform, violate these rules ( e.g.

, processing various types of transactions that may be interpreted as a violation of certain payment card network operating rules).

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 limit or eliminate our ability to accept payment cards, any of which could adversely affect our business.

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.

The PCI Data Security Standard requires

companies to adopt certain measures to ensure the security of cardholder information, including using and maintaining firewalls, adopting proper password protections for certain devices and software, and restricting data access.

We rely on vendors to handle PCI matters and to ensure PCI compliance.

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.

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.

Despite our compliance efforts, we may become subject to claims that we have violated the PCI Data Security Standard based on past, present, or future business practices.

Our actual or perceived failure to comply with the PCI Data Security Standard could subject us to fines, terminated 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.

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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.

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.

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.

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.

Any such increase in fees could adversely affect our business, financial condition and results of operations.

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.

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.

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.

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.

We cannot predict what actions the U.S.

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.

Fraudulent schemes are becoming increasingly sophisticated and common, and our ability to detect and combat such schemes may be negatively impacted by the adoption of new payment methods and technology platforms.

If we or our payment processing provider fail to identify fraudulent activity, are unable to effectively combat the use of fraudulent payments on our platform, or otherwise experience increased levels of disputed credit card payments or transactions, our business, financial condition, and results of operations could be adversely affected.

In addition, the 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 provider could increase the fees that they charge us for their services, which would increase our operating costs and reduce our margins and could adversely affect our business, financial condition, and results of operations.

Any actual or alleged non-compliance by us in relation to existing or new laws and regulations could lead to reputational damage, litigation, increased costs or liabilities, damages, and/or the revocation of our ability to offer payment services in certain markets.

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, registration requirements, and administrative enforcement actions, as well as materially interfere with our ability to offer certain payment methods or to conduct our business in particular jurisdictions.

We cannot predict what actions 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.

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.

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.

The foregoing could impose substantial additional costs, considerably delay the development or provision of our solutions, require significant and costly operational changes, or prevent us from providing our solutions in any given market.

Risks Related to Our Indebtedness

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.

The agreement governing our credit facility includes restrictive covenants that, among other things, restrict our ability to:

incur additional debt;

Our credit facility imposes restrictions that limit management’s discretion in operating our business and, in turn, could impair our ability to meet our debt obligations.

Our credit facility includes restrictive covenants that, among other things, restrict our ability to:

incur additional indebtedness;

pay dividends and make distributions;

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and merge or consolidate.

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.

Our failure to comply with these covenants could lead to a default under our credit facility, which would entitle our lenders to accelerate the indebtedness thereunder and declare all amounts owed due and payable.

As of December 31, 2024, our total indebtedness, excluding unamortized debt discounts and debt issuance costs, was $393.0 million.

A substantial portion of our debt is variable-rate debt.

We incur higher interest costs if interest rates increase.

Interest rates were at historic lows during 2021 when the U.S.

Federal Reserve took several steps to protect the economy from the impact of the COVID-19 pandemic.

However, the U.S.

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.

Any such increase in interest costs could adversely affect our financial condition.

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;

increasing our vulnerability to adverse economic, regulatory and industry conditions;

limiting our ability to obtain additional financing for future working capital, capital expenditures, acquisitions and other purposes;

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;

Because our debt has a variable interest rate, we incur higher interest costs if interest rates

Interest rates increased significantly in 2022 and 2023, with only a slight decrease in 2024, and may remain elevated in the future.

Any increase in interest costs could adversely affect our financial condition.

Our current indebtedness and any future increases thereto could adversely affect our financial condition by:

making it more difficult to satisfy our obligations;

increasing our vulnerability to negative economic, regulatory, and industry conditions;

limiting our ability to obtain additional financing for future net working capital, capital expenditures, strategic investments, acquisitions, and other purposes;

requiring us to dedicate a substantial portion of our cash flows from operating activities to fund payments on our debt, thereby reducing funds available for operations and other purposes;

limiting our flexibility in planning for, or reacting to, changes in our business and industry;

making us more vulnerable to increases in interest rates;

making us more vulnerable to interest rate increases;

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.

We depend on our subsidiaries’ cash flows in order to satisfy our obligations.

We rely on distributions and/or loans from our subsidiaries to meet the payment requirements under our obligations.

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.

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We conduct substantially all of our operations through our subsidiaries.

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.

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.

We may face liquidity constraints if we are unable to generate sufficient cash flows and/or to raise additional capital when necessary or desirable.

Our cash flows from operating activities and, consequently, our ability to service our debt is therefore principally dependent upon our subsidiaries’ earnings, their distribution of those earnings to us, and, from time to time, their disbursement of loans or other payments of funds to us.

In addition, our subsidiaries’ ability to provide funds to us may be subject to restrictions under our credit facility, any such subsidiaries’ future indebtedness, and/or any applicable laws and regulations related to the availability of sufficient surplus funds.

We may face liquidity constraints if we are unable to generate sufficient cash flows and/or raise additional capital when necessary or desirable.

As of December 31, 2024, we had cash and cash equivalents of $243.5 million, which is available to us to fund our operating, investing, and financing activities.

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.

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:

general economic and capital market conditions, including inflationary concerns;

the availability of credit from banks or other lenders;

investor confidence in us;

and our results of operations.

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.

If we need additional capital and cannot raise it on acceptable terms, if at all, we may be unable to, among other things:

There can be no assurance that our business will generate sufficient cash flows from operating activities, or that we will be able to obtain financing, in an amount sufficient to fund our operations or other liquidity needs.

In the future, we may need to raise additional funds and be unable to obtain additional debt or equity financing on favorable terms, if at all.

Our ability to obtain financing will depend on several factors, including general economic and capital market conditions ( e.g.

, interest rates and inflationary concerns), credit availability from banks or other lenders, investor confidence, and our results of operations.

If we were to raise additional equity financing, it would dilute the ownership and voting power of our existing stockholders, and any new equity securities we issue could have rights, preferences, and privileges superior to those of our Class A common stock.

If we require additional capital and cannot raise it on acceptable terms, or at all, we may be unable to, among other things:

further develop and enhance our platform and solutions;

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attract, hire, develop, motivate, and retain employees;

respond to competitive pressures or unanticipated working capital requirements;

respond to competitive pressures and/or unanticipated working capital requirements;

or pursue acquisition opportunities.

Our inability to do any of the foregoing could reduce our ability to compete successfully and adversely affect our business.

Our inability to take these actions could hinder our ability to successfully compete and adversely affect our business.

Risks Related to Our Organizational Structure and the Ownership of Our Securities

Our Private Equity Owner exerts significant influence over us, and its interests may conflict with ours or yours.

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.

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.

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.

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.

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.

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:

(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;

(ii) four directors, so long as our Private Equity Owner beneficially owns at least 18% but less than 24% of the Closing Amount;

(iii) three directors, so long as our Private Equity Owner beneficially owns at least 12% but less than 18% of the Closing Amount;

(iv) two directors, so long as our Private Equity Owner beneficially owns at least 6% but less than 12% of our common stock;

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.

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.

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.

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.

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.

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.

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.

On November 3, 2023, we ceased to be a “controlled company” within the meaning of the corporate governance standards of Nasdaq.

As a result, we became subject to additional Nasdaq corporate governance requirements, including that:

our Board be composed of a majority of independent directors;

our Compensation Committee have a formal written charter and be composed entirely of independent directors;

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.

We were required

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.

During the one-year transition period, we may continue to rely on the phase-in schedule permitted by the Nasdaq corporate governance standards.

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.

We intend to remain in full compliance with the applicable Nasdaq corporate governance requirements in accordance with the phase-in schedule.

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.

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.

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.

The TRA requires us to make cash payments to Hoya Topco in respect of certain tax benefits, which payments may be substantial.

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:

The interests of Hoya Topco, which exerts significant influence over us, may conflict with those of us or our other stockholders.

Hoya Topco, which is controlled by entities affiliated with GTCR, beneficially owns approximately 36.6% of the voting power of our outstanding common stock.

Even though we are no longer a “controlled company” within the meaning of Nasdaq corporate governance standards, for so long as Hoya Topco continues to own a significant percentage of our common stock, it will be able to significantly influence the composition of our Board and management (including the appointment and removal of our officers), our business plans and policies (including decisions related to raising future capital), and actions requiring stockholder approval (including the amendment of our organizational documents, which govern the rights attached to our common stock).

In addition, Hoya Topco may be able to cause or prevent a change of control and/or an unsolicited acquisition of our company.

This ownership concentration could

deprive our securityholders of an opportunity to receive a premium for their securities as part of a potential acquisition and, ultimately, may affect the market price of our securities.

We, Hoya Topco, and Horizon Sponsor are party to a Stockholders’ Agreement, dated October 18, 2021 (as amended, the “Stockholders’ Agreement”), pursuant to which Hoya Topco has the right to designate a number of nominees to our Board as follows:

(i) five of our nine directors, so long as it and certain of its affiliates beneficially own at least 24% of the total number of shares of our common stock that were issued and outstanding on October 18, 2021 (the “Closing Amount”), one of whom must qualify as “independent” under applicable stock exchange regulations;

(ii) four of our nine directors, so long as it and certain of its affiliates beneficially own at least 18%, but less than 24%, of the Closing Amount;

(iii) three of our nine directors, so long as it and certain of its affiliates beneficially own at least 12%, but less than 18%, of the Closing Amount;

(iv) two of our nine directors, so long as it and certain of its affiliates beneficially own at least 6%, but less than 12%, of the Closing Amount;

and (v) one of our nine directors, until the date on which it and certain of its affiliates beneficially own less than 5% of the number of shares of our common stock that they held on October 18, 2021.

If the size of our Board is increased, Hoya Topco will have the right to designate a number of nominees to our Board that give Hoya Topco the same percentage of total directors as set forth in the preceding sentence (rounded up to the next whole number).

Pursuant to the Stockholders’ Agreement, Hoya Topco has currently designated five of our nine directors, which enables it to exert significant influence over our business and affairs.

Three of Hoya Topco’s five director designees qualify as “independent” under applicable Nasdaq rules.

GTCR and its affiliates engage in a broad spectrum of activities and investments, including in our industry.

In the ordinary course of their business, they may engage in activities where their interests conflict with those of us or our other stockholders, such as investing in or advising businesses that are our competitors, suppliers, or customers.

Our amended and restated certificate of incorporation (our “Charter”) provides that Hoya Topco, its affiliates, and their respective directors, partners, principals, officers, members, managers, and employees (including any such person who serves as one of our directors and/or officers) have no duty to refrain from engaging in the same or similar business activities or lines of business in which we operate.

In addition, Hoya Topco and its affiliates may pursue acquisition opportunities that may be complementary to our business (and therefore would not be available to us), in addition to pursuing acquisitions, divestitures, and other transactions that they believe could enhance their investment, even though such transactions may involve risks to our other security holders and/or prove not to be beneficial.

The TRA requires us to make cash payments, which may be substantial, to Hoya Topco in respect of certain tax benefits.

We are party to the TRA with Hoya Topco, Hoya Intermediate, GTCR Management XI, LLC (the “TRA Holder Representative”), and the other TRA Holders (as defined therein), pursuant to which we are generally required to pay Hoya Topco and the other TRA Holders 85% of the amount of any savings 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 realize, or are deemed to realize, as a result of certain tax attributes, which include:

(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;

(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”);

(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;

(ii) tax basis adjustments resulting from taxable exchanges of common units of Hoya Intermediate (“Intermediate Units”) for shares of our Class A common stock that are acquired from a TRA Holder pursuant to the terms of Hoya Intermediate’s Second Amended and Restated Limited Liability Company Agreement (the “Intermediate LLC Agreement”);

(iii) certain tax attributes of Blocker Corporations (as defined in the Intermediate LLC Agreement) holding Intermediate Units that are acquired by us pursuant to a reorganization transaction;

(iv) certain tax benefits realized by us as a result of certain U.S.

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and (v) tax deductions in respect of portions of certain payments made under the TRA.

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).

The Internal Revenue Service or another taxing authority may challenge a position we take, and a court may sustain such a challenge.

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.

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.

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.

Payments under the TRA generally are 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).

The Internal Revenue Service or any other taxing authority may challenge a position we take, and a court may sustain such a challenge.

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 ( e.g.

, due to adjustments resulting from examinations by taxing authorities).

Rather, any excess payments made to such TRA Holders will reduce any future cash payments that we are required to make under the TRA, after the determination of such excess.

However, a challenge to any of the tax attributes that 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.

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.

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.

The lump-sum payment could be material and/or materially exceed any actual tax benefits that we realize subsequent to such payment.

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.

Moreover, the TRA provides that, in certain early termination events, we are required to make a lump-sum cash payment to all of the TRA Holders in an amount that is 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.

The lump-sum cash payment could be material and/or materially exceed any actual tax benefits that we realize subsequent to such payment.

The amount and timing of any payments under the TRA varies depending upon several factors, including the timing of TRA Holders’ exchanges of Intermediate Units for shares of our Class A common stock, the market price of our Class A common stock at the time of such exchanges, and the amount and timing of the recognition of our income for applicable tax purposes.

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.

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.

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.

If we are unable to make timely payments for any reason, the unpaid amounts will be deferred and will accrue interest until they are paid.

Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of the TRA and therefore accelerate payments.

Furthermore, our future obligation to make payments under the TRA could make us a less attractive acquisition target, 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.

As a holding company, our principal assets are our equity 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 the TRA.

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.

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.

We intend to cause Hoya Intermediate to continue making quarterly distributions to its members, including us, in an amount that is 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.

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.

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.

federal income tax purposes and, as such, generally is not subject to U.S.

In certain circumstances, Hoya Intermediate will be required to make distributions, which may be substantial, to us and Hoya Topco.

Because Hoya Intermediate is, and will continue to be, treated as a partnership for U.S.

federal income tax purposes, it is generally not subject to U.S.

federal income tax.

Instead, its taxable income is generally allocated to its members, including us.

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.

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.

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.

Hoya Intermediate has made, and may in the future make, tax distributions to its members, including us, as set forth in the Intermediate LLC Agreement, calculated using an assumed tax rate, to provide liquidity to such members in order to pay taxes on their allocable share of the taxable income.

Under applicable tax rules, Hoya Intermediate may be required to allocate its net taxable income disproportionately to its members in certain circumstances.

Because tax distributions are made pro rata on a per-Intermediate Unit basis to all members and such tax distributions are determined based on the member with the highest assumed tax liability per Intermediate 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.

As a result of:

(i) actual and potential differences in the amount of net taxable income allocable to us and 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 tax distribution obligations, we have received, and may in the future receive, distributions significantly in excess of our actual tax liabilities and our obligations to make payments under the TRA.

If we do not use such cash balances to pay dividends on our Class A common stock (or in another way such that holders of Intermediate Units, other than our company, do not benefit from the value attributable thereto) 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 exchange its Intermediate Units for shares of our Class A common stock (or, at our election, a cash amount equal to the fair market value thereof).

We have no obligation to distribute any such cash balances to our stockholders, and no adjustments will be made to the consideration provided to a member of Hoya Intermediate in connection with an exchange or redemption of its Intermediate Units as a result of any retention of any such cash balances by us.

Risks Related to Being a Public Company

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Securities markets worldwide experience significant price and volume fluctuations.

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.

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:

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;

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");

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;

failure to meet securities analysts’ earnings estimates;

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;

speculation in the press or investment community about our business;

This market volatility, as well as general economic, market, or political conditions, could reduce the market price of our securities despite our operating performance.

The market price of our securities may fluctuate widely or decline significantly in the future in response to several factors, including, but not limited to:

the realization of any of the risks discussed elsewhere in this Report;

unfavorable market and economic conditions;

the loss of investor confidence in the global financial markets and investing in general;

adverse market reactions to indebtedness that we may incur or securities that we may issue in the future, including securities we may issue under our 2021 Incentive Award Plan (as amended, the “2021 Plan”);

adverse market reactions to changes in our ownership or capital structure, including as a result of secondary offerings of our Class A common stock;

unanticipated variations of our quarterly and annual operating results;

a failure to meet securities analysts’ earnings estimates;

the publication of negative or inaccurate research reports about our business, industry, or securities and/or the failure of securities analysts to provide adequate coverage of our business or securities;

changes in the market valuations of similar companies;

speculation in the press or investment community about our business or industry;

the trading activity of our largest stockholders;

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short sales, hedging, and other derivative transactions involving our securities;

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;

enacted or proposed changes to laws or regulations affecting our business or industry, or differing interpretations thereof;

and increases in compliance or enforcement inquiries and investigations by regulatory authorities.

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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.

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.

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.

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.

We may be the target of this type of litigation in the future, which could result in substantial legal fees and divert the attention of management and other key resources that are needed to successfully run our business, which could adversely affect our business, financial condition, and results of operations.

We have identified 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 errors in our financial statements that require a restatement or cause us to fail to meet our periodic reporting obligations.

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 periodic reports and provide an annual report on the effectiveness of our internal control over financial reporting.

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.

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.

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.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

In connection with the audit of our financial statements for the fiscal year ended December 31, 2020, we identified deficiencies in our internal control over financial reporting which, in the aggregate, constituted a material weakness.

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.

We determined in all of these years that we had deficiencies related to the

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.

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.

These actions have begun to be validated through testing and, when fully implemented, we believe they will be effective in remediating the material weakness.

However, additional time is required to complete implementing the enhanced procedures and to test and ensure the effectiveness and sustainability of the improved controls.

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.

However, internal controls may not detect and prevent all misstatements due to inherent limitations such as the possibility of human error, the circumvention or overriding of controls, and/or fraud.

Therefore, even effective

internal controls, no matter how well designed and operated, 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 our internal control over financial reporting.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s financial statements will not be prevented or detected on a timely basis.

In connection with the audit of our financial statements for each of the years ended December 31, 2024, 2023, 2022, 2021, and 2020, we identified deficiencies in our internal control over financial reporting related to the 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.

We are continuing to review our internal control procedures to develop and implement new controls and processes.

During the year ended December 31, 2024, these efforts included:

implementing segregation of duties over business process and information technology control activities;

establishing clearly defined roles within our finance and accounting functions;

increasing the number of personnel in our finance and accounting functions that have an appropriate level of technical accounting and SEC reporting experience;

and designing and implementing additional internal controls.

However, the material weakness will not be considered remediated until the applicable remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

There can be no assurance that our remediation activities will be successful or that additional material weaknesses will not be identified in the future.

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.

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.

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.

Further, once we cease to be an EGC under the JOBS Act, 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 pursuant to Section 404 of SOX.

This independent assessment could detect problems that 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 significant remediation expenses.

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.

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.

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;

We are an EGC, and our reliance on exemptions from certain reporting requirements that are applicable to non-EGCs could make our securities less attractive to investors.

We are an EGC under the JOBS Act.

For as long as we continue to be an EGC, we are permitted to utilize certain exemptions from reporting requirements that are applicable to non-EGCs.

These exemptions include:

not being required to have our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of SOX;

reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

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:

and exemptions from the requirements of holding a non-binding advisory vote on executive compensation or golden parachute payments that were not previously approved.

If 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 our securities may be more volatile.

The JOBS Act also exempts EGCs from being required to comply with new or revised financial accounting standards until private companies are required to do so.

The JOBS Act provides that an EGC can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs, but that any such election is irrevocable.

We have elected not to opt out of the extended transition period, which means that when a new or revised financial accounting standard has different application dates for public and private companies, we are permitted to adopt such standard at the same time as private companies.

This may make the comparison of our financial statements

with those of a non-EGC, or an EGC that has elected to opt out of the extended transition period, difficult because of the potential differences in financial accounting standards used.

We will cease to be an EGC upon the occurrence of the first of the following:

(i) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue;

(ii) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates;

(ii) the date on which we qualify as a “large accelerated filer” with at least $700.0 million of equity securities held by non-affiliates;

(iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities;

or (iv) December 31, 2026.

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.

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.

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.

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

application dates for public or private companies, we, as an emerging growth company, can adopt such standard at the same time as private companies.

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.

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.

The following warrants to purchase shares of our Class A common stock are outstanding and exercisable:

(i) warrants to purchase 6,519,791 shares at an exercise price of $11.50 per share;

(ii) warrants to purchase 17.0 million shares at an exercise price of $10.00 per share;

(iii) warrants to purchase 17.0 million shares at an exercise price of $15.00 per share;

and (iv) public warrants to purchase 6,766,853 shares at an exercise price of $11.50 per share.

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”).

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.

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.

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.

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.

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.

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.

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.

Provisions in our organizational documents may delay or prevent our acquisition by a third party.

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:

the sole ability of directors to fill a vacancy on our Board;

advance notice requirements for stockholder proposals and director nominations;

provisions limiting stockholders’ ability to call special meetings of stockholders, require extraordinary general meetings of stockholders and take action by written consent;

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;

the division of our Board into three classes, with each class serving staggered three-year terms;

and the lack of cumulative voting for the election of directors.

and (iv) December 31, 2026.

The exercise or exchange of certain outstanding securities would increase the number of shares of our Class A common stock eligible for resale in the public market and/or dilute the ownership and voting power of our existing stockholders.

As of December 31, 2024, the following warrants were outstanding and exercisable:

(i) warrants to purchase 6,519,791 shares of our Class A common stock at an exercise price of $11.50 per share;

(ii) warrants to purchase 17,000,000 shares of our Class A common stock at an exercise price of $10.00 per share;

(iii) warrants to purchase 17,000,000 shares of our Class A common stock at an exercise price of $15.00 per share;

(iv) public warrants to purchase 6,766,853 shares of our Class A common stock at an exercise price of $11.50 per share;

and (v) warrants to purchase 4,000,000 shares of our Class B common stock at an exercise price of $0.001 per share (which are only exercisable together with the exercise of corresponding warrants to purchase Intermediate Units (2,000,000 at an exercise price of $10.00 per unit and 2,000,000 at an exercise price of $15.00 per unit)).

The issuance of shares of our Class A and/or Class B common stock upon the exercise of these warrants would dilute the ownership and voting power of our existing stockholders.

In addition, the issuance of shares of our Class A common stock upon the exercise of warrants, or in exchange for outstanding shares of our Class B common stock, would increase the number of shares of our Class A common stock eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market, or the fact that such additional shares may be issued, could adversely affect the market price of our Class A common stock.

Securities analysts may not publish favorable, or any, research reports about us, which could adversely affect the market price or trading volume of our securities.

The trading market for our securities will be influenced to some extent by the research reports that industry or securities analysts publish about us.

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 increase the likelihood that we fail to meet their estimates.

If analysts provide inaccurate reports, issue unfavorable opinions regarding our business, industry, or securities, cease coverage of us, 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.

Provisions in our organizational documents may deter, delay, or prevent our acquisition by a third party.

Provisions in our Charter and our amended and restated bylaws (as amended, our “Bylaws”) 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 deter, delay, or prevent a merger, acquisition, tender offer, proxy contest, or other transaction that stockholders may consider favorable, include:

(i) the sole ability of directors to fill a vacancy on our Board;

(ii) advance notice requirements for stockholder proposals and director nominations;

(iii) limitations on stockholders’ ability to call special meetings and act by written consent;

(iv) our Board’s ability to issue and designate the terms of 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 ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our Board;

(v) the division of our Board into three classes, each of which serves staggered three-year terms;

and (vi) the lack of cumulative voting for the election of directors.

These provisions could discourage potential takeover attempts and reduce the price that investors are willing to pay for our securities.

The exclusive forum provisions of our amended and restated charter may discourage lawsuits against our directors and officers.

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.

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.

The exclusive forum provisions of our Charter may discourage lawsuits against our directors and officers.

Our Charter provides that, to the fullest extent permitted by law and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Chancery Court”) (or, in the event that

the Chancery Court does not have jurisdiction, the U.S.

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 Charter, or our Bylaws, or as to which the DGCL confers jurisdiction on the Chancery Court;

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.

federal courts have exclusive jurisdiction.

Our amended and restated charter further provides that the U.S.

Our Charter further provides that the U.S.

federal district courts are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

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.

These exclusive forum provisions may have the effect of discouraging lawsuits against our directors and officers.

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.

By becoming our stockholder, you are deemed to have notice of and consented to these exclusive forum provisions.

The enforceability of similar provisions in other companies’ certificates of incorporation has been challenged in legal proceedings and it is possible that, in connection with any applicable action brought against us, a court could find 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.

What changed 10-K

Item 1A. Risk Factors