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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-31 · 91 added, 396 removed, 496 unchanged (50% of the section changed)

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our significant past operating losses and any inability to maintain profitability or accurately predict fluctuations in the future;

a rapidly developing and relatively new market;

inability to sustain or manage our growth, or otherwise implement our business strategies;

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competition in our industry;

ability to attract, maintain, and retain licenses for popular games on our platforms;

ability to enter into definitive license agreements with certain game publishers;

ability to maintain and acquire new users and creators;

our ability to maintain, enhance, and promote our brand;

negative perceptions about our brand, platform, content, leagues, tournaments, and/or competitions;

negative perceptions about our brand;

anticipating and adopting changes to new technologies, business strategies, and/or methods;

actual or perceived security breaches, as well as errors, vulnerabilities or defects in our software and/or products, and in software and/or products of third-party providers;

reliance on server functionality;

the interoperability of our products and services across third-party services and systems;

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changes in tax laws or regulations regarding us or our customers;

decreased levels of traffic due to intensified government regulation of the Internet industry;

liability in the event of a violation of privacy regulations, data privacy laws, and/or child protection laws;

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piracy, unauthorized copying, and other forms of intellectual property infringement.

Risks Relating to our Indebtedness

We have incurred a significant amount of indebtedness, and may incur additional indebtedness in the future, which could impair our liquidity and harm our business, results of operations and financial condition;

If we incur additional debt, it could further increase the risks associated with our leverage and exacerbate the risks described herein;

restrictive covenants in the agreements governing our indebtedness may limit our financial and operational flexibility, and our indebtedness is secured by a first-priority lien against substantially all of our assets;

we may not generate sufficient cash to service our indebtedness;

repayment of our indebtedness is dependent in part on cash flow generated by our subsidiaries;

we may be unable to refinance our indebtedness, and if we do, such terms may not be favorable to us.

If we incur new debt, it could increase the risks associated with our leverage and exacerbate the risks described herein;

Governance Risks and Risks Related to Our Common Stock

Pursuant to notices received by Nasdaq, our common stock may be delisted from the Nasdaq Capital Market, and if our Common Stock is delisted, such event is likely to reduce the liquidity of our common stock and may inhibit or preclude our ability to raise additional financing;

provisions of Delaware law and our certificate of incorporation and bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us;

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our policy of not paying cash dividends on our common stock;

lessened disclosure requirements due to our status as an smaller reporting company;

lessened disclosure requirements due to our status as a “smaller reporting company;

ineffective internal controls could have a material adverse effect on our business, financial conditions, and results of operations;

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Risks Related to Artificial Intelligence and Machine Learning

Integration of artificial intelligence (“AI”) into our operations could adversely affect our business;

issues in the use of AI or machine learning (“ML”) in our operations may result in reputational harm or liability;

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We have incurred significant losses since our inception, and we may continue to experience losses in the future.

The Company incurred net losses as disclosed in the accompanying consolidated statements of operations for the periods presented.

Fiscal Years 2024 and 2023 included noncash stock compensation, amortization and impairment charges totaling $3.8 million and $17.3 million, respectively.

As of December 31, 2024, we had an accumulated deficit of $270.0 million.

The Company incurred net losses as disclosed in the accompanying statements of operations for the periods presented.

As of December 31, 2025, including the impact of noncash stock compensation and intangible asset amortization, we had an accumulated deficit as disclosed in the accompanying balance sheet.

We cannot predict if we will achieve profitability soon or at all.

We expect to continue to expend substantial financial and other resources on, among other things:

We have modified our approach to expenditures to better reflect our revenue and net revenue levels.

Such ongoing expenditures are expected to include investments in, among other things:

investments to expand and enhance our technology platform and technology infrastructure, make improvements to the scalability, availability and security of our platform, and develop new offerings;

sales and marketing, including expanding our customer acquisition and sales organization and marketing programs, and expanding our programs directed at increasing our brand awareness among current and new customers;

investments in bandwidth to support our video streaming functionality;

contract labor costs and other costs to host our leagues and tournaments;

costs to retain and attract users and creators and license first tier game titles, grow our online user community and generally expand our business operations;

expanding our customer acquisition and sales organization and marketing programs, and expanding our programs directed at increasing our brand awareness among current and new customers;

hiring additional employees;

expansion of our operations and infrastructure, both domestically and internationally;

expansion of our operations, both domestically and internationally;

general administration, including legal, accounting and other costs related to being a public company.

We may not generate sufficient revenue to offset such costs to achieve or sustain profitability in the future.

We expect to continue to invest heavily in our operations, our online experiences, and business development related to game platforms and publishers, advertisers, sponsors and user acquisition, to maintain as well as accelerate our market position, support anticipated future growth and to meet our expanded reporting and compliance obligations as a public company.

We expect to continue to maintain a best-in-class operation and business development capability related to securing marketing and advertising brand and agency clients and delivering against their campaign objectives, to maintain as well as accelerate our market position, support anticipated future growth and to meet our expanded reporting and compliance obligations as a public company.

We intend to continue implementing our business strategy with the expectation that there will be no material adverse developments in our business, liquidity or capital requirements.

If one or more of these factors do not occur as expected, it could have a material adverse impact on our activities, including (i) reduction or delay of our business activities, (ii) forced sales of material assets, (iii) defaults on our obligations, or (iv) insolvency.

If one or more of these factors do not occur as expected, it may have a material adverse impact on our activities, including (i) reduction or delay of our business activities, (ii) forced sales of material assets, (iii) defaults on our obligations, or (iv) insolvency.

Our planned investments may not result in increased revenue or growth of our business.

We cannot assure you that we will be able to generate revenue sufficient to offset our expected cost increases and planned investments in our business and platform.

We cannot assure you that we will be able to generate sufficient revenue to offset our expected costs and planned investments in our business and platform.

If we fail to achieve and sustain profitability, then we may not be able to achieve our business plan, fund our business or continue as a going concern.

We are experiencing a severe cash shortage and without sufficient additional financing we may not be able to execute our business strategy and may be required to cease operations .

As of December 31, 2024, our cash and cash equivalents amounted to $1.3 million.

Our revenue for the three-month period ended December 31, 2024, was approximately $3.5 million, and we have been reliant upon proceeds from prior financings (in addition to the revenue from our operations) to fund our operations.

If we do not continue to raise capital until we generate sufficient cash flow from operations to fund our operations and cover our working capital deficit, we may be required to discontinue or further substantially modify our business.

We cannot be certain that additional proceeds from any offering or other financings that we may undertake will be available to us when required, if at all.

The failure to raise necessary funds will have a material adverse effect on our business, financial condition, operating results and prospects.

Our auditors have included an explanatory paragraph in their opinion regarding our ability to continue as a going concern.

If we are unable to continue as a going concern, our securities will have little or no value.

WithumSmith+Brown, PC, our independent registered public accounting firm for the fiscal years ended December 31, 2024 and 2023, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, indicating that our recurring losses from operations and negative cash flows from operations raises substantial doubt about our ability to continue as a going concern.

If we are unable to obtain profitability or improve our liquidity position, we may not be able to continue as a going concern.

We anticipate that we will continue to generate operating losses and use cash in operations through the foreseeable future.

As further set forth below, we anticipate that we will need significant additional capital, or we may be required to curtail or cease operations.

In order to continue as a going concern, we will require significant additional capital, which we may be unable to obtain.

In order to continue as a going concern, we may require additional capital, which we may be unable to obtain.

Revenues generated from our operations are not presently sufficient to sustain our operations.

Therefore, we will need to raise additional capital in the future to continue our operations.

We anticipate that our principal sources of liquidity will not be sufficient to fund our activities to obtain long-term, sustainable profitability.

In order to have sufficient cash to fund our operations to obtain long-term, sustainable profitability, we will need to raise additional equity or debt capital.

Therefore, we may need to raise additional capital in the future to continue our operations.

We anticipate that our principal sources of liquidity may not be sufficient to fund our activities to obtain long-term, sustainable profitability.

There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

We will be required to pursue sources of additional capital through various means, including debt or equity financings.

We may be required to pursue sources of additional capital through various means, including debt or equity financings.

Future financings through equity investments will be dilutive to existing stockholders.

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Our business is highly competitive and subject to rapid changes.

We face significant competition to attract and retain our users, developers, and creators that we anticipate will continue to intensify.

Should we fail to attract and retain users, developers, and creators, our business and results of operations may suffer.

We compete for both users, developers, and creators.

We compete to attract and retain our users’ attention on the basis of our content and user experiences.

We compete for users and their engagement hours with global technology leaders such as Amazon, Apple, Meta Platforms, Google, Microsoft, and Tencent, global entertainment companies such as Comcast, Disney, and ViacomCBS, online content platforms including Netflix, Spotify, and YouTube, as well as social platforms such as Facebook, Instagram, Pinterest, and Snap.

We rely on developers to create the content that leads to and maintains user engagement (including maintaining the quality of experiences).

We compete to attract and retain developers by providing developers the tools to easily build, publish, operate, and monetize content.

We compete for developers and engineering talent with gaming and metaverse platforms such as Epic Games, Unity, Meta Platforms, and Valve Corporation, which also give developers the ability to create or distribute interactive content.

We do not have any agreements with our developers that require them to continue to use our platform for any time period.

In the future, if we are unable to continue to provide value to these developers and they have alternative methods to publish and commercialize their offerings, they may not continue to provide content to our platform.

Should we fail to provide compelling advantages to continued use of our ecosystem to developers, they may elect to develop content on competing interactive entertainment platforms.

If a significant number of our developers no longer provide content, we may experience an overall reduction in the quality of our experiences, which could adversely affect users’ interest in our platform and lead to a loss of revenue opportunities and harm our results of operations.

We face significant competition to attract and retain our customers that we anticipate will continue to intensify.

Should we fail to attract and retain customers, our business and results of operations may suffer.

We compete for brand and agency customers.

Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages, such as:

larger sales and marketing budgets and resources;

broader and more established relationships with users, developers, and creators;

broader and more established relationships with brands and agencies;

greater resources to make acquisitions and enter into strategic partnerships;

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We expect competition to continue to increase in the future.

Conditions in our market could change rapidly and significantly as a result of technological advancements, the emergence of new entrants into the market, partnering or acquisitions by our competitors, continuing market consolidation, or changing developer, creator and user preferences, which can be difficult to predict or prepare for.

Our competitors vary in size, and some may have substantially broader and more diverse offerings or may be able to adopt more lucrative payment policies or structures for developers.

Conditions in our market could change rapidly and significantly as a result of technological advancements, the emergence of new entrants into the market, partnering or acquisitions by our competitors, continuing market consolidation, or changing customer preferences, which can be difficult to predict or prepare for.

Our competitors vary in size, and some may have substantially broader and more diverse offerings or may be able to adopt more lucrative payment policies or structures for brands and agencies.

Failure to adequately identify and adapt to these competitive pricing pressures could negatively impact our business.

We may not be able to sustain our growth, effectively manage our anticipated future growth or implement our business strategies.

We have a limited operating history as a leading creator and publisher of content experiences and media solutions across the world’s largest immersive platforms and have experienced growth during certain of the periods presented herein due, in large part, to the acquisitions we completed during Fiscal Year 2023 and Fiscal Year 2021.

We have a somewhat limited operating history as a leading creator and publisher of content experiences and media solutions across the world’s largest immersive platforms and have experienced organic and inorganic growth during certain prior periods.

However, recent growth rates may not be indicative of our future performance due to our limited operating history and the rapid evolution of our business model.

We may not be able to achieve similar results or accelerate growth at the same rate as we have organically or following the completion of our recent acquisitions and we may not achieve our expected results, all of which may have a material and adverse impact on our financial condition and results of operations.

In addition, our rapid growth and expansion have placed, and continue to place, significant strain on our management and resources.

This level of significant growth may not be sustainable or achievable at all in the future.

We believe that our future growth will depend on many factors, including our ability to develop new sources of revenues, diversify monetization methods including our direct to consumer offerings, attract and retain competitive gamers and creators, increase engagement, continue developing innovative technologies, and experiences in response to shifting demand in open world gaming, increase brand awareness, and expand into new markets.

We may not be able to achieve similar results or accelerate growth at the same rate as we have organically or following the completion of prior acquisitions and we may not achieve our expected results, all of which may have a material and adverse impact on our financial condition and results of operations.

We believe that our future growth will depend on many factors, including our ability to continue diversifying and growing new sources of revenues, attract and retain a larger number of brand and agency clients, continue developing our data platform in a manner that increases demand for our products and services.

We cannot assure you that we will achieve any of the above, and our failure to do so may materially and adversely affect our business and results of operations.

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Many elements of our business are unique, evolving and relatively unproven.

Our business and prospects depend on the continuing development of a leading position as a creator and publisher of content experiences and media solutions across the world’s largest immersive platforms.

The market for gaming-related content has grown significantly in recent years and continues to rapidly develop, which may present significant challenges.

Our business relies upon our ability to cultivate and grow a robust community of developers and creators and audience members, and our ability to successfully monetize such community through advertising and direct to consumer opportunities.

In addition, our continued growth depends, in part, on our ability to respond to rapid technological evolution, continued shifts in gamer trends and demands, frequent introductions of new games and titles and the constant emergence of new industry standards and practices.

Our business and prospects depend on the continuing development of a leading position as a provider of media solutions for brands interested in reaching and engaging audiences who play video games.

The market for gaming media solutions has grown significantly in recent years and continues to rapidly develop, which may present significant challenges.

Our business relies upon our ability to cultivate and grow a robust client and partner base and successfully achieve gross margins from our products and services that provide sufficient resources to fund our operations.

In addition, our continued growth depends, in part, on our ability to respond to rapid technological evolution, continued shifts in gamer trends and demands and the constant emergence of new industry standards and practices and video game platform policies and terms of use.

Developing and integrating into new games, titles, content, products, services or infrastructure could be expensive and time-consuming, and these efforts may not yield the benefits we expect to achieve at all.

We cannot assure you that we will succeed in any of these aspects or that the industry within which we operate will continue to grow as rapidly as it has in the past.

We generate a significant portion of our revenues from advertising and sponsorships.

If we fail to attract more advertisers and sponsors to our platform, or if advertisers or sponsors are less willing to advertise with or sponsor us, our revenues may be adversely affected.

We generate a significant portion of our revenues from advertising on existing digital platforms and within our owned and operated platforms, which we expect to further develop and expand in the near future as online viewership across platforms continues to expand.

Our revenues from advertising and sponsorship partly depend on the continual development of the online advertising industry and advertisers’ willingness to allocate budgets to online advertising in the gaming and content streaming industry.

In addition, companies that decide to advertise or promote online may utilize more established methods or channels, such as more established internet portals or search engines, over advertising on our platform.

If the online advertising and sponsorship market does not continue to grow, or if we are unable to capture and retain a sufficient share of that market, our ability to increase our current level of advertising and sponsorship revenue and our profitability and prospects may be materially and adversely affected.

Furthermore, our core and long-term priority of optimizing the user experience and satisfaction may limit our platform’s ability to generate revenues from advertising and sponsorship.

For example, in order to provide our users and creators with an uninterrupted experience, we do not place significant amounts of advertising on our streaming interface or insert pop-up advertisements during streaming.

While this decision could adversely affect our operating results in the short-term, we believe it enables us to provide a superior gamer experience on our platform, which will help us expand and maintain our current base of users and creators and enhance our monetization potential in the long-term.

However, this philosophy of putting our users and creators first may also negatively impact our relationships with advertisers, sponsors or other third parties, and may not result in the long-term benefits that we expect, in which case the success of our business and operating results could be harmed.

We generate the majority of our revenues from brands and agencies.

If we fail to attract more brands and agencies, or if brands or agencies are less willing to partner with us, our revenues may be adversely affected.

We generate the majority of our revenues from brands and agencies who engage the Company to design, implement, and report upon marketing and advertising campaigns that reach audiences of video game players across gaming and social and digital platforms.

We expect to expand our volume of brand and agency relationships in the near future.

Our revenues from brand and agency campaigns partly depends on the continual development of the digital advertising industry and advertisers’ willingness to allocate budgets to digital advertising targeting gamers.

If the digital advertising market does not continue to grow, or if we are unable to capture and retain a sufficient share of that market, our ability to increase our current level of revenue and our profitability and prospects may be materially and adversely affected.

Furthermore, our core and long-term priority of utilizing unique data insights and intelligence to win more business, improve campaign performance for our clients, and expand our sources of revenue may not be fully realized.

For example, our data platform may not produce valuable insights or may not enable the company to deliver superior performance relative to our competitors or when compared to alternative advertising channels chosen by our clients, or compel brands and agencies to expand their scope of business with us.

While this outcome could adversely affect our operating results in the short and long-term, we believe the data platform will enable us to provide differentiated products and services in our industry.

Our revenue model may not remain effective and we cannot guarantee that our future monetization strategies will be successfully implemented or generate sustainable revenues and profit.

The Company generates revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) content and technology through the production and distribution of our own, advertiser and third-party content, and (iii) direct to consumer offers, including in-game items, e-commerce, game passes and digital collectibles.

The Company generates revenue from (i) the creation and distribution of in-game interactive content and media products, (ii) the distribution of interactive and standard media products designed to reach gamers, and (iii) revenue share arrangements with select video game creators.

We have generated, and expect to continue to generate, a substantial portion of revenues using this revenue model in the near term.

Although our business has experienced significant growth in recent years, there is no guarantee that our direct to consumer packages will gain significant traction to maximize our growth rate in the future, as the demand for our offerings may change, decrease substantially or dissipate, or we may fail to anticipate and serve user demands effectively.

Although our business has experienced periods of growth in recent years, there is no guarantee that our offerings will gain significant traction to maximize our growth rate in the future, as the demand for our products and services may change, decrease substantially or dissipate, or we may fail to anticipate and serve client demands effectively.

The loss of or a substantial reduction in activity by one or more of our largest customers and/or vendors could materially and adversely affect our business, financial condition and results of operations.

For Fiscal Years 2024 and 2023, two customers accounted for 20% and one customer accounted for 14% of revenue, respectively.

For Fiscal Years 2025 and 2024, two customers accounted for 22% and two customers accounted for 20% of revenue, respectively.

At December 31, 2025, three customers accounted for 57% of accounts receivable.

At December 31, 2024, three customers accounted for 45% of accounts receivable.

At December 31, 2024, two vendors accounted for 21% of accounts payable.

At December 31, 2025, one vendor accounted for 24% of accounts payable.

At December 31, 2024, two vendors accounted for 21% of accounts payable.

Our marketing and advertising efforts may fail to resonate with gamers and creators.

Our service offerings are or may be marketed through a diverse spectrum of advertising and promotional programs such as online and mobile advertising, marketing through websites, event sponsorship and direct communications with our user community including via email, blogs and other electronic means.

An increasing portion of our marketing activity is taking place on social media platforms that are either outside, or not totally within, our direct control.

Changes to user preferences, marketing regulations, privacy and data protection laws, technology changes or service disruptions may negatively impact our ability to reach target users and creators.

Our ability to market our service offerings is dependent in part upon the success of these programs.

If the marketing for our service offerings fails to resonate and expand with both the gamer and metaverse community, or if advertising rates or other media placement costs increase, our business and operating results could be harmed.

We have a unique community culture that is vital to our success.

Our operations may be materially and adversely affected if we fail to maintain this community culture as we expand in our addressable user communities.

We have cultivated an interactive and vibrant online social user community centered around online gaming and content creation.

We ensure a superior user experience by continuously improving the user interface and features of our platform along with offering a multitude of user experiences with first tier service offerings.

We believe that maintaining and promoting a vibrant community culture is critical to retaining and expanding our user community.

We have taken multiple initiatives to preserve our community culture and values.

Despite our efforts, we may be unable to maintain our community culture and cease to be the preferred platform for our target users and creators as we expand our footprint, which would be detrimental to our business operations.

The online gaming industry is very “ hit ” driven.

We may not have access to “ hit ” games or titles.

Select game titles and platforms dominate competitive online gaming and open world gaming, and many new games titles and platforms are regularly introduced in each major industry segment (console, mobile and PC free-to-download).

Despite the number of new entrants, only a very few “hit” titles or platforms account for a significant portion of total revenue in each segment.

The size and engagement level of our users are critical to our success and are closely linked to the quality and popularity of the game publishers with which we have licenses and the platforms on which we operate.

Game publishers on our platform, including those who have entered into license agreements with us, may leave us for other gaming platforms which may offer better competition, and terms and conditions than we do.

Furthermore, we may lose our licenses with certain game publishers if we fail to generate the number of gamers and creators expected by such publishers.

In addition, if popular game publishers cease to license their games to us, or our activities fail to attract gamers and creators, we may experience a decline in gamer traffic, direct to consumer opportunities and engagement, which may have a material and adverse impact on our results of operations and financial conditions.

Platforms on which we operate may modify or restrict our access to their platforms.

If we fail to license “hit” games or any of our existing licensed game publishers with which we currently have a license decide to breach the license agreement or choose not to continue with us once the term of the license agreement expires, or if platforms on which we operate modify or restrict our access, the popularity of our experiences and content generated across platforms may decline and the number of our users and creators may decrease, which could materially and adversely affect our results of operations and financial condition.

We have not entered into definitive license agreements with certain game publishers or platforms that we currently have relationships with, and we may never do so.

We currently do not have definitive license agreements in place with game publishers and platforms for the use of certain of the game titled played on our platform, as these publishers currently permit us to integrate the specifications of the game title with our technology.

We may not ever enter into license agreements with these parties in the future, instead continuing our relationship with these game publishers without a license agreement.

These game publishers may unilaterally choose to discontinue their relationship with the Company, thereby preventing us from offering experiences on our platform using their game titles, as the case may be.

Should those game publishers or platforms choose not to allow us to offer experiences involving their respective game titles to our users, the popularity of our experiences and competitions may decline and the number of our users and creators may decrease, which could materially and adversely affect our results of operations and financial condition.

If we fail to keep our existing users and creators highly engaged, and/or acquire new users and creators, our business, profitability and prospects may be adversely affected.

Our success depends on our ability to maintain and grow the number of users and creators using our platform, and keeping our users and creators highly engaged.

In order to attract, retain and engage users and creators and remain competitive, we must continue to develop and expand our product offerings, including internationally, implement new technologies and strategies, improve features of our platform and stimulate interactions in our user community.

A decline in the number of our users and creators in our ecosystem may adversely affect the engagement level of our users and creators, the vibrancy of our user community, or the popularity of our platform, which may in turn reduce our monetization opportunities, and have a material and adverse effect on our business, financial condition and results of operations.

We cannot assure you that our platform will remain sufficiently popular with users and creators to offset the costs incurred to operate and expand it.

It is vital to our operations that we remain sensitive and responsive to evolving user preferences and offer first-tier content that attracts our users and creators.

We must also keep providing users and creators with new features and functions to enable superior content viewing, and social interaction.

Further, we will need to continue to develop and improve our platform and to enhance our brand awareness, which may require us to incur substantial costs and expenses.

If such increased costs and expenses do not effectively translate into an improved user experience and direct to consumer-based, long-term engagement, our results of operations may be materially and adversely affected.

The ability to grow our business is dependent in part on the success and availability of mass media channels developed by third parties, as well as our ability to develop commercially successful content.

The success of our business is driven in part by the commercial success and adequate supply of third-party mass media channels for which we may distribute our content, including Twitch, YouTube and ESL.tv.

Our success also depends on our ability to accurately predict which channels and platforms will be successful with the online gaming community, our ability to develop commercially successful content and distribute such content, and our ability to effectively manage the transition of our users and creators from one generation or demographic to the next.

Additionally, we may enter into certain exclusive licensing arrangements that affect our ability to deliver or market our live and on-demand content on certain channels and platforms.

A channel or platform may not succeed as expected or new channels or platforms may take market share and users and creators away from platforms for which we have devoted significant resources.

If demand for the channels or platforms for which we are developing is lower than our expectations, we may be unable to fully recover the investments we have made, and our financial performance may be harmed.

Alternatively, a channel or platform for which we have not devoted significant resources could be more successful than we initially anticipated, causing us to not be able to take advantage of meaningful revenue opportunities.

Our marketing and advertising efforts may fail to resonate with brands and agencies.

Our service offerings are or may be marketed through a diverse spectrum of advertising and promotional programs such as online and mobile advertising, marketing through websites, event sponsorship and direct communications with our brand and agency contacts via email, blogs and other electronic means.

A portion of our marketing activity takes place on social media platforms that are either outside, or not totally within, our direct control.

Changes to user preferences, marketing regulations, privacy and data protection laws, technology changes or service disruptions may negatively impact our ability to reach target clients.

If advertising rates or other media placement costs increase, our business and operating results could be harmed.

The video game industry is less advanced than other digital content ecosystems with regard to advertising solutions.

There may not be enough spend from global brands to sustain our growth.

Brands and agencies have a level of expectation with regard to the features and functions required from the channels and platforms where they spend their marketing and advertising budgets.

The largest digital advertising ecosystems such as those created by Meta and Google provide these necessary features.

Video game companies, gaming platforms and the technology providers who provide third party solutions in the video game advertising space do not yet have equivalent functionality, creating hesitancy on behalf of brands and agencies to allocate significant regular spend within these channels.

We remain one of the leading companies continuing to educate brands and agencies about the opportunities and advancements within these channels and have expanded our offerings to include additional channels such as social media, digital video, and connected TV.

Nevertheless, brands and agencies may not elect to shift increasing levels of spend to video game platforms as rapidly as needed to support our growth and profitability objectives.

We have entered into partnership agreements with certain third parties or platforms that enhance our product offerings and capabilities.

Without the continuation of these partnerships, we may not be able to offer the same capabilities to our clients.

We have established formal partnerships with multiple third parties to expand the products and services we offer our brand and agency clients.

While we have certain protections with regard to our ability to maintain these relationships, these partners may choose to discontinue their relationship with the Company, thereby preventing us from offering the same products and services that currently generate a portion of our revenue.

Should those partners choose not to allow us to offer their solutions to our clients, certain clients may be less likely to choose the Company to implement their marketing and advertising programs, which could materially and adversely affect our results of operations and financial condition.

If we fail to maintain and enhance our brand/or if we incur excessive expenses in this effort, our business, results of operations and prospects may be materially and adversely affected.

We believe that maintaining and enhancing our brand is of significant importance to the success of our business.

A well-recognized brand is important to increasing the number of users and creators and the level of engagement of our overall user community which is critical in enhancing our attractiveness to advertisers and sponsors.

A well-recognized brand is important to increasing the number of brands and agencies who elect to engage us to implement their marketing and advertising programs.

Since we operate in a highly competitive market, brand maintenance and enhancement directly affect our ability to maintain and enhance our market position.

Although we have developed our brand through word of mouth referrals, and key strategic partners, as we expand, we may conduct various marketing and brand promotion activities using various methods to continue promoting our brand.

Although we have developed our brand through word of mouth referrals and key strategic partnerships, as we expand, we may conduct various marketing and brand promotion activities using various methods to continue promoting our brand.

We cannot assure you, however, that these activities will be successful or that we will be able to achieve the brand promotion effect we expect.

In addition, any negative publicity in relation to our service offerings, or operations, regardless of its veracity, could harm our brands and reputation.

Negative publicity or public complaints from users and creators may harm our reputation, and if complaints against us are not addressed to their satisfaction, our reputation and our market position could be significantly harmed, which may materially and adversely affect our business, results of operations and prospects.

Negative perceptions about our brand, or platforms, and/or business practices may damage our business and increase the costs incurred in addressing user concerns.

Expectations regarding the quality, performance and integrity of our service offerings are high.

Users and creators may be critical of our brand, platform, content, service offerings, and/or business practices for a wide variety of reasons.

These negative user reactions may not be foreseeable or within our control to manage effectively, including user reactions to content via social media or other outlets, components and services, or objections to certain of our business practices.

Negative user sentiment about our business practices also can lead to investigations from regulatory agencies and consumer groups, as well as litigation, which, regardless of their outcome, may be costly, damaging to our reputation and harm our business.

In addition, any negative publicity in relation to our service offerings, or operations, regardless of its veracity, could harm our brand and reputation, in which case our market position could be significantly harmed, which may materially and adversely affect our business, results of operations and prospects.

Technology changes rapidly in our business and if we fail to anticipate or successfully implement new technologies or adopt new business strategies, technologies or methods, the quality, timeliness and competitiveness of our offered services may suffer.

Rapid technology changes require us to anticipate, sometimes years in advance, which technologies we must develop, implement and take advantage of in order to be and remain competitive in both the content-creation and delivery market, social media markets, and the metaverse gaming market.

We have invested, and in the future may invest, in new business strategies including within metaverse gaming, a direct to consumer model, technologies, products, or games or first-tier game titles to continue to persistently engage the user and deliver the best user experience.

We have invested, and in the future may invest, in new business strategies including technologies, products, or games or first-tier game titles to continue to persistently engage the user and deliver the best user experience.

For example, if we are unable to react quickly to new technology trends—for example the continued growth of generative Artificial Intelligence (“AI”) solutions which disrupts the ways developers create experiences or may disrupt the way users consume virtual goods—it may harm our business and results of operation.

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Alternatively, we may be required to significantly increase the resources employed in research and development in an attempt to accelerate our development of new technologies, either to preserve our launch schedule or to keep up with our competitors, which would increase our development expenses.

Our new services and changes to existing services could fail to attract or retain users or generate revenue and profits.

Our ability to retain, increase, and engage our user base and to increase our revenue depends heavily on our ability to continue to evolve our existing services and to develop successful new services, both independently and in conjunction with developers or other third parties.

We may introduce significant changes to our existing services or acquire or introduce new and unproven services, including using technologies with which we have little or no prior development or operating experience.

For example, we do not have significant experience with virtual or augmented reality technology, which may adversely affect our ability to successfully develop and market our offerings within these technologies.

We continue to incur substantial costs, and we may not be successful in generating profits, in connection with these efforts.

In addition, the introduction of new services, or changes to existing services, may result in new or enhanced governmental or regulatory scrutiny, litigation, or other complications that could adversely affect our business and financial results.

We have also invested, and expect to continue to invest, significant resources in growing our service offerings to support increasing usage of such products.

If our new or enhanced services fail to engage users, marketers, or developers, or if our business plans are unsuccessful, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, and our business may be adversely affected.

We may not be successful in our metaverse gaming strategy and investments, which could adversely affect our business, reputation, or financial results.

We believe the metaverse, an embodied internet where people have immersive experiences beyond two-dimensional screens, is the next evolution in social technology.

Our business strategy focuses on offerings within metaverse gaming.

We expect this will be a complex, evolving, and long-term initiative that will involve the development of new and emerging technologies, continued investment in privacy, safety, and security efforts, and collaboration with other companies, developers, partners, and other participants.

However, the metaverse may not develop in accordance with our expectations, and market acceptance of features, products, or services we build for the metaverse is uncertain.

In addition, we have limited experience with virtual and augmented reality technology, which may enable other companies to compete more effectively than us.

We may be unsuccessful in our research and product development efforts, including if we are unable to develop relationships with key participants in metaverse gaming or develop products that operate effectively with metaverse gaming technologies, products, systems, networks, or standards.

Our metaverse gaming efforts may also divert resources and management attention from other areas of our business.

In addition, as our metaverse gaming efforts evolve, we may be subject to a variety of existing or new laws and regulations in the United States and international jurisdictions, including in the areas of privacy and e-commerce, which may delay or impede the development of our products and services, increase our operating costs, require significant management time and attention, or otherwise harm our business.

As a result of these or other factors, our metaverse gaming strategy and investments may not be successful in the foreseeable future, or at all, which could adversely affect our business, reputation, or financial results.

We focus our business on our developers, creators, and users, and acting in their interests in the long-term may conflict with the short-term expectations of analysts and investors.

A significant part of our business strategy and culture is to focus on long-term growth and developer, creator, and user experience over short-term financial results.

We expect our expenses to continue to increase in the future as we broaden our developer, creator, and user community, as developers, creators, and users increase the amount and types of content they make available on our platform and the content they consume, as we continue to seek ways to increase payments to our developers, and as we develop and further enhance our platform, expand our technical infrastructure, and hire additional employees to support our expanding operations.

As a result, in the near- and medium-term, we may continue to operate at a loss, or our near- and medium-term profitability may be lower than it would be if our strategy were to maximize near- and medium-term profitability.

We expect to continue making significant expenditures to grow our platform and develop new features, integrations, capabilities, and enhancements to our platform for the benefit of our developers, creators, and users.

Such expenditures may not result in improved business results or profitability over the long-term.

If we are ultimately unable to achieve or improve profitability at the level or during the time frame anticipated by securities or industry analysts, investors and our stockholders, the trading price of our common stock may decline.

We may experience security breaches and cyber threats.

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As a result, our reputation and brand may be harmed, we could incur substantial costs, and we could lose both users and creators and revenue.

We depend on servers to operate our service offerings with online features and our proprietary online platform.

If we were to lose server functionality for any reason, our business may be negatively impacted.

Our business relies on the continuous operation of servers, some of which are owned and operated by third parties.

Although we strive to maintain more than sufficient server capacity, and provide for active redundancy in the event of limited hardware failure, any broad-based catastrophic server malfunction, a significant service-disrupting attack or intrusion by hackers that circumvents security measures, a failure of disaster recovery service or the failure of a company on which we are relying for server capacity to provide that capacity for whatever reason could degrade or interrupt the functionality of our platform, and could prevent the operation of our platform for both in-person and online user experiences.

We also rely on networks operated by third parties to support content on our platform, including networks owned and operated by game publishers.

An extended interruption to any of these services could adversely affect the use of our platform, which would have a negative impact on our business.

Further, insufficient server capacity could also negatively impact our business.

Conversely, if we overestimate the amount of server capacity required by our business, we may incur additional operating costs.

Our advertising revenue is dependent on targeting and measurement tools that incorporate data signals from user activity on websites and services that we do not control, and changes to the regulatory environment, third-party mobile operating systems and browsers, and our own products have impacted, and we expect will continue to impact, the availability of such signals, which will adversely affect our advertising revenue.

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If we are unable to mitigate these developments as they take further effect in the future, our targeting and measurement capabilities may be materially and adversely affected, which would in turn significantly impact our future revenue growth.

Our online platform and services offered through our platform may contain defects.

Our online platform and the services offered through our platform are extremely complex and are difficult to develop and distribute.

We have quality controls in place to detect defects in our platform before they are released.

Nonetheless, these quality controls are subject to human error, overriding, and reasonable resource or technical constraints.

Further, we have not undertaken independent third-party testing, verification or analysis of our platform and associated systems and controls.

Therefore, our platform and quality controls and preventative measures we have implemented may not be effective in detecting all defects in our platform.

In the event a significant defect in our platform and associated systems and controls is realized, we could be required to offer refunds, suspend the availability of our service offerings, or expend significant resources to cure the defect, each of which could significantly harm our business and operating results.

We may experience system failures, outages and/or disruptions of the functionality of our platform.

Such failures, delays and other problems could harm our reputation and business, cause us to lose customers and expose us to customer liability.

We may experience system failures, outages and/or disruptions of our infrastructure, including information technology system failures, network disruptions, and cloud hosting and broadband disruptions.

Our operations could be interrupted or degraded by any damage to or failure of:

Such failures, delays and other problems could harm our reputation and business, cause us to lose customers and potentially expose us to customer liability.

We may experience system failures, outages and/or disruptions, and our operations could be interrupted or degraded by any damage to or failure of:

our computer software or hardware, or our customers’ or suppliers’ computer software or hardware;

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errors by our employees or third-party service providers.

From time to time in the ordinary course of our business, our network nodes and other systems experience temporary outages.

As a means of ensuring continuity in the services we provide to our community and partners, we have invested in system redundancies via partnerships with industry leading cloud service providers, proactive alarm monitoring and other back-up infrastructure, though we cannot assure you that we will be able to re-route our services over our back-up facilities and provide continuous service to customers in all circumstances without material degradation.

Because many of our services play a critical role for our community and partners, any damage to or failure of the infrastructure we rely on could disrupt or degrade the operation of our network, our platform and the provision of our services and result in the loss of current and potential community members and/or partners and harm our ability to conduct normal business operations.

We use third-party services and technologies in connection with our business, and any disruption to the provision of these services and technologies to us could result in negative publicity and a slowdown in the growth of our users, which could materially and adversely affect our business, financial condition and results of operations.

Our business partially depends on services provided by, and relationships with, various third parties, including cloud hosting and broadband providers, among others.

To this end, when our cloud hosting and broadband vendors experience outages, our services will be negatively impacted and alternative resources will not be immediately available.

In addition, certain third-party software we use in our operations is currently publicly available free of charge.

If the owner of any such software decides to charge users or no longer makes the software publicly available, we may need to incur significant costs to obtain licensing, find replacement software or develop it on our own.

If we are unable to obtain licensing, find or develop replacement software at a reasonable cost, or at all, our business and operations may be adversely affected.

We exercise no control over the third-party vendors that we rely upon for cloud hosting, broadband and software service.

If such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with us, we could suffer service interruptions, reduced revenues or increased costs, any of which may have a material adverse effect on our business, financial condition and results of operations.

If we are unable to successfully grow our user base, compete effectively with other platforms, and further monetize our platform, our business will suffer.

We have made, and are continuing to make, investments to enable our developers to design and build compelling content and deliver it to our users on our platform.

Existing and prospective developers may not be successful in creating content that leads to and maintains user engagement (including maintaining the quality of experiences) or they may fail to expand the types of experiences that our developers can build for users, and other global entertainment companies, online content platforms, and social platforms may entice our users and potential users away from, or to spend less time with, our platform, each of which could adversely affect users’ interest in our platform and lead to a loss of revenue opportunities and harm our results of operations.

Additionally, we may not succeed in further monetizing our platform and user base.

As a result, our user growth, user engagement, financial performance and ability to grow revenue could be significantly harmed if:

we fail to increase or maintain KPIs;

our user growth outpaces our ability to monetize our users, including if our user growth occurs in markets that are not profitable;

we fail to establish a base of our developers, creators, and users;

we fail to provide the tools and education to our developers and creators to enable them to monetize their experiences;

we fail to increase or maintain the amount of time spent on our platform, the number of experiences that our users share and explore with friends, or the usage of our technology for our developers;

we do not develop and establish the social features of our platform, allowing it to more broadly serve the entertainment, education, and business markets;

we fail to increase penetration and engagement across target age demographics;

developers do not create engaging or new experiences for users;

users reduce their subscriptions for our services within our platform;

the experiences on our platform do not maintain or gain popularity.

If we are able to continue to grow, we will need to manage our growth effectively, which could require expanding our internal IT systems, technological operations infrastructure, financial infrastructure, and operating and administrative systems and controls.

In addition, we have expended in the past and may in the future expend significant resources to launch new features and changes on our platform that we are unable to monetize, which may significantly harm our business.

Any future growth would add complexity to our organization and require effective coordination across our organization, and an inability to do so would adversely affect our business, financial conditions and results of operations.

We may provide access to offerings within our platform that are subscription-based.

While we intend for these efforts to generate increased recurring revenues from our existing user base, they may cause users to decrease their overall spend on our platform.

Our ability to attract and retain users of paid subscription services will depend in part on our ability to consistently provide subscribers with a quality experience.

If our users do not perceive these offerings to be of value, or if we introduce new or adjust existing features or pricing in a manner that is not favorably received by them, we may not be able to attract and retain subscribers or be able to convince users to become subscribers of such additional service offerings, and we may not be able to increase the amount of recurring revenue from our user base.

Subscribers may cancel their subscription to our service for many reasons, including a perception that they do not use the service sufficiently, the need to reduce household expenses, competitive services that provide a better value or experience or as a result of changes in pricing.

If our efforts to attract and retain subscribers are not successful, our business, operating results, and financial condition may be adversely impacted.

We have seen the growth rate of our users fluctuate and expect it to continue to change over time.

If we fail to retain users or add new users, or if our users decrease their level of engagement with our platform, revenue, bookings, and operating results will be harmed.

We believe we have successfully iterated our business model through market insights, and our organic and inorganic growth to establish scale and ultimately drive our monetization strategies.

Our strong and growing product-market fit currently reaches over 100 million monthly unique players in Roblox, Minecraft and Fortnite and generates over one billion monthly impressions.

We view our key performance Indicators (“KPIs”) as a critical measure of our user engagement, and adding, maintaining, and engaging users has been and will continue to be necessary to our continued growth.

Our KPI growth rate has fluctuated in the past and may slow in the future due to various factors.

As COVID-19 related shelter-in-place orders lifted and children returned to school, we saw growth rates moderate in certain markets.

Other factors including:

the introduction of new experiences on our platform, higher market penetration rates, and competition from a variety of entertainment sources for our users and their time could also cause our growth rates to fluctuate.

For example, while our KPIs have grown on a quarterly basis for the last several years, there have been months where they have not or have grown at a slower pace, often due to seasonal or other factors.

Seasonal factors may have been impacted by the COVID-19 pandemic and we expect that seasonality could again cause user activity to decrease, including below historical levels as the impacts of the COVID-19 pandemic moderate.

In addition, our strategy seeks to expand the age groups and geographic markets that make up our users, and if and when we achieve maximum market penetration rates among any particular user cohort overall and in particular geographic markets, future growth in KPIs will need to come from other age or geographic cohorts in other markets, which may be difficult, costly or time consuming for us to achieve.

Accessibility to the internet and bandwidth or connectivity limitations as well as regulatory requirements, may also affect our ability to further expand our user base in a variety of geographies.

If our KPI growth rate slows or becomes stagnant, or we have a decline in KPIs, or we fail to effectively monetize users in certain geographic markets, our financial performance will increasingly depend on our ability to elevate user activity or increase the monetization of our users.

Our business plan assumes that the demand for interactive entertainment offerings, specifically, the adoption of a metaverse with users interacting together by playing, communicating, connecting, making friends, learning, or simply hanging out, all in 3D environments, will increase for the foreseeable future.

However, if this market shrinks or grows more slowly than anticipated, if the metaverse does not gain widespread adoption as a forum for experiences, social interaction and creative expression for our users, or if demand for our platform does not grow as quickly as we anticipate, whether as a result of competition, product obsolescence, budgetary constraints of our developers, creators, and users, technological changes, unfavorable economic conditions, uncertain geopolitical or regulatory environments or other factors, we may not be able to increase our revenue and bookings sufficiently to ever achieve profitability and our stock price would decline.

The multitude of other entertainment options, online gaming, and other interactive experiences is high, making it difficult to retain users who are dissatisfied with our platform and seek other entertainment options.

Moreover, a large number of our users are within a demographic which may be less brand loyal and more likely to follow trends, including viral trends, than other demographics.

These and other factors may lead users to switch to another entertainment option rapidly, which can interfere with our ability to forecast usage or KPIs and would negatively affect our user retention, growth, and engagement.

We also may not be able to penetrate other demographics in a meaningful manner to compensate for the loss of KPIs in this age group.

Falling user retention, growth, or engagement rates could seriously harm our business.

Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may significantly harm and negatively affect our reputation and our business.

We regularly review metrics and KPIs, including monthly unique players and monthly impressions to evaluate growth trends, measure our performance, and make strategic decisions.

These metrics are calculated using internal data gathered on an analytics platform that we developed and operate and have not been validated by an independent third party.

Our metrics and estimates may also differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology or the assumptions on which we rely.

If our estimates are inaccurate, then investors will have less confidence in our company and our prospects, which could cause the market price of our common stock to decline, our reputation and brand could be harmed.

While these metrics are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our service offerings are used and as a result, the metrics may overstate the number of monthly unique players and monthly impressions.

For example, there may be users who have multiple accounts, fake user accounts, or fraudulent accounts created by bots to inflate user activity for a particular developer or creator, thus making the developer or creator’s experience or other content appear more popular than it really is.

We strive to detect and minimize fraud and unauthorized access to our service offerings, and these practices are prohibited in our terms of service and we implement measures to detect and suppress that behavior.

Some of our demographic data may be incomplete or inaccurate.

For example, because users self-report their dates of birth, our age demographic data may differ from our users’ actual ages.

If our users provide us with incorrect or incomplete information regarding their age or other attributes, then our estimates may prove inaccurate.

Errors or inaccuracies in our metrics or data could also result in incorrect business decisions and inefficiencies.

For instance, if a significant understatement or overstatement of active users were to occur, we may expend resources to implement unnecessary business measures or fail to take required actions to attract a sufficient number of users to satisfy our growth strategies.

If our developers do not perceive our user, geographic, or other demographic metrics to be accurate representations of our user base, or if we discover material inaccuracies in our user, geographic, or other demographic metrics, our reputation may be seriously harmed.

Our developers, creators and partners may also be less willing to allocate their budgets or resources to our service offerings, which could seriously harm our business.

Growth and engagement of our user community depends upon effective interoperability with mobile operating systems, networks, mobile devices and standards that we do not control.

We make our services available across a variety of mobile operating systems and devices.

We are dependent on the interoperability of our services with popular mobile devices and mobile operating systems that we do not control, such as Android and iOS.

Any changes in such mobile operating systems or devices that degrade the functionality of our services or give preferential treatment to competitive services could adversely affect usage of our services.

In order to deliver high quality services, it is important that our services work well across a range of mobile operating systems, networks, mobile devices and standards that we do not control.

We may not be successful in developing relationships with key participants in the mobile industry or in developing services that operate effectively with these operating systems, networks, devices and standards.

In the event that it is difficult for our users to access and use our services, particularly on their mobile devices, our user growth and user engagement could be harmed, and our business and operating results could be adversely affected.

Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and our business operations may be severely disrupted if we lose their services.

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system failures or actual or perceived breaches or other incidents relating to privacy or cybersecurity;

adverse litigation judgments, settlements, or other litigation and dispute-related costs;

adverse litigation judgements, settlements, or other litigation and dispute-related costs;

adverse media coverage or unfavorable publicity;

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You should take into account the risks and uncertainties frequently encountered by companies in rapidly evolving market segments.

We plan to continue to make acquisitions and pursue other strategic transactions, which could require significant management attention, disrupt our business, dilute our stockholders, impact our financial condition or results of operations, significantly harm our business, and adversely affect the price of our common stock.

As part of our business strategy, we have made and intend to continue to make acquisitions to add specialized employees and complementary companies, products, or technologies, and from time to time may enter into other strategic transactions such as investments and joint ventures.

We may continue to make acquisitions and pursue other strategic transactions, which could require significant management attention, disrupt our business, dilute our stockholders, impact our financial condition or results of operations, significantly harm our business, and adversely affect the price of our common stock.

As part of our business strategy, we have made and may continue to make acquisitions to add specialized employees and complementary companies, products, or technologies, and from time to time may enter into other strategic transactions such as investments and joint ventures.

We may not be able to find suitable acquisition candidates, and we may not be able to complete acquisitions or other strategic transactions on favorable terms, or at all, including as a result of regulatory challenges.

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Furthermore, it generally takes several months after the closing of an acquisition to finalize the purchase price allocation.

Therefore, it is possible that our valuation of an acquisition may change and result in unanticipated write-offs or charges, impairment of our goodwill, or a material change to the fair value of the assets and liabilities associated with a particular acquisition, any of which would affect our consolidated balance sheet and could significantly harm our business.

Acquisitions or other strategic transactions may also result in our recording of significant additional expenses to our results of operations and recording of substantial finite-lived intangible assets on our consolidated balance sheet upon closing.

Therefore, it is possible that our valuation of an acquisition may change and result in unanticipated write-offs or charges, impairment of our goodwill, or a material change to the fair value of the assets and liabilities associated with a particular acquisition, any of which would affect our balance sheet and could significantly harm our business.

Any of these factors may adversely affect our financial condition or results of operations.

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difficulties in managing the expanded operations of a significantly larger and more complex business;

contingent liabilities, including contingent tax liabilities or litigation, that may be larger than expected;

contingent liabilities, including contingent tax liabilities or litigation, which may be larger than expected;

potential unknown liabilities, adverse consequences or unforeseen increased expenses associated with an acquisition, including possible adverse tax consequences to the combined business pursuant to changes in applicable tax laws or regulations.

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If we are not able to successfully integrate an acquisition, if we incur significantly greater costs to achieve the expected synergies than we anticipate or if activities related to the expected synergies have unintended consequences, our business, financial condition or results of operations could be adversely affected.

The preparation of our financial statements involves the use of good faith estimates, judgments and assumptions, and our financial statements may be materially affected if such good faith estimates, judgments or good faith assumptions prove to be inaccurate .

Financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) typically require the use of good faith estimates, judgments and assumptions that affect the reported amounts.

Often, different estimates, judgments and assumptions could reasonably be used that would have a material effect on such consolidated financial statements, and changes in these estimates, judgments and assumptions may occur from period to period over time.

The preparation of our financial statements involves the use of good faith estimates, judgements and assumptions, and our financial statements may be materially affected if such good faith estimates, judgements or good faith assumptions prove to be inaccurate .

Financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) typically require the use of good faith estimates, judgements and assumptions that affect the reported amounts.

Often, different estimates, judgements and assumptions could reasonably be used that would have a material effect on such financial statements, and changes in these estimates, judgements and assumptions may occur from period to period over time.

Significant areas of accounting requiring the application of management’s judgment include, but are not limited to, determining the fair value of assets, share-based compensation and the timing and amount of cash flows from assets.

These estimates, judgments and assumptions are inherently uncertain and, if our estimates were to prove to be wrong, we would face the risk that charges to income or other financial statement changes or adjustments would be required.

Any such charges or changes would require a restatement of our consolidated financial statements and could harm our business, including our financial condition and results of operations and the price of our securities.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the accounting estimates, judgments and assumptions that we believe are the most critical to an understanding of our consolidated financial statements and our business.

We are currently dependent on certain game publishers and online game platforms for a substantial portion of our revenue.

In the event such publishers or online platforms change their terms and conditions impacting our ability to deploy advertising campaigns on their platforms, or otherwise engage in direct-to-consumer offers, our business, growth prospects and financial condition could be adversely affected.

We currently generate a substantial portion of our revenue from in-game platform advertising and direct to consumer offers, including digital subscriptions, in-game digital goods, and gameplay access fees, on various metaverse gaming platforms.

Additional revenue is generated through our owned and operated properties, along with properties we operate on behalf of others.

In the event such game publishers or online game platforms change their current terms and conditions in a manner that limits our ability to deploy advertising campaigns or otherwise engage in direct-to-consumer offers through our partner’s metaverse gaming platforms, or our owned and operated properties, our business, growth prospects and financial condition could be adversely affected.

These estimates, judgements and assumptions are inherently uncertain and, if our estimates were to prove to be wrong, we would face the risk that charges to income or other financial statement changes or adjustments would be required.

Any such charges or changes would require a restatement of our financial statements and could harm our business, including our financial condition and results of operations and the price of our securities.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the accounting estimates, judgements and assumptions that we believe are the most critical to an understanding of our financial statements and our business.

Regulatory and Legal Risk Factors

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Our analysis and interpretation of this legislation is ongoing.

Given the full valuation allowance provided for net deferred tax assets for the periods presented herein, the change in tax law did not have a material impact on our consolidated financial statements provided herein.

Given the full valuation allowance provided for net deferred tax assets for the periods presented herein, the change in tax law did not have a material impact on our financial statements provided herein.

There may, however, be additional tax impacts identified in subsequent fiscal periods in accordance with subsequent interpretive guidance issued by the SEC or the Internal Revenue Service.

Further, there may be other material adverse effects resulting from the legislation that we have not yet identified.

No estimated tax provision has been recorded in the consolidated financial statements included herein for tax attributes that are incomplete or subject to change.

No estimated tax provision has been recorded in the financial statements included herein for tax attributes that are incomplete or subject to change.

The foregoing items could have a material adverse effect on our business, cash flow, financial condition or results of operations.

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The interpretation and application of many privacy and data protection laws are, and will likely remain, uncertain, and it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or product features.

Although player interaction on our platform is subject to our privacy policies, end user license agreements (“EULAs”), and terms of service, if we fail to comply with our posted privacy policies, EULAs, or terms of service, or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our financial condition and/or harm our business.

Although player interaction on our platform is subject to our privacy policies, end user license agreements (“EULAs”), and terms of service, if we fail to comply with our posted privacy policies, EULAs, or terms of service, or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgements against us, damage our reputation, impact our financial condition and/or harm our business.

In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us.

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Finally, in addition to those who may claim priority, any of our pending patent and trademark applications may also be challenged by others on the basis that they are otherwise invalid or unenforceable.

Risks Relating to our Indebtedness

We have a significant amount of fixed obligations and indebtedness and we have incurred, and may incur in the future, significant additional debt, that could impair our liquidity and thereby harm our business, results of operations and financial condition.

As of December 31, 2024, we have an aggregate principal amount of indebtedness of approximately $4.7 million, which consists of borrowings under (i) that certain Business Loan and Security Agreement with Agile Capital Funding, LLC, and Agile Lending, LLC (the “Agile Agreement”), (ii) that certain Note Purchase Agreement with a non-employee member of the board of directors of the Company (the “Director Agreement”), (iii) that certain unsecured promissory note issued by the Company to the Founders (as defined at Note 5, “Acquisitions” elsewhere herein) in connection with the remaining Super Biz Second Earn Out Period accrued contingent consideration outstanding and (iv) that certain Financing and Security Agreement with SLR Digital Finance, LLC (the “SLR Agreement”, and collectively with the Agile Agreement and Director Agreement, the “ Loan Agreements ”).

In addition, we have entered into additional debt agreements as described at Note 12 to the consolidated financial statements.

Our ability to pay the fixed and other costs associated with our contractual obligations will depend on our operating performance, cash flow and our ability to secure adequate financing, which will in turn depend on, among other things, the success of our current business strategy, market volatility, weakening or improvement in the U.S.

economy, as well as general economic and political conditions and other factors that are beyond our control.

From time to time and subject to market conditions and any applicable contractual requirements, we may refinance portions of our debt, including our debt maturing in 2025, which, at current interest rates and market conditions, may negatively impact our interest expense or result in higher dilution.

The amount of our fixed obligations, our obligations under our other debt arrangements, and the related need to obtain financing could have a material adverse effect on our business, results of operations and financial condition and could:

require a substantial portion of cash flow from operations for payments of principal and interest on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

limit our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate or other expenses, or to refinance existing indebtedness;

make it more difficult for us to pay our other obligations as they become due during adverse general economic and market industry conditions because any related decrease in revenues could cause us to have insufficient cash flows from operations to make our scheduled payments, increasing our vulnerability to downturns and adverse developments;

reduce our flexibility in planning for, or reacting to, changes in our business and the airline industry and, consequently, place us at a competitive disadvantage to our competitors with fewer fixed payment obligations or which are subject to fewer limitations or restrictions;

limit our ability to pay dividends and repurchase shares.

A failure to pay our debt and other fixed cost obligations or a breach of our contractual obligations could result in a variety of adverse consequences, including the exercise of remedies by our creditors.

In such a situation, it is unlikely that we would be able to cure our breach, fulfill our obligations, make required lease or debt payments or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.

Despite our current indebtedness levels, we may incur additional indebtedness in the future, which could further increase the risks associated with our leverage and exacerbate the risks described above, especially in the current interest rate environment.

We may be able to incur substantial additional indebtedness in the future, subject to compliance with certain covenants in the Loan Agreements.

While our debt agreements do prohibit us from incurring additional unsecured indebtedness or certain secured indebtedness (subject to certain carve-outs as specified in the underlying agreements), our creditors can waive such prohibitions.

If our creditors agree to waive such prohibitions and such additional indebtedness is incurred in the future, our debt service obligations will increase.

The more leveraged we become, the more we will be exposed to the risks created by our current substantial indebtedness.

To the extent that the terms of our current or future debt agreements would prevent us from incurring additional indebtedness, we may be able to obtain amendments to those agreements that would allow us to incur such additional indebtedness, and such additional indebtedness could be material.

Should we incur additional debt or such other obligations, the risks associated with our substantial debt described herein, including our possible inability to service and meet our debt or other obligations, would increase.

Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and may detract from our performance to the extent we are exposed to such interest rates and/or volatility.

In periods of rising interest rates, such as the current interest rate environment, to the extent we borrow money subject to a floating interest rate, our operating costs would increase, which could reduce our net income.

For additional information, refer to Note 6, “Debt” elsewhere herein.

Restrictive covenants in our Loan Agreements may limit our financial and operating flexibility, which may adversely affect our business and liquidity.

Furthermore, the Loan Agreements provide our lenders with a first-priority lien against substantially all of our assets which, in the event of a default, would adversely affect our results of operations

The Loan Agreements governing our indebtedness contain certain restrictions, which may have adverse effects on our business, financial condition or results of operations.

Such restrictions include a number of covenants that limit our and our subsidiaries’ ability to, among other things, incur additional indebtedness, materially change our business, convey, sell, lease, transfer or dispose of the business or our property, except under certain circumstances, merge or consolidate with other companies or acquire other companies, create or incur liens, pay any dividends on our common stock, make certain investments and engage in certain other activities.

As a result of these restrictions, we may be limited in how we conduct our business, in our ability to compete effectively or in our ability to implement changes or take advantage of business opportunities-including by making strategic acquisitions, investments or alliances, restructuring our organization or financing capital needs-that would be in our interest.

We may also be unable to raise additional indebtedness or equity financing to operate during general economic or business downturns.

While we were in compliance with our debt covenants as of December 31, 2024, we may not be able to maintain compliance with the covenants in the future.

A failure by us to comply with the covenants or payment requirements specified in the Loan Agreements could result in an event of default under the agreement, which would give the lender the right to declare any and all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable.

In addition, the lender would have the right to proceed against the collateral in which we granted a security interest to them, which consists of substantially all our assets.

If the debt under our Loan Agreements were to be accelerated, we will likely not have sufficient cash or be able to borrow sufficient funds to refinance the debt or sell sufficient assets to repay the debt, which would adversely affect our cash flows, business, results of operations and financial condition.

Further, the terms of any new or additional financing may be on terms that are more restrictive or on terms that are less desirable to us.

Any of the foregoing actions could have a material adverse effect on our business, financial condition, results of operations and liquidity.

We have substantial indebtedness and may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy the obligations under our indebtedness, which may not be successful.

Our earnings and cash flow could vary significantly from year to year due to the nature of our industry.

As a result, the amount of debt that we can manage in some periods may not be appropriate for us in other periods.

Additionally, our future cash flow may be insufficient to meet our debt obligations and other commitments at that time.

Any insufficiency could negatively impact our business.

A range of economic, competitive, business and industry factors will affect our future financial performance, and, as a result, our ability to generate cash flow from operations and to pay our debt obligations.

Many of these factors, such as access to capital, economic and financial conditions in our industry and the global economy and initiatives of our competitors, are beyond our control as discussed in this “ Risk Factors ” section.

We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

Payment of interest on, and repayment of principal of, our indebtedness is dependent in part on cash flow generated by our subsidiaries.

Payment of interest on, and repayment of, principal of our indebtedness will be dependent in part upon cash flow generated by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment, or otherwise.

Our subsidiaries may not be able to, or be permitted to, make distributions to enable us to make payments in respect of our indebtedness.

Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.

In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.

In addition, any payment of interest, dividends, distributions, loans, or advances by our subsidiaries to us could be subject to restrictions on dividends or repatriation of distributions under applicable local law, monetary transfer restrictions, and foreign currency exchange regulations in the jurisdictions in which the subsidiaries operate or under arrangements with local partners.

Furthermore, the ability of our subsidiaries to make such payments of interest, dividends, distributions, loans, or advances may be contested by taxing authorities in the relevant jurisdictions.

We may be unable to refinance our debt on terms favorable to us or at all, which would negatively impact our business and financial condition.

We are subject to risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest.

While we may refinance all or some of our indebtedness before it matures, there can be no assurance that we will be able to refinance any maturing indebtedness, that such refinancing will be on terms as favorable to us as the terms of the maturing indebtedness or, if the indebtedness cannot be refinanced, that we will be able to otherwise obtain funds by selling assets or raising equity to make required payments on our maturing indebtedness.

Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase.

If we are unable to refinance our indebtedness at or before maturity or otherwise meet our payment obligations, our business and financial condition will be negatively impacted, and we may be in default under our indebtedness.

Any default under our Loan Agreements would permit lenders to foreclose on our assets, which may also result in the acceleration of that indebtedness.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.”

Governance Risks and Risks Related to our Common Stock

We received a notice from Nasdaq that our common stock may be delisted from trading on the Nasdaq Capital Market if we fail to comply with the continued listing requirements, including the minimum bid price requirement and annual meeting requirement.

A delisting of our common stock is likely to reduce the liquidity of our common stock and may inhibit or preclude our ability to raise additional financing.

We are required to comply with certain Nasdaq continued listing requirements, including a minimum bid price for our common stock, as well as a series of financial tests relating to stockholder equity, market value of listed securities and number of market makers and stockholders.

If we fail to maintain compliance with any of those requirements, our common shares could be delisted from Nasdaq.

On January 2, 2025, we received a letter (the “ Bid Price Letter ”) from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of the Company’s Common Stock, for the last 30 consecutive business days, the Company is not currently in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).

On January 3, 2025, the Company received a letter (the “ Annual Meeting Letter ”) from Nasdaq indicating that the Company no longer complies with Listing Rule 5620(a) (the “ Annual Meeting Rule ”) since it did not hold an annual meeting of stockholders within twelve months of the end of the Company’s fiscal year ended December 31, 2023.

The Company intends to monitor the closing bid price of its Common Stock.

To regain compliance with Nasdaq Listing Rule 5550(a)(2), the closing bid price of the Company's Common Stock must be at least $1.00 per share for 10 consecutive business days during the 180-day period from January 2, 2025 to July 1, 2025.

If the Company does not regain compliance with the minimum bid price requirement by July 1, 2025, Nasdaq may grant the Company a second 180-day period to regain compliance.

To qualify for this additional 180-day compliance period, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, other than the minimum bid price requirement.

In addition, the Company would also be required to notify Nasdaq of its intent to cure the minimum bid price deficiency by effecting a reverse stock split, if necessary.

If the Company does not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company's Common Stock will be subject to delisting.

The Company would then be entitled to appeal that determination to a Nasdaq hearings panel.

To regain compliance with the Annual Meeting Rule, the Company prepared and submitted a plan of compliance (due within 45 calendar days from receipt of the formal notice) to Nasdaq of which we are awaiting a response from Nasdaq.

There is no guaranty that Nasdaq will accept our plan of compliance.

If, for any reason, Nasdaq should delist our common stock from trading on its exchange and we are unable to obtain listing on another national securities exchange or take action to restore our compliance with the Nasdaq continued listing requirements, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders:

the liquidity of our common stock;

the market price of our common stock;

we will become a “penny stock”, which will make trading of our common stock much more difficult;

our ability to obtain financing for the continuation of our operations;

the number of institutional and general investors that will consider investing in our common stock;

the number of investors in general that will consider investing in our common stock;

the number of market makers in our common stock;

the availability of information concerning the trading prices and volume of our common stock;

the number of broker-dealers willing to execute trades in shares of our common stock.

Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us.

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Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.

Although our common stock is listed on the Nasdaq Capital Market, our shares are likely to be thinly traded for some time and an active market may never develop.

Although our common stock is listed on the Nasdaq Capital Market, it is likely that initially there will be a very limited trading market for our common stock, and we cannot ensure that a robust trading market will ever develop or be sustained.

Our shares of common stock may be thinly traded, and the price, if traded, may not reflect our actual or perceived value.

Although our common stock is listed on the Nasdaq Capital Market, our shares may be thinly traded at times and an active market may never develop.

Although our common stock is listed on the Nasdaq Capital Market, our shares of common stock may be thinly traded at times, and the price may not reflect our actual or perceived value.

There can be no assurance that there will be an active market for our shares of common stock in the future.

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Our stock price may be volatile, and you could lose all or part of your investment.

The trading price of our common stock may fluctuate substantially and may be higher or lower than the initial public offering price.

The trading price of our common stock may fluctuate substantially.

This may be especially true for companies with a small public float.

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Our Board has the authority to cause us to issue, without any further vote or action by the stockholders, up to an additional 6,545,580 shares of preferred stock in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series.

As of March 28, 2025, we had the following shares of Preferred Stock outstanding:

(i) zero shares of Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred”);

(ii) zero shares of Series A-2 Convertible Preferred Stock, par value $0.001 per share (the “Series A-2 Preferred”);

(iii) zero shares of Series A-3 Convertible Preferred Stock, par value $0.001 per share (the “Series A-3 Preferred”);

(iv) zero shares of Series A-4 Convertible Preferred Stock, par value $0.001 per share (the “Series A-4 Preferred”);

(v) zero shares of Series A-5 Convertible Preferred Stock, par value $0.001 per share (the “Series A-5 Preferred”), (vi) 3,699 shares of Series AA Convertible Preferred Stock, par value $0.001 per share (the “Series AA Preferred”);

(vii) zero shares of Series AA-2 Convertible Preferred Stock, par value $0.001 per share (the “Series AA-2 Preferred”);

(viii) 25 shares of Series AA-3 Convertible Preferred Stock, par value $0.001 per share (the “Series AA-3 Preferred”);

(ix) 500 shares of Series AA-4 Convertible Preferred Stock, par value $0.001 per share (the “Series AA-4 Preferred”);

(x) 50 shares of Series AA-5 Convertible Preferred Stock, par value $0.001 per share (the “Series AA-5 Preferred”), (xi) 7,345 shares of Series AAA Convertible Preferred Stock, par value $0.001 per share (the “Series AAA Preferred”);

and (xii) 3,148 shares of Series AAA-2 Convertible Preferred Stock, par value $0.001 per share (the “Series AAA-2 Preferred”);

(xiii) 365 shares of Series AAA Junior Convertible Preferred Stock, par value $.001 per share (the “Series AAA JR Preferred”);

(xiv) 441 shares of Series AAA-2 Junior Convertible Preferred Stock, par value $.001 per share (the “Series AAA-2 JR Preferred”);

(xv) 697 shares of Series AAA-3 Junior Convertible Preferred Stock, par value $.001 per share (the “Series AAA-3 JR Preferred”);

and (xvi) 399 shares of Series AAA-4 Junior Convertible Preferred Stock, par value $0.001 per share (the “Series AAA-4 JR Preferred”, and, collectively with the Series A Preferred, Series A-2 Preferred, Series A-3 Preferred, Series A-4 Preferred, Series A-5 Preferred, Series AA Preferred, Series AA-2 Preferred, Series AA-3 Preferred, Series AA-4 Preferred, Series AA-5 Preferred, Series AAA Preferred, Series AAA-2 Preferred, Series AAA JR Preferred, Series AAA-2 JR Preferred, Series AAA-3 JR Preferred, and Series AAA-4 JR Preferred (the “Preferred Stock”).

As of March 31, 2026, we had Preferred Stock outstanding as summarized at Note 7.

The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive.

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The issuance of shares of preferred stock may also have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares.

The holders of Preferred Stock are entitled to vote on an as-converted basis to common stock basis and have rights to approve certain actions.

From November 2022 to December 2024, we issued an aggregate of 41,982 shares of our Preferred Stock to a group of accredited investors (collectively, the “Investors”), pursuant to certain placement agency agreements.

The holders of our Preferred Stock are generally entitled to vote with the holders of our common stock on all matters submitted for a vote of our stockholders (voting together with the holders of common stock as one class) on an as-converted basis.

Additionally, the consent of the holders of a majority of the outstanding shares of Preferred Stock are required in order for us to take certain actions, including issuances of securities that are senior to, or equal in priority with, the Preferred Stock.

As a result, the holders of Preferred Stock may in the future have the ability to influence the outcome of certain matters affecting our governance and capitalization.

As of March 28, 2025, there were approximately 16,669 shares of our Preferred Stock outstanding, which are convertible without payment of additional consideration, into approximately 10.0 million shares of our common stock, subject to certain ownership limitations.

The conversion of the outstanding shares of our Preferred Stock into common stock would be substantially dilutive to existing stockholders.

Any dilution or potential dilution may cause our stockholders to sell their shares, which may contribute to a downward movement in the stock price of our common stock.

Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which would rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock .

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We have granted, and may continue to grant, share incentive awards, which may result in increased share-based compensation expenses.

We adopted our Amended and Restated 2014 Stock Option and Incentive Plan (the “2014 Plan”) in October 2014, for purposes of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with ours.

On June 9, 2025, the stockholders of the Company approved the 2025 Omnibus Stock Incentive Plan (the “2025 Plan”), for purposes of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with ours.

We account for compensation costs for all share-based awards issued under the 2025 Plan using a fair-value based method and recognize expenses in our statements of comprehensive loss in accordance with GAAP.

Under the 2025 Plan, we are authorized to grant options to purchase shares of common stock of our Company, restricted share units to receive shares of common stock and restricted shares of common stock.

For Fiscal Year 2024 and Fiscal Year 2023, we recorded share-based compensation expense of $1.3 million and $2.7 million, respectively, primarily related to issuances and vesting of awards under the 2014 Plan.

For Fiscal Year 2025 and Fiscal Year 2024, we recorded share-based compensation expense as disclosed at Note 8.

We believe the granting of share incentive awards is important to our ability to attract and retain employees, and we will continue to grant share incentive awards to employees in the future.

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Uncertainty in global economic conditions could negatively affect our business, results of operations and financial condition .

We have significant intangible assets recorded on our consolidated balance sheets as of December 31, 2023.

We will continue to evaluate the recoverability of the carrying amount of our intangible assets on an ongoing basis, and we may incur substantial impairment charges, which would adversely affect our consolidated financial results.

We have various intangible assets recorded on our balance sheet as of December 31, 2025.

There can be no assurance that the outcome of such reviews in the future will not result in substantial impairment charges.

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Integration of artificial intelligence into our operations could result in reputational or competitive harm, legal liability, and other adverse effects on our business.

We have integrated, and plan to further integrate, AI in our operations.

We have integrated, and plan to further integrate where appropriate, AI in our operations.

Such integration and use of AI may become more important in our operations over time.

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Geopolitical developments, such as the war in Ukraine, Hamas’ attack against Israel and the ensuing war, and tensions with China, and the responses by central banking authorities to control inflation, can increase levels of political and economic unpredictability globally and increase the volatility of global financial markets.

Adverse macroeconomic conditions, including lower consumer confidence, persistent unemployment, wage and income stagnation, slower growth or recession, changes to fiscal and monetary policy, inflation, higher interest rates, currency fluctuations, economic and trade sanctions, the availability and cost of credit, and the strength of the economies in which we and our customers are located, have adversely affected and may continue to adversely affect our consolidated financial condition and results of operations.

The most recent global financial crisis caused by COVID-19 resulted in extreme volatility and disruptions in the capital and credit markets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors