What changed in this filing

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Item 1. Business

2021-11-09 compared with 2020-10-28 · 398 added, 366 removed, 20 unchanged (97% of the section changed)

offer a state-of-the-art digital publishing platform.

We use this platform to power our consumer-facing mobile personalization

app, called Zedge, available in the Google Play store and App Store, which offers an easy, entertaining and immersive way for

end-users to engage with our rich and diverse catalogue of wallpapers, video wallpapers, ringtones, notification sounds on Android

and wallpapers, video wallpapers and ringtones, on iOS.

We secure our content from amateur and professional artists, and also

from emerging and major brands.

Company Overview

We own a portfolio of leading digital consumer brands that serve 43

million monthly active users across the globe.

Our portfolio consists of Zedge Ringtones and Wallpapers, Shortz, and as of the beginning

of August of 2021 Emojipedia.

We operate a state-of-the-art digital publishing platform that powers

Zedge Ringtones and Wallpapers, available in the Google Play store and App Store, which offers an easy, entertaining and immersive way

for end-users to engage with our rich and diverse catalogue of wallpapers, video wallpapers, ringtones, notification sounds on Android

and wallpapers, video wallpapers, ringtones and custom icon packs on iOS.

We secure our content from amateur and professional artists,

and also from emerging and major brands.

Artists have the ability to easily launch a virtual storefront in our Zedge app where they can

market and sell their content to our user base.

In fiscal 2020, we introduced a new entertainment app called “Shortz –

Chat Stories by Zedge”, which is focused on serialized, short-form, fiction stories, as a beta that runs on our publishing

Zedge app has been installed approximately 450 million times, and at July 31, 2020, boasted approximately 32 million monthly active

users, or MAU.

MAU is a key performance indicator that captures the number of unique users that used our Zedge app during the

previous 30-day of the relevant period.

Our Zedge app has consistently ranked as one of the most popular free apps in the Google

Play store in the United States.

Historically, we have not made a material investment in paid user acquisition for our Zedge app.

Zedge app’s success stems from its ability to meet consumer demand for a rich and diverse catalogue of both long-tail and

popular content in a fun, intuitive and user-friendly fashion that aligns with their interest in expressing their essence in a

bespoke manner, to offer reliable search and discovery capabilities and to make relevant content recommendations to our users.

To this end, we invest heavily in both product design and development and the underlying technology required to satisfy both our

Zedge app’s users’

That same platform powers an entertainment app called “Shortz –

by Zedge”, which is focused on serialized, short-form, fiction stories, as a beta that runs on our publishing platform.

past year, we have been expanding our content catalogue, started testing audio versions of a selected number of stories, materially improved

our ability to measure all types of engagement within the app, and invested a modest budget in paid user acquisition.

Finally, in August

of 2021, we acquired Emojipedia, the leading source of all things emoji.

Our Zedge app has been installed approximately 511 million times, and

at July 31, 2021, boasted approximately 34 million monthly active users, or MAU.

MAU is a key performance indicator that captures the

number of unique users that used our Zedge app during the final 30 days of the relevant period.

Our Zedge app has consistently ranked

as one of the most popular free apps in the Google Play store in the United States.

Historically, we have not made a material investment

in paid user acquisition for our Zedge app.

Our Zedge app’s success stems from its ability to meet consumer

demand for a rich and diverse catalogue of both long-tail and popular content in a fun, intuitive and user-friendly fashion that aligns

with their interest in expressing their essence in a bespoke manner, to offer reliable search and discovery capabilities and to make relevant

content recommendations to our users.

To this end, we invest heavily in both product design and development and the underlying technology

required to satisfy both our Zedge app’s users’

and content contributors’

expectations.

Our Zedge app utilizes both user-generated and licensed,

third-party content to achieve these goals.

March 2018, we launched Zedge Premium, a marketplace within our Zedge app where professional creators and brands market, distribute

and sell their digital content to our consumers.

Since launching Zedge Premium, we have made and continue making material investments

in optimizing our Zedge app’s homepage design in order to maximize exposure to premium content with the goal of driving

Our Zedge app contains both

user-generated and licensed, third-party content to achieve these goals.

In March 2018, we launched Zedge Premium, a marketplace within our

Zedge app where professional creators and brands market, distribute and sell their digital content to our consumers.

At launch, Zedge

Premium was a “walled garden”

a separate section of the app which users needed to proactively choose to enter.

we embedded Zedge Premium content throughout the app making it far more prominent.

We also introduced a new content type on iOS:

Over time, we expect that Zedge Premium will contribute to a virtuous cycle whereby it drives new consumers into our Zedge

app resulting in more artist payouts, which in turn makes the platform more attractive for artists and brands looking to expand

their reach and increase their income.

January 2019, we started offering freemium Zedge app users the ability to convert into paying subscribers for amongst other things

the ability to remove unsolicited advertisements from our Zedge app.

As of July 31, 2020, we had more than 504,000 active paid

In fiscal 2021, we hope to further optimize the offer based on user type, geography and price point as well as introduce

new subscription enhancements like content bundles and rewards.

December 2019, we completed the beta launch of ’Shortz’

our new entertainment app offering serialized, short-form

fiction delivered in a text-message format across both Android and iOS, focusing on users in the United States, the United Kingdom

and Canada and it is now available globally.

the past several years, our Zedge app has experienced a continuing decline in its MAU as well as a shift in the regional customer

make-up with MAU in emerging markets representing an increasing portion of our user base.

As of July 31, 2020, users in emerging

markets represented 70% of our MAU compared to 65% a year prior.

This shift has negatively impacted revenue because advertising

rates in emerging markets are materially lower than in well-developed markets.

In the fourth quarter of fiscal 2020, users in

emerging markets grew by 1.4% while users in well-developed economies declined 18.6% when compared to the same period in fiscal

As of July 31, 2020, approximately 50% of our Zedge app’s user base was located in North America and Europe (including

Eastern Europe) with a split of 26% and 24%, respectively, compared with 54% as of July 31, 2019 with 27% in each of North America

and Europe (including Eastern Europe).

growth is tightly coupled with securing new users.

Historically, our relatively high ranking in the Google Play store has been

one of the primary drivers for securing new users.

Although still an important factor, we now also dedicate resources to growth

initiatives, both organic and paid.

With time, we believe that we can change our growth dynamic in well-developed markets.

from targeted growth initiatives, we need to continually improve the core user experience, test different mechanisms and content

verticals that may spur growth and capitalize on the role that Zedge Premium artists can have on driving new users into the Zedge

COVID-19 pandemic has negatively impacted our Zedge app’s new user growth.

We believe that new smartphone sales have suffered

as a result of retail business closures, negatively impacting new user growth, especially in well-developed markets.

the retail business rebounds from the COVID-19 pandemic, we expect that our Zedge app’s new user growth will also recover

and we will benefit accordingly.

the quarter and fiscal year ended July 31, 2020, we generated approximately 73% and 78%, respectively, of our revenues from selling

our Zedge app’s advertising inventory to advertising networks, advertising exchanges, and direct arrangements with advertisers.

Advertising networks and advertising exchanges are third-party technology platforms that facilitate the buying and selling of

media advertising inventory from multiple ad networks.

The price of advertising inventory is fixed on an advertising network whereas

the price for inventory is determined through real-time bidding on an advertising exchange.

Advertisers are attracted to our Zedge

app because of its sizable user base.

our Zedge Premium marketplace, the content owner sets the price and the user can purchase the content by paying for it with Zedge

Credits, our closed virtual currency.

A user can earn Zedge Credits when taking specific actions such as watching a rewarded video.

Alternatively, users can buy Zedge Credits via an in-app purchase.

If a user purchases Zedge Credits, Google Play or App Store

keeps 30% of the purchase price with the remaining 70% being paid to us.

When a user purchases Zedge Premium content, the artist

or brand receives 70% of the actual value of the Zedge Credits used to buy the content item as a royalty and we retain the remaining

30% as our fee, which we recognize as revenue.

As Zedge Premium matures and expands, we expect to also diversify our revenue source

January 2019, we started offering a subscription-based product to Android users of our Zedge app in which the payment of a monthly

or annual fee would remove unsolicited ads when using our Zedge app.

During the first 12 months after a customer’s sign

up for the subscription-based product, Google retains up to 30% as a fee, which decreases to 15% from month 13 and beyond.

of July 31, 2020, we had more than 504,000 active paid subscribers, 89% of which had subscribed on an annual basis.

During fiscal

app resulting in more artist payouts, which in turn makes the platform more attractive for artists and brands looking to expand their

reach and increase their income.

In January 2019, we started offering freemium Zedge app Android users

the ability to convert into paying subscribers for, amongst other things, the ability to remove unsolicited advertisements from our Zedge

As of July 31, 2021, we had approximately 752,000 active paid subscribers.

In fiscal 2022, we expect to launch subscriptions on iOS.

In December 2019, we completed the beta launch of ‘Shortz’

our new entertainment app offering serialized, short-form fiction rendered in a text-message format and more recently as audio productions

available across both Android and iOS, and focusing on users in the United States, the United Kingdom and Canada and it is now available

New stories are added to the app each week, and as the content catalog expands, we are regularly improving content discovery

in order to guide users to the stories that will most interest them and improve engagement.

On August 1, 2021, we acquired Emojipedia, the world’s leading

authority dedicated to providing up to date and well-researched emoji definitions, information, and news as well as World Emoji Day and

the annual World Emoji Awards, and Emojitracker, which provides real time visualization of all emoji symbols used on Twitter.

receives approximately 50 million monthly page views and has approximately 9 million monthly active users of which approximately 50% are

located in well-developed markets.

It is the top resource for all things emoji, offering insights into data and cultural trends.

voting member of the Unicode Consortium, the standards body responsible for approving new emojis, Emojipedia works alongside major emoji

creators including Apple, Google, Facebook and Twitter.

Over the past several years, our Zedge app has experienced a continuing

decline in its MAU as well as a shift in the regional customer make-up with MAU in emerging markets representing an increasing portion

of our user base.

As of July 31, 2021, users in emerging markets represented 75% of our MAU compared to 70% a year prior.

This shift has

negatively impacted revenue because advertising rates in emerging markets are materially lower than in well-developed markets.

fourth quarter of fiscal 2021, users in emerging markets grew by 16.1% while users in well-developed economies declined 11.5% when compared

to the same period in fiscal 2020.

As of July 31, 2021, approximately 42% of our Zedge app’s user base was located in North America

(20%) and Europe (including Eastern Europe, 22%), compared with 50% (North America, 24% and Europe 26%) as of July 31, 2020.

The remaining

58% of the user base was primarily located in emerging markets with 25% located in India.

MAU growth is tightly coupled with new user growth.

Historically, our

relatively high ranking in the Google Play store has been one of the primary drivers for securing new users.

Although still an important

factor, we now also dedicate resources to growth initiatives, both organic and paid.

In fiscal 2022, we expect to increase our paid user

acquisition spend while monitoring results to ensure that the investment is yielding a positive return on investment.

With time, we believe

that we can change our growth dynamic in well-developed markets.

Aside from targeted growth initiatives, we need to continually improve

the core user experience, test different mechanisms and content verticals that may spur growth and capitalize on the role that Zedge Premium

artists can have on driving new users into the Zedge platform.

The COVID-19 pandemic has impacted our Zedge app’s new user growth.

According to Gartner, a leading research and advisory company, new smartphone sales declined 10.5% in calendar year 2020 as a result of

the pandemic, negatively impacting new user growth, especially in well-developed markets.

As of September 1, 2021, Gartner reported that

worldwide smartphone sales grew by 10.8% year over year in the second quarter of calendar year 2021 despite supply constraints relating

to COVID-19 component shortages and production disruptions;

however, it is still unclear what the impact on user growth will be as vaccines

become more available globally and as precautions like social distancing start to wane.

The pandemic and measures implement to promote

social distancing had a modest positive impact on user engagement.

During the quarter and fiscal year ended July 31, 2021, we generated

approximately 81% and 80%, respectively, of our revenues from selling our Zedge app’s advertising inventory to advertising networks,

advertising exchanges, and direct arrangements with advertisers.

Advertising networks and advertising exchanges are third-party technology

platforms that facilitate the buying and selling of media advertising inventory from multiple ad networks.

The price of advertising inventory

is fixed on an advertising network whereas the price for inventory is determined through real-time bidding on an advertising exchange.

Advertisers are attracted to our Zedge app because of its sizable user base.

In our Zedge Premium marketplace, the content owner sets the price

and the user can purchase the content by paying for it with Zedge Credits, our closed virtual currency.

A user can earn Zedge Credits

when taking specific actions such as watching a rewarded video or taking a survey.

Alternatively, users can buy Zedge Credits via an in-app

If a user purchases Zedge Credits, Google Play or App Store keeps up to 30% of the purchase price with the remainder being paid

When a user purchases Zedge Premium content, the artist or brand receives 70% of the actual value of the Zedge Credits used to

buy the content item as a royalty and we retain the remaining 30% as our fee, which we recognize as revenue.

As Zedge Premium matures

and expands, we expect to also diversify our revenue source mix.

In January 2019, we started offering paid subscriptions to our Android

users which amongst other things removed unsolicited advertisements from our Zedge app.

During the first 12 months after a customer’s

sign up for the subscription-based product, Google retains up to 30% as a fee, which decreases to 15% from month 13 and beyond.

July 31, 2021, we had approximately 752,000 active subscribers, 90% of which had subscribed on an annual basis.

Since inception in January

2019, subscriptions have generated approximately $6.7 million in gross revenue.

to May 31, 2019, we generated service revenue from managing and optimizing the advertising inventory of a third-party mobile application

publisher, as well as overseeing the billing, collections and reporting related to advertising for this publisher.

The agreement

with this mobile application publisher was terminated effective May 31, 2019, and we are no longer providing these services.

fiscal 2020, we generated revenues of $9.5 million and a loss from operations of $0.4 million, compared to revenues of $8.8 million

and a loss from operations of $2.9 million in fiscal 2019.

fiscal 2020, advertisements from MoPub (owned by Twitter) represented 28.8% of our revenue, advertisements from Google represented

26.1% of our revenues and advertisements from Facebook represented 7.4% of our revenues, as compared with 28.1%, 27.9% and 5.8%,

respectively, during fiscal 2019.

In addition, advertisements from Ogury contributed 6.5% of our revenues during fiscal 2020,

as compared with 9.8% during fiscal 2019.

December 2019, we completed the beta launch of ’Shortz’

our new entertainment app offering serialized, short-form

fiction delivered in a text-message format across both Android and iOS.

Although the app is available globally, our near-term

focus is on attracting users in the United States, the United Kingdom and Canada.

January 2019, we started offering freemium Zedge app users the ability to convert into paying subscribers for the ability to remove

unsolicited advertisements from our Zedge app.

As of July 31, 2020, we had more than 504,000 paying subscribers.

March 2018, we completed the launch of Zedge Premium, a section of our Zedge app where consumers

are able to access a wide portfolio of professionally created content, including wallpapers, video wallpapers, exclusive ringtones,

and videos created by digital artists, photographers, illustrators, musicians and audio engineers from around the world.

Competitive Advantage

believe that the following competitive strengths will drive the growth of our business:

global customer base.

During fiscal 2021, we generated revenues of $19.6 million and an income

from operations of $7.8 million, compared to revenues of $9.5 million and a loss from operations of $0.4 million in fiscal 2020.

During fiscal 2021, advertisements from MoPub (owned by Twitter) represented

30% of our revenue, advertisements from Google represented 22% of our revenues and advertisements from Facebook represented 12% of our

revenues, as compared with 29%, 26% and 7%, respectively, during fiscal 2020.

Recent Developments

In March 2018, we launched Zedge Premium, a marketplace within our

Zedge app where professional creators and brands market, distribute and sell their digital content to our consumers.

Since launching Zedge

Premium, we have made and continue making material investments in optimizing our Zedge app’s homepage design in order to maximize

exposure to premium content with the goal of driving sales.

Over time, we expect that Zedge Premium will contribute to a virtuous cycle

whereby it drives new consumers into our Zedge app resulting in more artist payouts, which in turn makes the platform more attractive

for artists and brands looking to expand their reach and increase their income.

In January 2019, we started offering paid subscriptions which, amongst

other things, removed unsolicited advertisements from our Zedge app.

As of July 31, 2021, we had approximately 752,000 active subscribers.

Our plans call for further optimizing the offer based on user type, geography and price point as well as value adds including content

bundles and rewards.

In December 2019, we completed the beta launch of ‘Shortz’

our new entertainment app offering serialized, short-form fiction delivered in a text-message format across both Android and iOS, focusing

on users in the United States, the United Kingdom and Canada and it is now available globally.

On August 1, 2021.

we acquired Emojipedia, the world’s leading

authority dedicated to providing up to date and well-researched emoji definitions, information, and news as well as World Emoji Day and

the annual World Emoji Awards, and Emojitracker, which provides real time visualization of all emoji symbols used on Twitter.

receives approximately 50 million monthly page views and has approximately 9 million monthly active users of which approximately 50% are

located in well-developed markets.

It is the top resource for all things emoji, offering insights into data and cultural trends.

voting member of the Unicode Consortium, the standards body responsible for approving new emojis, Emojipedia works alongside major emoji

creators including Apple, Google, Facebook and Twitter.

Our Competitive Advantages

We believe that the following competitive strengths will drive the

growth of our business:

Large, global customer base.

We benefit from our Zedge app having a large customer base.

As of July 31, 2020, we had approximately 32 million MAU of which approximately 26% were

in North America and 24% were in Europe (including Eastern Europe), which provide preferred

As of July 31, 2021, we had approximately

34 million MAU of which approximately 20% were in North America and 22% were in Europe (including Eastern Europe), which provide preferred

monetization opportunities since these regions provide attractive demographics to advertisers.

To serve a global user base, the Android version of our Zedge app is available in 14

Our Zedge app’s global footprint helps us to secure a highly diverse

portfolio of content addressing various customer tastes and preferences.

our Zedge app’s customer base attracts advertisers seeking customers that have

adequate disposable income to purchase their products and services.

Our Zedge app’s

large customer base is also a draw to artists and brands looking to market their content

to a critical mass of users.

global provider of mobile personalization content .

We offer our Zedge app globally,

enabling users to easily personalize their mobile phones with a wide variety of free,

high-quality ringtones, wallpapers, notification sounds, video wallpapers and stickers.

We believe that our Zedge app is well positioned for continued leadership in the personalization

● High-quality

We believe that our Zedge app provides our customers with a high-quality

product and superior user experience.

To serve a global user base, the Android

version of our Zedge app is available in 17 languages.

Our Zedge app’s global footprint helps us to secure a highly diverse portfolio

of content addressing various customer tastes and preferences.

In addition, our Zedge app’s customer base attracts advertisers seeking

customers that have adequate disposable income to purchase their products and services.

Our Zedge app’s large customer base is also

a draw to artists and brands looking to market their content to a critical mass of users.

Leading global provider of mobile personalization content .

We offer our Zedge app globally, enabling users to easily personalize

their mobile phones with a wide variety of free, high-quality ringtones, wallpapers, notification sounds, video wallpapers and app icons.

We believe that our Zedge app is well positioned for continued leadership in the personalization space.

High-quality product .

We believe that our Zedge app provides our customers with a high-quality product and superior user experience.

We prioritize our customers’

needs and believe

that this focus is critical for our long-term growth and expansion.

needs and believe that this focus is critical for our long-term growth and expansion.

We invest significant

resources in product development, design and usability of our Zedge app.

product enhancements extensively and closely monitor customer feedback to ensure that

we meet our Zedge app’s user needs.

We believe that our Zedge app’s high

user ranking validates our product-oriented focus.

As of July 31, 2020, our Zedge app

enjoyed a lifetime average user rating of 4.6 stars out of a maximum of 5 stars in the

Google Play store.

● Employees .

We have a team of highly experienced professionals that take pride and ownership in their

work product.

Our diverse employee base is passionate about our Zedge app and its mission

to serve as a medium for self-expression and entertainment.

Our culture is founded on

respect and empowerment which are critical in light of us having offices in three different

We strive to create an environment where our employees can be autonomous and

We have an experienced management team that has a deep knowledge of the mobile

app landscape and is highly focused on execution.

Our core management team possesses

a solid understanding of the mobile app industry, product design and development, operations

and monetization.

Collectively, our management team has proven ability in building and

scaling a business and pursuing opportunity with a manageable risk profile.

and diverse content catalogue .

Our Zedge app offers a large and diverse catalogue

of content including wallpapers, ringtones, notification sounds and, more recently, video

wallpapers and app icons.

With artists and contributors spanning the globe, our Zedge

app has assembled a vast array of content to meet the needs of its users.

and infrastructure .

The Zedge app has a scalable technology and infrastructure that

reliably serves tens of millions of MAU.

We use a combination of off-the-shelf and proprietary

technologies and infrastructure solutions in the Zedge app that scale efficiently to

meet the needs of its large customer base.

believe that mobile phone users enjoy personalizing their phones with mobile personalization content.

Our Zedge app provide consumers,

globally, with a rich array of high-quality personalization content used to express their essence, individuality, and voice in

an easy, entertaining and immersive fashion.

Professional artists, individual creators and brands turn to our Zedge platform for

marketing and distributing their content to our consumers.

Our Zedge app currently offers a rich and diverse catalogue of wallpapers,

video wallpapers, ringtones, notification sounds on Android and wallpapers, video wallpapers, app icons and ringtones, on iOS.

We beta test product enhancements extensively and closely monitor

customer feedback to ensure that we meet our Zedge app’s user needs.

We believe that our Zedge app’s high user ranking validates

our product-oriented focus.

As of July 31, 2021, our Zedge app enjoyed a lifetime average user rating of 4.6 stars out of a maximum of

5 stars in the Google Play store.

We have a team of highly experienced professionals that take pride and ownership in their work product.

employee base is passionate about our Zedge app and its mission to serve as a medium for self-expression and entertainment.

is founded on respect and empowerment which are critical in light of us having offices in three different countries.

We strive to create

an environment where our employees can be autonomous and creative.

Management team .

We have an experienced management team that has a deep knowledge of the mobile app landscape and is highly

focused on execution.

Our core management team possesses a solid understanding of the mobile app industry, product design and development,

operations and monetization.

Collectively, our management team has proven ability in building and scaling a business and pursuing opportunity

with a manageable risk profile.

Large and diverse content catalogue .

Our Zedge app offers a large and diverse catalogue of content including wallpapers, ringtones,

notification sounds and, more recently, video wallpapers and app icons.

With artists and contributors spanning the globe, our Zedge app

has assembled a vast array of content to meet the needs of its users.

Technology and infrastructure .

The Zedge app has a scalable technology and infrastructure that reliably serves tens of millions

We use a combination of off-the-shelf and proprietary technologies and infrastructure solutions in the Zedge app that scale efficiently

to meet the needs of its large customer base.

Our Zedge app faces competition across many different fronts including:

Mobile personalization products .

Generally, our Zedge app competes with other developers’

mobile apps for an end-user’s

More specifically, ringtones, wallpapers, notification sounds, and video are a commodity, and many smaller apps and websites

offer this content both free and for a fee.

We believe that our Zedge app has a competitive advantage due to its:

large user base;

“one-stop shop”

approach which avails customers of ringtones, wallpapers, notification sounds, and video wallpapers within

the same Android app;

modular approach that allows the customer to selectively choose what they would like to personalize without handing over the core

elements of the native operating system to a third party and overwhelming the user with a myriad of complex options;

large content catalogue;

proprietary recommendation engine;

market ranking and longevity.

Advertisers .

We face significant competition for advertising spend on our Zedge app from both digital media providers and traditional

media outlets, including television, radio and print, many of which have significantly more resources than us.

Content creators .

There are many websites and mobile apps that focus on offering content creators an eco-system in which they

can market and sell their digital art.

Yet, we are not aware of many that as of July 31, 2021 had access to an embedded customer base

with approximately 34 million MAU, which we believe makes our Zedge app more attractive to many content creators.

Rapid-Paced and Changing World of Mobile App Development.

The mobile app eco-system changes quickly and regularly with new

apps capturing massive audiences competing for consumer’s time, mindshare and money.

This is an ongoing competitive threat requiring

us to do our best to adapt as necessary to remain relevant and meaningful.

We believe that mobile phone users enjoy personalizing their phones

with mobile personalization content.

Our Zedge app provide consumers, globally, with a rich array of high-quality personalization content

used to express their essence, individuality, and voice in an easy, entertaining and immersive fashion.

Professional artists, individual

creators and brands turn to our Zedge platform for marketing and distributing their content to our consumers.

Our Zedge app currently

offers a rich and diverse catalogue of wallpapers, video wallpapers, ringtones, notification sounds on Android and wallpapers, video wallpapers,

app icons and ringtones, on iOS.

In the future, we may offer new content verticals and enhanced features in our Zedge app.

date, our Zedge app has been installed approximately 450 million times as of July 31, 2020 and has consistently ranked in the

‘Top 100’

most popular free apps in the Google Play store in the United States.

The overwhelming majority of our Zedge

app’s downloads have been organic in nature without our investing in paid user-acquisition campaigns.

Our Zedge app continues

to serve as a low-cost user acquisition channel.

vision calls for utilizing our Zedge app’s digital publishing platform to not only continue being one of the world’s

leading mobile personalization content apps but to also use this platform to publish new stand-alone apps that extend our value

proposition in entertainment.

We have engineered the platform to support an array of digital content enabling us to launch new

apps with relative ease and speed.

We want to capitalize on our Zedge app’s existing large install base as well as organic

search traffic across the web and in the app stores as a low-cost user acquisition channel for these new entertainment apps.

goal is to ensure that these new apps are equally valuable and viable across both Android and iOS.

we execute our vision, we would build a network of apps which can be used for cross-promotional purposes.

We identified the entertainment

market as our focal point for new apps because we believe that apps in that market:

overlap well with the demographic of our Zedge app’s existing customer base;

a higher frequency of use when compared to our Zedge app enabling the potential for both

a subscription and ad-based monetization model;

for us to attract new users who may not be interested in our Zedge app’s personalization

fiscal 2020 we introduced the “Shortz –

Chat Stories by Zedge”

To date, our Zedge app has been installed approximately 511 million

times as of July 31, 2021 and has consistently ranked in the top free apps in the Google Play store in the United States.

The overwhelming

majority of our Zedge app’s downloads have been organic in nature without our investing in paid user-acquisition campaigns.

Zedge app continues to serve as a low-cost user acquisition channel.

Our vision calls for utilizing our Zedge app’s digital publishing

platform to not only continue being one of the world’s leading mobile personalization content apps but to also use this platform

to publish new stand-alone apps that extend our value proposition in entertainment and possibly other verticals.

We have engineered the

platform to support an array of digital content enabling us to launch new apps with relative ease and speed.

We want to capitalize on

our Zedge app’s existing large install base as well as organic search traffic across the web and in the app stores as a low-cost

user acquisition channel for these new entertainment apps.

Our goal is to ensure that these new apps are equally valuable and viable across

both Android and iOS.

If we execute our vision, we would build a network of apps which can

be used for cross-promotional purposes.

We identified the entertainment market as our focal point for new apps because we believe that

apps in that market:

generally overlap well with the demographic of our Zedge app’s existing customer base;

enjoy a higher frequency of use when compared to our Zedge app enabling the potential for both a subscription and ad-based monetization

allow for us to attract new users who may not be interested in our Zedge app’s personalization content.

In fiscal 2020 we introduced the “Shortz –

by Zedge”

app, as a beta.

It is our first foray in the

entertainment vertical and is dedicated to offering “Chat Stories,”

which are serialized, short-form fiction delivered

in a text-message format.

Every time the user clicks on their screen, he or she sees the next message in the episode.

Zedge app’s strong position as a leading platform for personalization content that consumers use to express their essence,

individuality, and voice in an easy, entertaining and immersive fashion remains critical to our business.

In order to maintain

this position, we are concentrating our efforts on the following goals:

growing our Zedge app’s user base, globally .

We expect to continue devoting

resources to grow our Zedge app’s user base by:

its users’

It is our first foray in the entertainment vertical and is dedicated to offering “Chat Stories,”

which are serialized, short-form fiction rendered in a text-message format and more recently as mini-podcasts.

Our Zedge app’s strong position as a leading platform for personalization

content that consumers use to express their essence, individuality, and voice in an easy, entertaining and immersive fashion remains critical

to our business.

In order to maintain this position, we are concentrating our efforts on the following goals:

Continue growing our Zedge app’s user base, globally .

We expect to continue devoting resources to grow our Zedge app’s

user base by:

studying its users’

needs and enhancing our app to meet those needs;

and offering new features and services in the Zedge app that are relevant to new users

interested in personalized digital content;

our Zedge app’s reach by collaborating with strategic partners.

our Zedge app’s monetization .

We will continue exploring additional monetization

methods for our Zedge app, including in-app purchases, subscription models, e-commerce,

new advertising products and brand sponsorships.

We believe that our Zedge app’s

large and expanding customer base is an attractive medium for advertisers, brands and

artists and that this will result in new monetization opportunities for our Zedge app

over time as well as an appealing audience to promote our new apps.

March 2018, we launched Zedge Premium, a marketplace within our Zedge app where professional

creators and brands market, distribute and sell their digital content to our consumers.

Gross Transaction Value, or GTV, grew 50% to $728,000 in fiscal 2020 from $485,000 in

January 2019, we started testing a paid subscription model of our Zedge app which removed

unsolicited ads from the app.

As of July 31, 2020, we had more than 504,000 active paid

product and technology investment in our Zedge app .

We plan to make continued, selected

investments in product feature sets and functionalities of our Zedge app in order to

both maintain its userbase and attract new users and artists and position its content

developing and offering new features and services in the Zedge app that are relevant to new users interested in personalized digital

Investing in paid user acquisition campaigns that we believe can yield profitable customers, primarily in well-developed markets;

expanding our Zedge app’s reach by collaborating with strategic partners.

Improve our Zedge app’s monetization .

We will continue exploring additional monetization methods for our Zedge app, including

in-app purchases, one-of-a-kind and limited-edition content, subscription models, e-commerce, new advertising products and brand sponsorships.

We believe that our Zedge app’s large and expanding customer base is an attractive medium for advertisers, brands and artists and

that this will result in new monetization opportunities for our Zedge app over time as well as an appealing audience to promote our new

Ongoing product and technology investment in our Zedge app .

We plan to make continued, selected investments in product feature

sets and functionalities of our Zedge app in order to both maintain its userbase and attract new users and artists and position its content

contributors for optimal success in achieving their marketing and sales goals.

these initiatives include ongoing investment in our Zedge app’s search and discovery,

content recommendations, supporting new content verticals, improving our Zedge app’s

Some of these initiatives include ongoing investment in

our Zedge app’s search and discovery, content recommendations, supporting new content verticals, improving our Zedge app’s

self-serve platform, and connecting creators with relevant end users via our Zedge app.

our Zedge app into a best-of-breed platform for artists and creators .

to build our Zedge app into a platform that artists view as prioritizing their needs

ahead of other platforms and addressing all aspects of their marketing and revenue generation

goals including, but not limited to, ease in managing their virtual storefront, promotion,

education, reporting and distribution.

our marketing efforts for our Zedge app .

Historically, we haven’t invested

materially in marketing initiatives for our Zedge app.

Going forward, we envision the

need to better promote our Zedge app and to amplify our Zedge app’s value proposition

Leverage first-party data and usage insights .

We plan to utilize first-party data and usage insights to optimize the product

by offering personalized recommendations and content feeds, improved search and content discovery, and optimized pricing.

Building our Zedge app into a best-of-breed platform for artists and creators .

Our goal is to build our Zedge app into a platform

that artists view as prioritizing their needs ahead of other platforms and addressing all aspects of their marketing and revenue generation

goals including, but not limited to, ease in managing their virtual storefront, promotion, education, reporting and distribution.

Increase our marketing efforts for our Zedge app .

Historically, we haven’t invested materially in marketing initiatives

for our Zedge app.

Going forward, we envision the need to better promote our Zedge app and to amplify our Zedge app’s value proposition

to artists and individual creators.

We envisage these creators and influencers and brands

self-promoting their availability on our Zedge app in order to extend their reach, generating

incremental income and drive more end-user traffic to our platform.

We envisage these creators and influencers and brands self-promoting their availability on our Zedge

app in order to extend their reach, generating incremental income and drive more end-user traffic to our platform.

Furthermore, we also

plan to continue to invest in app store optimization, search, marketing automation, social

marketing and community management in order to retain and expand our Zedge app’s

customer base.

our revenue by developing and offering new apps .

Historically, the vast majority

of our revenue has been derived from our Zedge app.

Without losing focus on our Zedge

app, we plan to diversify our revenue by developing and offering new apps that will leverage

our technology and management team.

In December 2019, we completed the beta launch of

’Shortz’

our new entertainment app offering serialized, short-form fiction

delivered in a text-message format across both Android and iOS.

● Selectively

pursue strategic investments, partnerships and acquisitions .

On a selective basis,

we will look to invest in, partner with or purchase entities that can provide synergistic

growth opportunities for our Zedge app and otherwise.

For example, in September 2017,

we closed the Freeform acquihire in order to accelerate the launch and development of

Zedge Premium.

We plan to leverage our understanding of the smartphone industry to pursue

additional opportunities that we believe can impact our business in a materially positive

2003, Tom Arnoy, Kenneth Sundnes and Paul Shaw launched a consumer website at www.zedge.net that people used to upload and download

December 2006, IDT Corporation acquired 90% of Zedge.

Zedge Holdings, Inc.

was incorporated in Delaware in 2008, and our name

was changed to Zedge, Inc.

2009, we introduced the Android version of our Zedge app.

The Zedge app provided ease-of-use by negating the need for customers

to first download a ringtone or wallpaper to their computer and then upload that content to their mobile phone.

launched the iOS version of our Zedge app in 2013, followed by launch of the Windows Mobile Zedge app in 2014.

2014 and 2015, our Zedge app introduced app icons, social sharing features and marketing automation capabilities, and expanded

the number of languages supported.

2016, IDT Corporation spun off our stock to its stockholders, and our Class B Common Stock was listed on the NYSE American with

the ticker symbol “ZDGE”.

March 2018, we completed the launch of Zedge Premium, our marketplace that is part of the Zedge app where artists and brands can

market, distribute and sell to our users their digital content, including wallpapers, ringtones, video wallpapers and stickers .

January 2019, we started testing a subscription-based product on the Android version of our Zedge app, whereby users could prepay

a monthly or yearly fee to remove unsolicited ads when using our Zedge app.

As of July 31, 2020, we had more than 504,000 active

paid subscribers.

December 2019, we completed the beta launch of ’Shortz’, our new entertainment app offering serialized, short-form

fiction delivered in a text-message format across both Android and iOS, focusing on users in the United States, the United Kingdom

and Canada and it is now available globally.

August 2020, Jonathan Reich was promoted to Chief Executive Officer and Yi Tsai was promoted to Chief Financial Officer.

Zedge app is powered by a scalable distributed platform that is comprised of both open source and proprietary technologies centered

on content management and discovery, web and app development, data mining and analytics, deep learning, mobile content/device

compatibility, advertising and reporting.

We have built a robust platform that allows us to ideate, test, and launch where warranted

by the outcome and we have embraced machine learning throughout our technology stack in order to improve content recommendations

and relevancy.

From an end user’s perspective, our Zedge app’s platform minimizes response latency while maximizing

content relevancy and discoverability.

We optimize our platform by utilizing systems, algorithms and heuristics that organize

our Zedge app’s content based upon real user data and that renders the content in a relevant fashion.

Our infrastructure

provides a fully redundant production environment in a cloud-hosted, virtual-server environment.

Zedge app faces competition across many different fronts including:

personalization products .

Generally, our Zedge app competes with other developers’

mobile apps for an end-user’s screen time.

More specifically, ringtones, wallpapers,

notification sounds, and video are a commodity, and many smaller apps and websites offer

this content both free and for a fee.

We believe that our Zedge app has a competitive

advantage due to its:

stop shop”

approach which avails customers of ringtones, wallpapers, notification

sounds, video wallpapers and stickers within the same Android app;

approach that allows the customer to selectively choose what they would like to personalize

without handing over the core elements of the native operating system to a third party

and overwhelming the user with a myriad of complex options;

content catalogue;

● proprietary

recommendation engine;

ranking and longevity.

● Advertisers .

We face significant competition for advertising spend on our Zedge app from both digital

media providers and traditional media outlets, including television, radio and print,

many of which have significantly more resources than us.

There are many websites and mobile apps that focus on offering content

creators an eco-system in which they can market and sell their digital art.

not aware of many that as of July 31, 2020 had access to an embedded customer base with

approximately 32 million MAU, which we believe makes our Zedge app more attractive to many

content creators.

● Rapid-Paced

and Changing World of Mobile App Development.

The mobile app eco-system changes quickly

and regularly with new apps capturing massive audiences competing for consumer’s

time, mindshare and money.

This is an ongoing competitive threat requiring us to do our

best to adapt as necessary to remain relevant and meaningful.

trademarks, copyrights, domain names, proprietary technology, knowhow and other intellectual property are vital to our success.

We seek to protect our intellectual property rights by relying on federal, state and common law rights in the United States and

other countries, as well as contractual restrictions.

We enter into confidentiality and nondisclosure agreements with our employees

and business partners.

The agreements we enter into with our employees also provide that all software, inventions, developments,

works of authorship and trade secrets created by them during the course of their employment are our property.

have been granted trademark protection for “Zedge”

in the United States, European Union, United Kingdom, India and

Canada and for “Tonesync”

in the European Union.

We also have applied for trademark protection for “We make

phones personal”, “Tattoo your phone”, “Everything You”, “Zedge, Everything, You”

“Shortz –

plan to scale up paid user acquisition focusing on users that we believe can yield profitable customers and also continue to invest in

app store optimization, search, marketing automation, social marketing and community management in order to retain and expand our Zedge

app’s customer base.

Diversify our revenue by developing and offering new apps .

Historically, the vast majority of our revenue has been derived

from our Zedge app.

Without losing focus on our Zedge app, we plan to diversify our revenue by developing and offering new apps that will

leverage our technology and management team.

For example, in December 2019, we completed the beta launch of ‘Shortz’

entertainment app offering serialized, short-form fiction delivered in a text-message format across both Android and iOS and in August

of 2021 we acquired Emojipedia, the world’s leading authority dedicated to providing up to date and well-researched emoji definitions,

information, and news.

We expect Emojipedia will contribute to diversifying our portfolio of digital brands, revenue generators, and customer

Selectively pursue strategic investments, partnerships and acquisitions .

On a selective basis, we will look to invest in, partner

with or purchase entities that can provide synergistic growth opportunities for our Zedge app and otherwise.

For example, on August 1,

2021 we acquired Emojipedia, the world’s leading authority dedicated to providing up to date and well-researched emoji definitions,

information, and news as well as World Emoji Day and the annual World Emoji Awards, and Emojitracker, which provides real time visualization

of all emoji symbols used on Twitter.

Emojipedia does not offer a mobile app and we expect to test offering their content via an in-app

experience and capitalizing on our userbase base of close to 35 million monthly active users.

We plan to leverage our understanding of

web based businesses and the smartphone industry to pursue additional opportunities that we believe can impact our business in a materially

positive fashion.

In 2003, Tom Arnoy, Kenneth Sundnes and Paul Shaw launched a consumer

website at www.zedge.net that people used to upload and download ringtones.

In December 2006, IDT Corporation acquired 90% of Zedge.

Zedge Holdings,

was incorporated in Delaware in 2008, and our name was changed to Zedge, Inc.

In 2009, we introduced the Android version of our Zedge app.

app provided ease-of-use by negating the need for customers to first download a ringtone or wallpaper to their computer and then upload

that content to their mobile phone.

We launched the iOS version of our Zedge app in 2013, followed by launch

of the Windows Mobile Zedge app in 2014.

During 2014 and 2015, our Zedge app introduced app icons, social sharing

features and marketing automation capabilities, and expanded the number of languages supported.

In 2016, IDT Corporation spun off our stock to its stockholders, and

our Class B Common Stock was listed on the NYSE American with the ticker symbol “ZDGE”.

In March 2018, we completed the launch of Zedge Premium, our marketplace

that is part of the Zedge app where artists and brands can market, distribute and sell to our users their digital content, including wallpapers,

ringtones, video wallpapers and stickers .

In January 2019, we started testing a subscription-based product on

the Android version of our Zedge app, whereby users could prepay a monthly or yearly fee to remove unsolicited ads when using our Zedge

As of July 31, 2021, we had approximately 752,000 active paid subscribers.

In December 2019, we completed the beta launch of ‘Shortz’,

our new entertainment app offering serialized, short-form fiction delivered in a text-message format across both Android and iOS, focusing

on users in the United States, the United Kingdom and Canada and it is now available globally.

In August 2020, Jonathan Reich was promoted to Chief Executive Officer

and Yi Tsai was promoted to Chief Financial Officer.

On August 1, 2021, we acquired Emojipedia, the world’s leading

authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news as well as World Emoji Day and

the annual World Emoji Awards, and Emojitracker, which provides real time visualization of all emoji symbols used on Twitter.

Our Technology

Our Zedge app is powered by a scalable distributed platform that is

comprised of both open source and proprietary technologies centered on content management and discovery, web and app development, data

mining and analytics, deep learning, mobile content/device compatibility, advertising and reporting.

We have built a robust platform that

allows us to ideate, test, and launch where warranted by the outcome and we have embraced machine learning throughout our technology stack

in order to improve content recommendations and relevancy.

From an end user’s perspective, our Zedge app’s platform minimizes

response latency while maximizing content relevancy and discoverability.

We optimize our platform by utilizing systems, algorithms and

heuristics that organize our Zedge app’s content based upon real user data and that renders the content in a relevant fashion.

infrastructure provides a fully redundant production environment in a cloud-hosted, virtual-server environment.

Intellectual Property

Our trademarks, copyrights, domain names, proprietary technology, knowhow

and other intellectual property are vital to our success.

We seek to protect our intellectual property rights by relying on federal, state

and common law rights in the United States and other countries, as well as contractual restrictions.

We enter into confidentiality and

nondisclosure agreements with our employees and business partners.

The agreements we enter into with our employees also provide that all

software, inventions, developments, works of authorship and trade secrets created by them during the course of their employment are our

We have been granted trademark protection for “Zedge”

the United States, European Union, United Kingdom, India and Canada and for “Tonesync”

in the European Union and the United

Kingdom, and “We Make Phones Personal”

and “Shortz –

Chat Stories by Zedge”

in the United States as well as for copyright protection for our flagship

In addition, we have registered, amongst others, the following domain names:

in the United States.

have applied for trademark protection for “Tattoo your phone”

and “Zedge, Everything You”

in the United States,

and have obtained a copyright registration for our flagship app, Zedge.

In addition, we have registered, amongst others, the following

domain names:

www.zedge.net and www.zedge.com.

of July 31, 2020, we had 37 full-time and 2 part-time employees.

principal executive office was located in a leased premise comprising approximately 500 square feet of space in New York City,

which lease was terminated on July 15, 2020.

We have moved to a virtual office because our staffs have been working remotely because

of the COVID-19 pandemic.

This location housed commercial operations including sales, accounting and finance, and business development.

Our Trondheim, Norway facility, with approximately 11,500 square feet of space, accommodates our product, design and technology

teams and is under lease through 2021.

We also lease a satellite development center in Vilnius, Lithuania.

Our servers are hosted

in leased data centers in different geographic locations in the United States.

On August 1, 2021, we acquired Emojipedia.

As part of this acquisition,

we acquired trademark registrations for “Emojipedia”

in the United States, the European Union, the United Kingdom, China and

Australia, and trademark registrations for “World Emoji Day”

in the United States and United Kingdom.

We also acquired the

following domain name registrations:

www.emojipedia.com and www.emojipedia.org.

As of July 31, 2021, we had 51 full-time and 2 part-time employees.

As a result of the COVID-19 pandemic we ceased having a physical office

in the United States in 2020.

Yet, we still address commercial operations including accounting and finance, and business development from

the New York area.

In 2021, we moved into a smaller Trondheim, Norway facility, with approximately 3,800 square feet of space, accommodates

our product, design and technology teams and is under lease through March 2024.

We also lease a satellite development center in Vilnius,

Our servers are hosted in leased data centers in different geographic locations in the United States.

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 1. Business