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Item 1. Business

2022-11-14 compared with 2021-11-09 · 398 added, 414 removed, 4 unchanged (100% of the section changed)

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.

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 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.

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.

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, 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 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.

We invest significant

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

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.

builds digital marketplaces and friendly competitive games around content that people use to express themselves.

Our leading products

include Zedge Ringtones and Wallpapers, a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones,

and notification sounds which historically was branded as Zedge Premium, and GuruShots, a skill-based photo challenge game.

is to connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce.

are part of the ‘Creator Economy,’ where over 1 billion people create and share their content across social platforms, mobile,

and video games, and content marketplaces.

Within this group of individuals, over 200 million identify as creators, people who use their

influence, skill, and creativity to amass an audience and monetize it.

Furthermore, approximately 12% of full-time creators earn more

than $50,000 per year, and 10% of influencers earn more than $100,000 per year.

We view the Creator Economy as an untapped opportunity

for Zedge to expand its business, especially as we execute by connecting our gamers with our marketplace.

Zedge Ringtones and Wallpapers app (which is named “Zedge Wallpapers” in the App Store), which we refer to as our “Zedge

App,” is a marketplace offering a wide array of mobile personalization content including wallpapers, video wallpapers, ringtones,

and notification sounds, and is available both in Google Play and the App Store.

As of July 31, 2022, our Zedge App has been installed

nearly 569 million times since inception and, over the past two years, has had between 32.0 and 36.3 million monthly active users (“MAU”).

MAU is a key performance indicator (“KPI”) that captures the number of unique users that used our Zedge App during the final

30 days of the relevant period.

Our platform allows creators to upload content to our marketplace and avail it to our users either for

free or for a price, via ‘Zedge Premium.’ In turn, our users utilize the content to personalize their phones and express

their individuality.

fiscal 2022 we introduced several new customer facing product features including ‘NFTs Made Easy’ and social and community

features, all meant to improve customer engagement, MAU, and revenue growth over the long term.

In addition, due to developments outside

of our control, we migrated to a new ad mediation platform - Applovin MAX -, which monopolized internal resources and delayed the completion

of other product initiatives we had planned for in fiscal 2022.

Applovin paid us a one-time $2 million integration bonus and their performance

has been on-par or better than our prior platform.

Following the transition, work resumed on the delayed development and most have been

rolled out as of September 30, 2022.

Zedge App’s monetization stack consists of advertising revenue generated when users view advertisements when using the Zedge App

or surfing our website, the in-app sale of Zedge Credits, our virtual currency, that is used to purchase Zedge Premium content, and a

paid-subscription offering that provides an ad-free experience to users that purchase a monthly or annual subscription.

As of July 31,

2022, we had 692,000 active paying subscribers.

late 2021 we introduced NFT functionality to a limited number of Zedge Premium creators via ‘NFTs Made Easy’.

believe this product enhancement has the potential to drive significant artist growth and revenue production.

‘NFTs Made Easy’

is an eco-friendly platform that enables artists and consumers to sell and purchase NFTs within the Zedge App even though they may lack

deep knowledge and proficiency in the crypto space.

All transactions are made using Zedge Credits.

April 2022, we acquired GuruShots Ltd (“GuruShots”) a recognized category leader focused on gamifying the photography vertical.

GuruShots offers a platform spanning iOS, Android, and the web that provides a fun, educational and structured way for amateur photographers

to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards.

that the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos is 30-40

million people per month and that the market is still in its infancy.

Every month, GuruShots stages more than 300 competitions that result

in players uploading in excess of 1 million photographs and casting close to 4.5+ billion “perceived votes,” which are calculated

by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user.

engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense

of belonging, inspiration, recognition, improvement, and competition.

GuruShots utilizes a ‘Free-to-Play’ business model that leads to strong monetization with the purchase of resources that

are used to give paying players an edge while still maintaining a fair and competitive experience for all participants.

Over the past

six years, the monthly average paying player spend has increased in excess of 14% annually to more than $55 per player.

we look to the future, we are advancing several initiatives that we expect will drive user growth, increase engagement, drive in-app

purchases, and advance our in-game economy.

Some of these include:

● On-Boarding .

Revamping the customer onboarding experience in order to maximize first time purchasers by

immediately drawing new players into simplified photo competitions that are limited to a

small audience taking place in a short time duration.

● Subscriptions .

Introducing value-adds that we can bundle into a subscription.

For example, we started testing

a feed of short and engaging instructional videos that offer players techniques for improving

their photographs.

If users engage with this content, we expect to bundle it into a paid

subscription.

Evolving the game economy by maturing the game’s progression mechanics and features,

earn and spend dynamics, and introducing soft and premium currencies tied to resources and

Furthermore, we hope to introduce an advertising layer in the monetization stack

in the future.

We market GuruShots to prospective players, primarily via paid user

acquisition channels, and utilize a host of creative formats including static and video ads in order to promote the game.

Our marketing

team invests material resources in analyzing all attributes of a campaign ranging from the creative assets, offer acquisition channel,

and platform (i.e., iOS, Android, and web), just to name a few, with the goal of determining whether a specific campaign is likely to

yield a profitable customer.

When we unearth a successful combination of these variables we scale up until we experience diminishing returns.

Ultimately, we believe that the efforts we are making to advance the product coupled with the investment in user acquisition can significantly

increase GuruShots’ player base.

our commitment to growing both the Zedge App and GuruShots on a standalone basis, we believe that there are many potential synergies

that we can capitalize on that exist between the two businesses.

Specifically, we plan to enable the ability for GuruShots players to

become Zedge Premium artists and sell their photos to our audience of 30+ million MAU as standard digital images or NFTs.

we look to benefit from the experience that the GuruShots team possesses and test gamifying the Zedge App.

We believe that successful

gamification can contribute to increasing engagement, retention, and lifetime value, all critical KPIs for our business.

we believe that there are complementary content verticals that lend themselves to gamification.

August 2021, we acquired Emojipedia Pty Ltd (“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 receives approximately 46.4 million monthly page

views and has approximately 7.6 million monthly active users of which approximately 45.19% are located in well-developed markets.

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

As a voting member of the Unicode Consortium,

the standards body responsible for approving new emojis, Emojipedia works alongside major emoji creators including Apple, Google, Facebook,

believe that Emojipedia provides growth potential to the Zedge App, and it was immediately accretive to earnings.

In the past year, we

have made many changes to Emojipedia including migrating to a new ad mediation platform, redesigning the Emojipedia website, and introducing

localized versions of Emojipedia in Spanish, French, German, Italian, and Portuguese.

We will continue to enhance this offering and are

exploring new features including a native mobile offering as well as additional monetization opportunities.

vision is to connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce.

Strategic Flywheel

long-term strategy calls for creating a flywheel that leverages the synergies of a “gaming and marketplace” dynamic across

our portfolio, engaging communities of consumers with content that can function on a multitude of online and mobile platforms including

social networks, messaging, and gaming.

This is unlike the existing dynamic that many gaming platforms offer to players, who can create

and sell virtual goods that are valuable only within the context of that particular ecosystem.

Although the foundation of our strategy

is currently centered around the Zedge App and GuruShots, over time we expect to expand into other content verticals that have relevance

beyond gameplay.

our current products as an example, GuruShots is a skill-based game that attracts creators (mainly, amateur photographers) with friendly

photo competitions in which they compete to gain recognition and pedigree.

We believe that adding the ability to sell their content to

the Zedge App’s 30+ million MAU is an attractive benefit that enables players not only to have fun, but also to earn money while

This dual purpose will likely improve user growth, engagement, retention, and monetization while simultaneously expanding our

relevance to a broader community interested in high-quality photographs.

If our assumptions are correct, we will have a flywheel that

drives the aforementioned KPIs while also enabling us to expand into new verticals (through internal development or acquisition), gamify

them, and add new content to our marketplace.

this strategy calls for concentrating our efforts on the following goals:

growing our user base, profitably .

We expect to continue devoting resources to growing

our user base profitably by:

our users’ needs and enhancing our products to meet those needs;

and offering new features and services that are attractive to both new and existing users;

in paid user acquisition campaigns that yield profitable customers, based on empirical data

and focused, primarily, on well-developed markets;

our reach by collaborating with strategic partners.

monetization .

Continue developing monetization methods that will help us grow, including

advancements of the in-app economy, NFTs, subscription models, e-commerce, and new advertising

products, implementations, and optimizations.

We believe that our products and customer base

are attractive to advertisers, brands, artists, and players and will yield new monetization

opportunities.

In addition, we expect that we will be able to capitalize on cross marketing

our suite of products to this customer base.

product and technology investment in and across our product suite .

We plan to make continued,

selected investments in product feature sets and functionality in order to both maintain

our existing user base and attract new users.

In addition, we envision applying our product

expertise to verticals that we currently do not have in our portfolio, as well as gamifying

the Zedge App.

utilize data to improve user acquisition and customer engagement .

We plan to better utilize

data to scale profitable user acquisition and improve the use of our product through personalized

recommendations and content feeds, enhanced search and content discovery, and optimized pricing.

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

Our goal is to

build our marketplace into one that artists view as prioritizing their needs 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 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, generate incremental

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

Furthermore, we also 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

our revenue stack .

Historically, the majority of our revenue has been derived from advertising.

We plan to diversify our revenue by developing a subscription offer and introducing advertising

into GuruShots.

Furthermore, we expect to further our NFT offering, opening up the potential

for trading revenue as well as revisiting print on demand, particularly with GuruShots’

player’s content.

We also have a set of product initiatives specific to Emojipedia

that will enable new revenue streams from this asset.

● 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 April 2022 we acquired GuruShots

and in August 2021 we acquired Emojipedia.

Each of these acquisitions offers new growth opportunities

both on a stand-alone basis as well as on an integrated and synergistic basis that we believe

can impact our business in a materially positive fashion.

Competitive Advantages

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

global customer base .

We benefit from having a large customer base.

As of July 31, 2022,

we had approximately 40 million MAU spanning across all of our products, of which approximately

27% were in well-developed markets and 73% were in emerging markets.

Typically, customers

in well-developed markets monetize at a material premium when compared to those in emerging

The Android version of our Zedge App is available in 17 languages and Emojipedia

is available in 19 languages.

We possess a highly diversified portfolio of content and attribute

this in part to our global reach which makes us attractive to creators interested in meeting

various customer tastes and preferences.

In addition, our diverse 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 .

Our Zedge App has a global customer

base of approximately 32 million MAU, enabling users to easily personalize their mobile phones

with a wide variety of free, high-quality ringtones, wallpapers, notification sounds, video

wallpapers, custom app icons (only available for iOS), and NFTs.

We believe that our Zedge

App is well positioned for continued leadership in the personalization space.

Knowledge of Gaming .

We have leaders with years of experience in building and operating

games of skill across digital platforms including iOS, Android, and web.

We intimately understand

game design, onboarding, game mechanics, LiveOps, feedback loops, in-game resource balancing,

scarcity, and how to make a game fun, challenging, and fair.

Gaming and a Real-world Activity.

We have years of experience in combining game dynamics

with a real-world activity.

In the case of GuruShots the real-world activity is photography.

Successfully combining these is non-trivial and requires a great deal of expertise and understanding

that the team has acquired over the years.

● High-quality

We do our best to provide our customers with high-quality products and superior

user experiences.

We prioritize our customers’ 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.

We beta test product enhancements extensively and closely

monitor customer feedback to ensure that we meet users’ needs.

To date, our Zedge App

has received more than 11 million reviews in Google Play where it boasts a 4.6 star rating

out of a maximum of 5 stars.

GuruShots has a 4.5 star rating in the App Store albeit from

a universe of several thousand reviews.

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 product suite and

its mission to build a tightly coupled ecosystem of “games and marketplaces.”

Our culture is founded on respect and empowerment which are critical in light of us having

offices in four different countries with a hybrid in-person work attendance policy.

to create an environment where our employees can be autonomous and creative.

Our people possess

deep expertise in product design and management, development, marketing, monetization, data

and analytics and operations.

We have an experienced management team with longstanding tenure with the company

and deep knowledge of the mobile app landscape who are highly focused on execution.

management team possesses a solid understanding of the mobile app industry, product design

and development, operations, and monetization.

Collectively, our management team has a proven

ability in building and scaling a business and pursuing opportunities with a manageable risk

and diverse content catalog .

Our large and diverse catalog of content includes wallpapers,

ringtones, notification sounds, video wallpapers, photographs, and emojis.

With artists and

contributors spanning the globe, we have assembled a vast array of both User Generated (UGC)

and licensed content to meet the needs of our users.

and infrastructure .

Our products are built upon scalable technology and infrastructure

that reliably serves tens of millions of MAU, globally.

We use a combination of off-the-shelf

and proprietary technologies and infrastructure solutions that scale efficiently to meet

the needs of our large customer base.

face competition in all aspects of our business and especially from other digital marketplaces and gaming companies.

In running our business,

we need to account for:

We compete for consumers’ leisure time, attention, and spending versus alternative

forms of entertainment that are available to them as well as against online platforms and

marketplaces that offer utility and content for mobile phone personalization.

There are many online platforms that offer content creators an eco-system in

which they can make their content available to consumers.

Some of these platforms may have

better incentives, paid or other, that may potentially make them more attractive than our

● 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.

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 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;

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.

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.

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.

Furthermore, we also

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.

We face significant competition in securing spend from advertisers.

Game Developers .

Game developers that offer more engaging and interesting games.

competitors, many of whom we may not be aware of, may be more proficient at capitalizing

on user acquisition channels in order to gain access to large user bases and their network

effects to expand virally and quickly.

● Alternative

options and products for mobile personalization and emojis .

There are many other marketplaces

and platforms that offer mobile personalization content, games, and emoji resources, some

of whom are better funded than we are.

We believe that we possess a competitive advantage

because of our:

shop” approach to mobile personalization, which avails customers of ringtones, wallpapers,

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

○ flexibility

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 catalog;

and well-respected brands;

○ proprietary

recommendation engine;

ranking and longevity.

● 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.

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 the 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, a section of our marketplace where artists can launch a virtual store and market,

distribute, and sell their digital content, including wallpapers, video wallpapers, ringtones, and notification sounds to our users.

January 2019, we started offering freemium Zedge App Android users the ability to convert into paying subscribers in exchange for removing

unsolicited advertisements from our Zedge App.

As of July 31, 2022, we had approximately 692,000 active subscribers.

In fiscal 2023,

we expect to launch subscriptions on iOS.

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

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.

December 14, 2021, we launched ‘NFTs Made Easy’ an NFT offering for artists and consumers that provides ease of use and negates

the need for cryptocurrency experience and know-how.

An artist only needs to upload their content as they normally would in the Zedge

Premium Creator’s Portal, check the NFT option, and Zedge handles the rest seamlessly, from minting to gas fees.

Additionally, consumers

can buy the NFTs simply by using Zedge Credits purchased in their local currency.

On April 12, 2022, we acquired GuruShots, a recognized category leader

that fuses photography with mobile gaming.

GuruShots, headquartered in Israel, offers a platform spanning iOS, Android, and the web that

gamifies photography by providing a fun, educational, and structured way for amateur photographers - essentially anyone with a mobile

phone - to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards.

a monthly basis, GuruShots users currently cast close to 4.5 billion “perceived votes” in more than 300 competitions.

currently generates revenue from selling digital resources that, if used skillfully, can provide additional visibility to competitors’

photographs, a critical factor in securing votes for competitive ranking.

eco-system 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.

an end user’s perspective, our platform minimizes response latency while maximizing content relevancy and discoverability.

our platform by utilizing systems, algorithms, and heuristics that organize our content based on real user data and that renders the

content in a relevant fashion.

With GuruShots, we have added open source and proprietary technologies around gamification, including

ranking algorithms that ensure fair exposure to all content in a competition, and real-time voting/ranking functionality at scale.

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.

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:

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

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,

“Tonesync” in the European Union and the United Kingdom, “We Make Phones Personal,” and “Zedge, Everything

You” in the United States and a stylized “D” logo in the European Union and the United Kingdom.

We also have applied

for trademark protection for “Tattoo your phone,” and “NFTs Made Easy” in the United States, a stylized “D”

logo in the United States, Canada and India, 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.

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:

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, and Australia, and trademark registrations for “World Emoji Day”

in the United States and the 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.

April 12, 2022, we acquired GuruShots Ltd.

As part of this acquisition, we acquired, all intellectual property rights associated with,

and encompassed within the GuruShots mobile and web-based applications, including the following domain name:

GuruShots.com.

we have applied for trademark protection for “GuruShots” in the United States, and have filed copyright applications for

the GuruShots mobile and web-based applications.

headcount totaled 93 as of July 31, 2022, including 32 added from the GuruShots acquisition.

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, our Norwegian operations 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.

In May of 2022, we entered into a one-year sublease agreement for approximately 2,300 square

feet of space for our team in Vilnius, Lithuania.

We lease 1,550 square feet of space in Tel Aviv, Israel that accommodates the GuruShots

That lease is due to expire in October 2024.

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